California Alleges Amazon Engaged in Illegal Price Fixing Scheme
Amazon has been systematically fixing prices by "strong-arming" its vendors into charging more for their products on rival marketplaces, according to allegations from the state of California. In a court filing unsealed on Monday, Golden State attorney general Rob Bonta accused the Seattle-based retail giant of engaging in what he described as an "illegal price fixing scheme that is artificially driving up prices for Americans."
Overwhelming Bargaining Leverage Used to Control Prices
The court filing documents numerous examples in which Amazon allegedly contacted companies selling products on its platform and pressured them to lean on other online retailers to raise their prices in line with Amazon's pricing structure. If vendors refused, the filing alleges, Amazon would "threaten dire consequences," using its "overwhelming bargaining leverage" and threat of "punishment" to force compliance.
"The evidence we've uncovered is clear as day: Amazon is working to make your life more unaffordable," Bonta stated. "Amid a crisis of affordability, Amazon is illegally working to rake in profits by making sure consumers have nowhere else to turn to for lower prices. We'll see them in court."
Specific Examples of Alleged Price Manipulation
The filing provides detailed examples of how Amazon allegedly accomplished price fixing indirectly. Knowing that most vendors could not afford to have their products dropped or penalized by Amazon, the company allegedly demanded that they pressure rival online marketplaces to change their pricing.
In one notable instance, Amazon allegedly contacted Levi's to express "concern" about the prices being offered by Walmart for certain khaki pants, saying it "hop[ed] these can get resolved" soon. A Levi's employee allegedly responded: "I talked to Walmart and they have partnered with us to... take Easy Khaki Classic Fit back up to $29.99 immediately." Amazon then allegedly raised its own prices to match.
In another email exchange, Amazon allegedly demanded that a home decor vendor compensate Amazon for its lost profits on 84 specific products, whose prices it had been forced to drop to match a lower offer from Home Depot. According to the filing, Amazon continued to pressure the vendor until it reported back that it had persuaded Home Depot to raise its prices on all the desired products.
Vendor Communications Reveal Compliance Pressure
The court documents include numerous vendor communications that demonstrate the pressure applied by Amazon. "Just got out of a meeting with the Home Depot manager and she has agreed to raise the prices this time," one vendor of plant fertilizer assured Amazon in an email. Another company that makes trash cans stated, "We urgently asked the [other retailer] to stop running deals." A vendor of salt lamps promised, "I will fix the price and get back to you... we will fix the price by tomorrow."
Bonta's filing also claims that Amazon attempted to keep these conversations off the official record, instructing employees to "not use email" when negotiating specific prices. One Amazon employee allegedly told a vendor that prices were "a delicate conversation for numerous reasons, and probably best suited for a phone call / virtual meeting."
Legal Proceedings and Amazon's Response
The filing is part of an ongoing lawsuit against Amazon in the Superior Court of San Francisco, which began in 2022 and is scheduled to go to trial in January 2027. Bonta has asked the judge to immediately bar Amazon from discussing rival retailers' prices with any of its vendors and appoint an independent monitor to ensure compliance.
Amazon has denied all allegations and is contesting the lawsuit, calling Bonta's motion "a transparent attempt to distract from the weakness of its case." A spokesperson for Amazon stated: "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. 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."
Price fixing, which occurs when companies that should be competing instead work together to maintain prices at an agreed level, is illegal under both federal and state law. The California attorney general's office alleges that Amazon's actions represent a systematic violation of these laws through indirect pressure on vendors rather than direct coordination with competitors.
