Amazon pressured companies to hike prices on rivals

Amazon Pressure was put on big brands such as Levi Strauss and Co.. And Hanes inflating listing prices on rival online marketplaces as part of a wide-ranging price-fixing scheme California Attorney General Rob Bonta.

The new unsealed documents released Monday are part of an agreement. 2022 antitrust lawsuit He claimed that Amazon was stifling competition and increasing the prices consumers pay online. The complaint focuses on deals Amazon has with millions of its sellers that Bonta says “keep prices artificially high” on rival platforms.

Bonta argued that sellers were forced to acquiesce to Amazon’s demands because of its dominant position in online retail.

Amazon has previously disputed Bonta’s claims. An Amazon spokesperson told CNBC that it would respond in court “at the appropriate time.”

“The Attorney General’s motion is a transparent attempt to distract from the weakness of his case, coming more than three years after he filed his complaint and relying on so-called ‘new’ evidence he has had for years,” the spokesman said in a statement. he said.

The documents released Monday include communications from 2022 between Amazon and underwear maker Hanes, in which it sent seller links to the following lists. Aim And Walmart‘s websites show lower prices than those on Amazon.

In the filing, Hanes confirmed that he “reached out to Target and Walmart to raise prices.”

In another case, Amazon warned Allergan that it was temporarily removing its listings after finding that its eye drops were being sold for less elsewhere. The medical products company responded by saying “Walmart raised the price to $16.99” and asked Amazon to remove the product from print. Amazon agreed, according to the application.

Amazon also allegedly pressured Levi’s to ask Walmart to raise the price of its khaki pants, which were offered at lower prices than Amazon’s listings. Walmart increased its prices, according to the filing.

Hanes, Levi’s and AbbVieOwner Allergan did not respond to requests for comment.

Bonta’s office asked a San Francisco Superior Court judge to block Amazon from engaging in alleged price-fixing practices while the case is pending. The office also asked the court to appoint an independent monitor to oversee Amazon’s compliance. The case is scheduled to be heard in 2027.

“In order to maintain profit margins, Amazon is forcing its strong-armed sellers to raise prices elsewhere or pull products from rival retailers altogether,” Bonta said in a call with reporters Monday. “This is not competition. This is price fixing and is illegal under California law.”

Amazon controls As much as 50% of the US e-commerce market, according to various estimates. The company has long argued that its pricing policies allow it to keep prices low for consumers.

Many antitrust complaints target pricing mechanisms.

The Federal Trade Commission and 17 states sued Amazon in 2023, accusing it of using its monopoly power to squeeze merchants, leading to higher prices on rival websites. Washington DC’s attorney general sued Amazon over its pricing policies in 2021, while European regulators also looked into the matter.

Third-party sellers on Amazon, who account for more than 60% of goods sold by the retailer, have also argued that the company uses pricing algorithms to prevent them from offering lower prices elsewhere on the web. They say doing so would put them at risk of losing the “Buy Box,” or the part of the Amazon listing where shoppers click “Buy Now” or “Add to Cart.”

Analysts predict Approximately 80% of Amazon sales appear to flow through the Buy Box.

Bonta said his office released the new filings Monday to show how Amazon “coordinates” with sellers and major retailers like Target and Walmart. chewable, Best Buy And Home DepotTo raise prices in the market.

“We don’t talk in general anymore,” Bonta told reporters. “We call out this behavior and the companies behind it.”