“Especially while consumers face an affordability crisis, there is no room for illegal practices that impede competition and raise prices,” Bonta said.
A California lawsuit against Amazon has led to hundreds of previously-redacted documents being unsealed, some of which seem to show the company pressuring independent retailers to raise their prices on the websites of competitors like Target and Walmart.
According to The Guardian, Amazon’s driving motivation was making its platform appear to have the lowest prices. In some cases, the company expressed significant concern when independent retailers were found to be selling products for less money on competitors’ websites, even when the difference was at little as a single cent.
The Guardian notes that the recently-unsealed documents include internal emails, deposition testimony, and confidential corporate presentations. The documents were obtained by California Attorney General Rob Bonta as part of a civil case being litigated by his office against Amazon.
The lawsuit, filed in 2022, accuses the e-commerce company of price-fixing on a massive scale.
In a press release, Bonta said that the evidence his office has obtained establishes that Amazon “unlawfully punishes sellers whose products are sold at lower prices by other online retailers.”
“Especially while consumers face an affordability crisis, there is no room for illegal practices that impede competition and raise prices,” Bonta said.
Amazon has since called the claims in Bonta’s lawsuit “entirely false and misguided.”
“Amazon is consistently identified as America’s lowest-priced online retailer, and it is ironic that the attorney general seeks to have us feature higher prices in ways that would harm consumers and competition,” the company said in a statement.
The Guardian, which independently reviewed the unredacted documents, writes that the California lawsuit accuses Amazon of using automated tools to track how vendors price goods on competing websites. Retailers that offer discounts on their own sites—or on competing platforms-often find their sales repressed in retaliation. Amazon can, for instance, take away merchants’ access to the “Buy Box,” a panel on the right-hand side of the website where consumers can click on either “Add to cart” or “Buy Now.”
“Amazon has gained substantial market power through agreements at the retail and wholesale level that prevent effective price competition in the online retail marketplace. Merchants must agree not to offer lower prices elsewhere — including on competing sites like Walmart, Target, eBay, and, in some cases, even on their own websites — and to accept drastic penalties like loss of the “Buy Box” on Amazon or to “compensate” Amazon if other online stores do lower their prices,” Bonta’s office said in an April 16 press release. “Merchants that do not comply face sanctions such as less prominent listings and even the possibility of termination or suspension of their ability to sell on Amazon. Without basic price competition and different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market. This occurs not because Amazon competes successfully or because it is a more efficient retailer, but because Amazon is breaking the law.”
Amazon has defended its practices by saying that they “ensure … customers see offers with low, competitive prices” while providing “the best possible” experience for shoppers.
“Just like any store owner who wouldn’t want to promote a bad deal to their customers, we don’t highlight or promote offers that are not competitively priced,” Amazon said. “It’s part of our commitment to featuring low prices to earn and maintain consumer trust.”
Amazon also denied Bonta’s claims that it reduces competition by making agreements with independent sellers.
“Amazon denies that the intent or effort of any agreement it has entered into with third-party sellers or vendors is to insulate itself from price competition” or “entrench any position of ‘dominance,’” the company wrote in a legal filing.
Sources
Attorney General Bonta Delivers Prime Victory Against Amazon in Ongoing Price Fixing Case
Newly unsealed records reveal Amazon’s price-fixing tactics, California attorney general claims
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