California: Amazon pressured retailers to boost prices on websites to not undercut it
Amazon used its market influence to get companies such as Walmart to raise prices on their websites so that the e-commerce giant would not be undercut by competitors, according to a filing unsealed Monday in an ongoing lawsuit before the California attorney general.
Attorney General Rob Bonta sued Amazon in San Francisco Superior Court in 2022, accusing the company of violating the state’s antitrust and unfair competition laws. The lawsuit is expected to go to trial next year, but Bonta is asking the judge to order Amazon to immediately cease its practices.
According to the filing, the alleged price-fixing scheme typically begins when the Seattle-based company requires sellers to set or review product prices on other websites and requests that those prices be raised, or face penalties such as promotion restrictions or even removal of products from Amazon’s site.
For example, the filing alleges that Amazon, clothing company Levi Strauss & Co. and Walmart agreed to fix prices on khaki pants. Amazon sent the denim retailer links to pants that were priced lower on Walmart.com, saying it “hoped these issues could be resolved over the next few days.”
The next day, Levi Strauss said he talked to Walmart about raising prices to $29.99, according to the filing.
“This is about preventing Californians from paying more than they should for everyday products, especially at a time when affordability seems increasingly out of reach,” Bonta, a Democrat, said during a virtual news conference Monday.
In a statement, an Amazon spokesperson rejected Bonta’s request, calling it “a transparent attempt to distract from the weakness of his case” with “so-called ‘new’ evidence.”
“Amazon is consistently identified as America’s lowest-cost online retailer, and we are proud of the low prices customers find when they shop in our store. Amazon looks forward to responding to the court at the appropriate time,” the statement said.
A Walmart spokesperson said in an email that it “does not comment on litigation in which we are not a party. We will always work hard on behalf of our customers to keep our prices low.”
Levi Strauss did not immediately respond to a request for comment.
Bonta said his office is focused on Amazon because “the illegal conduct flows from and originates with Amazon” but reserves the right to go after other retailers and sellers in the future.
The alleged price fixing involves a wide assortment of products, including home decor items, gardening products and pet care, according to the filing.
The hearing for the motion for a preliminary injunction will take place in July.
