Amazon.com Inc.
coerced Levi Strauss & Co. and other prominent brands into an alleged
price-fixing scheme
that influenced costs for a wide variety of goods on
retail websites
operated by Walmart Inc., Target Corp., Home Depot Inc., Chewy Inc. and others, according to
court documents
unsealed Monday.
The filing is part of California Attorney General Rob Bonta’s 2022 antitrust lawsuit alleging Amazon artificially inflated product prices to protect its profit margins. Bonta is seeking to prevent the company from engaging in the alleged price-fixing practices while the lawsuit, scheduled for trial in January 2027, proceeds. His is one of several antitrust cases against the
e-commerce giant
, which captures about 40 cents of every dollar spent online in the United States.
The document alleges that vendors were cowed by Amazon’s bargaining power and, fearing punishment, agreed to raise prices on
competing retail websites
.
“Evidence developed in discovery reveals that Amazon, its vendors and competing retailers are fixing retail prices,” according to an unredacted court filing made public on Monday. “Time and again, across years and product categories, Amazon reaches out to its vendors and instructs them to ‘fix’ retail prices on competitors’ websites, threatening dire consequences if vendors do not comply.”
In an emailed statement, Amazon spokesperson Mark Blafkin said: “The Attorney General’s motion is a transparent attempt to distract from the weakness of its case, coming more than three years after filing its complaint and based on supposedly ‘new’ evidence it has had for years.”
The filing details more than 15 instances of Amazon employees contacting suppliers after seeing products with lower prices on competing sites, including Best Buy Co. and Newegg Commerce Inc. The communications reveal Amazon’s campaign to ensure it had the best prices on a wide range of products, including Levi’s khaki pants, Hanes apparel, bar stools, fertilizer, eye drops, portable generators and guitar audio equipment.
The filing doesn’t provide any evidence of direct communication between Amazon and competing retailers. Rather, the Seattle-based company contacted product suppliers and brands, which responded by saying rivals such as Walmart and Home Depot had agreed to update the prices of their products.
“Amazon provides exact details of its competitors’ prices and directly asks vendors to ‘look into’ getting the competitors to increase their prices,” according to the complaint.
Amazon faces
antitrust complaints
from the Federal Trade Commission and attorneys general from multiple states and Washington, DC. Bloomberg in 2019 reported on Amazon’s practice of squeezing sellers who offered better prices on Walmart. That article was cited when Bonta filed his lawsuit in 2022.
Three
antitrust trials
scheduled to begin in 2027 include similar allegations that Amazon has forced brands to raise prices at competing retailers or suffer limited or no visibility on Amazon. The California case will be closely watched because it’s scheduled to go to trial in January before the others. The FTC and a group of largely Democratic state AGs have a March trial date in Seattle. The District of Columbia’s case is scheduled to head to trial in May 2027.
Any of them could lead to a forced breakup of Amazon’s retail business. While only the federal case could force nationwide business changes, all three would likely have the same impact since it would be unlikely for Amazon to limit the effects to a single location.
The unsealed California motion says the evidence reveals conduct egregious enough for a court to temporarily block the behaviour pending the outcome of the trial. The court has scheduled a hearing for July at the state’s request.
—With assistance from Leah Nylen.
Bloomberg.com
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