Amazon Accused of Orchestrating Wide-Ranging Price-Fixing Scheme, Impacting Major Brands and Consumers
New evidence unsealed in a California antitrust lawsuit alleges that Amazon engaged in a comprehensive price-fixing scheme, coercing major brands like Levi Strauss & Co. and Hanes to artificially inflate prices on rival online marketplaces. California Attorney General Rob Bonta’s office released the documents on Monday as part of a 2022 lawsuit contending that Amazon has stifled competition and driven up prices for consumers across the internet.
The core of the complaint centers on Amazon’s agreements with its millions of vendors. According to Bonta, these agreements compel sellers to maintain artificially high prices on competing platforms, leveraging Amazon’s dominant position in online retail. Vendors, facing the prospect of reduced visibility or even delisting, often capitulate to Amazon’s demands to protect their sales on the e-commerce giant’s platform.
Amazon has consistently refuted these allegations. In a statement, an Amazon spokesperson asserted, “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 company plans to formally respond in court.
The newly disclosed documents include internal communications from 2022 between Amazon and undergarment manufacturer Hanes. These exchanges reveal Amazon providing Hanes with direct links to listings on competitors’ websites, such as Target and Walmart, where the same products were being sold at lower prices. In response, Hanes confirmed in a filing that it “reached out to Target and Walmart to have the prices increased.”
In a separate instance, Amazon alerted Allergan, a pharmaceutical company, that it was temporarily suppressing listings for its eye drops because they were found to be priced lower elsewhere. Allergan’s reply indicated that they had instructed Walmart to raise the price back to $16.99 and requested Amazon to reinstate the product listing.
Further allegations suggest Amazon pressured Levi’s to intervene with Walmart regarding the pricing of its khaki pants, which were reportedly being offered at a lower price than on Amazon’s own platform. The filing states that Walmart subsequently increased the prices. Representatives from Hanes, Levi’s, and AbbVie-owned Allergan did not respond to requests for comment.
Bonta’s office is seeking a court order to halt these alleged price-fixing practices while the lawsuit progresses. They have also requested the appointment of an independent monitor to ensure Amazon’s compliance with antitrust laws. The trial is currently slated for 2027.
“Amazon has strong-armed vendors into raising prices elsewhere or pulling products from competing retailers altogether so that Amazon can protect its profit margins,” Bonta stated during a press call. “That’s not competition. It’s price fixing, and under California law, it’s illegal.”
Estimates suggest Amazon commands as much as 50% of the U.S. e-commerce market. The company has long maintained that its pricing strategies are designed to benefit consumers by keeping prices low. However, this is not the first time Amazon’s pricing mechanisms have faced scrutiny.
The Federal Trade Commission and 17 states filed a broad antitrust lawsuit against Amazon in 2023, accusing the company of leveraging its market dominance to unfairly disadvantage merchants, which allegedly leads to inflated prices on competing online platforms. Similarly, Washington D.C.’s attorney general initiated a lawsuit in 2021 concerning Amazon’s pricing policies, and European regulators have also been actively investigating the issue.
Third-party sellers, who constitute over 60% of Amazon’s sales, have also voiced concerns. They argue that Amazon’s sophisticated pricing algorithms can prevent them from offering lower prices on other websites, thereby jeopardizing their ability to secure the coveted “Buy Box” – the prominent area on an Amazon listing where shoppers click “Buy Now” or “Add to Cart.” Analysts estimate that approximately 80% of Amazon sales are generated through the Buy Box.
Bonta emphasized that the unsealed filings aim to illustrate how Amazon orchestrates its pricing strategies with both vendors and major retailers, including Target, Walmart, Chewy, Best Buy, and Home Depot. “We’re not speaking generally anymore,” Bonta told reporters. “We’re calling out the conduct and the companies behind it.”
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