Amazon allegedly pressured companies to raise product prices with other retailers

Rob Bonta, the Attorney General of California, has released an unredacted copy of a legal document that the state filed in relation to its lawsuit against Amazon, containing details of the company’s alleged price fixing scheme. In it, the state of California accuses the e-commerce company of reaching out to brands and asking them to “fix” the retail prices of their products on competitors’ websites. Due to Amazon’s “overwhelming bargaining leverage” and out of fear of punishment, the brands agree to raise their products’ prices on other retailers like Walmart and Target or to remove them altogether, the filing reads.

California filed an antitrust lawsuit accusing Amazon of price fixing back in 2022. It said the company prevented sellers from offering lower prices on other sites and that vendors risked losing buy buttons and prominent listings if they defied Amazon. In February this year, Bonta filed for a preliminary injunction, asking the court to put a stop to Amazon’s “illegal conduct” while the state’s lawsuit is ongoing and waiting to go to trial next year.

In the unredacted filing, California said that Amazon instructs vendors and brands to increase their prices on other retailers and threatens them with “significant penalties for failure to comply.” State officials gave several examples in the filing, including one incident wherein Amazon allegedly emailed security systems provider Arlo.

The company talked to Arlo about “external price matching,” along with a screenshot of one of its cameras on Walmart, noting that its price of $549.93 “did not go back up.” Arlo reportedly responded that it would get it addressed, and Amazon told the company to “get [it] corrected by EOD.” Afterward, Arlo sent Amazon a screenshot, showing the same Walmart page now listing the camera’s price at $649.99. Amazon ended the conversation by thanking Arlo for its “quick action.” Other samples include Amazon asking Levi’s to “resolve” the lower prices of its khaki pants on Walmart and Hanes to increase the prices of its clothing items on Walmart and Target.

Amazon shrugged off the filing’s release and called California’s case against the company weak. “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,” an Amazon spokesperson told Engadget. “Amazon is consistently identified as America’s lowest-priced online retailer, and we’re proud of the low prices customers find when shopping in our store. Amazon looks forward to responding in court at the appropriate time.”