Amazon Price Fixing Allegedly Raised Consumer Costs
▼ Summary
– California’s Attorney General has released evidence alleging Amazon engaged in a price-fixing scheme with vendors and competing retailers.
– The evidence details three specific methods, including coordinated price hikes and product removals, to eliminate lower prices elsewhere.
– One example shows Levi’s confirming it had Walmart raise a product’s price after Amazon flagged a lower price on Walmart.com.
– Another alleges Amazon directed vendors like Scotts to have competitors raise prices temporarily around Prime Day.
– The Attorney General stated the evidence explicitly shows Amazon bullied vendors to manipulate market prices.
Newly released court documents from California’s Attorney General present a detailed case against Amazon, alleging the company orchestrated a price-fixing scheme that artificially inflated costs for consumers. The state is seeking a preliminary injunction to halt these practices while its 2022 lawsuit moves forward. The evidence, described as largely unredacted, outlines a systematic approach where Amazon allegedly coordinated with major brands to manipulate market prices, particularly around its own promotional events like Prime Day.
According to the filing, the alleged anticompetitive conduct operated through three primary methods. First, Amazon or a competing retailer would agree, via a shared vendor, to either raise a product’s price or make it temporarily unavailable. This allowed the other retailer to match the new, higher price. Second, a competitor offering a lower price would increase it at Amazon’s request, transmitted through the vendor, enabling Amazon to then match that inflated price. Third, a vendor would completely remove a product from a competitor’s site if it was priced lower than on Amazon, eliminating the cheaper option and allowing Amazon to raise its own price.
Specific examples cited in the document are striking. In one instance, Amazon reportedly sent Levi’s examples of lower prices on Walmart.com. A Levi’s representative responded by confirming they had spoken to Walmart to raise the price of an item back to a specified level. In another, Amazon allegedly directed the lawn care company Scotts to contact a competing retailer and have them raise prices for the three days leading up to Prime Day. Similarly, communications show Amazon alerting apparel vendor Hanes to lower prices on Target.com and Walmart.com, with Hanes confirming it had contacted those retailers to have the prices increased.
California Attorney General Rob Bonta stated that his office uncovered evidence Amazon “bullied vendors to hike up the price of their products sold at other shops, or secured the removal of these products altogether, to ensure Amazon was the cheapest place consumers could find products.” He emphasized the unusual clarity of the evidence, noting, “You don’t see price fixing so explicitly and egregiously in writing like this.” Amazon has not yet publicly commented on these latest allegations.
(Source: The Verge)
