How Amazon allegedly used Levi’s and Hanes to force rivals to raise prices – What California court filing reveals

Newly unsealed court documents reveal that Amazon is pressuring big brands to force rival retailers to raise prices — a strategy that California’s attorney general says is price fixing, made clear in writing.

Amazon, the world’s leading online retailer, has launched a systematic campaign to pressure household brands, including Levi’s and Hanes, to turn to rival retailers to raise their prices. New York Times The report cited new unsealed documents filed in a California antitrust lawsuit.

What Does California’s Antitrust Suit Against Amazon Allege?

California first sued Amazon in 2022 in San Francisco Superior Court, claiming the company harmed competition and increased the prices consumers pay online. At the heart of the lawsuit is an allegation that Amazon penalizes sellers on its marketplace who offer lower prices on rival platforms, including the Walmart and Target websites.

Now, as the case approaches trial next year, the state has released a less redacted version of a 16-page filing that explains exactly how Amazon is implementing this strategy: not directly, but through the brands themselves.

According to the filing, whenever Amazon noticed that a competitor was offering a lower price or lost money on a product, it would contact the brand in question and flag the discrepancy. Brands would also approach rival retailers and ask them to raise their prices again. In several documented examples, these retailers complied with these rules.

“You don’t see price fixing in writing this clearly and seriously like this,” Rob Bonta, California’s attorney general, said in an interview.

Emails Revealing Amazon’s Alleged Pricing Pressure

Court documents include a series of internal memos that the state says show this pattern in concrete detail.

In 2021, an Amazon employee emailed a Levi’s colleague with links to the brand’s khaki pants listed on Walmart’s website, flagging the pants as “concerning styles.” The Levi’s employee said Walmart agreed to raise the price of an item to $29.99 as “a test in the best interest of the market.” Amazon, which sold the same pants for between $25.47 and $26.99, then matched the higher price.

A separate email exchange with Hanes in 2022 followed a similar scenario. An Amazon employee sent links to lower prices offered by rival retailers; A Hanes employee said the brand “reached out to Target and Walmart to raise prices.”

In another example from 2021, Amazon told appliance brand Maxi-Matic that its ice cream maker had been “removed” from the platform because it was listed elsewhere for $17.99, a sharp drop from $59.99. This same price cost Amazon approximately $7,000 in a single day. Amazon “cannot sell at this significant loss,” one employee wrote. Maxi-Matic said it had “disstocked Best Buy” and was “pursuing” that retailer.

California stated that in none of these exchanges does Amazon directly negotiate prices with rival retailers, and that the brands act as intermediaries.

Amazon’s Response: ‘Transparent Distraction Attempt’

Amazon pushed back hard. Accordingly New York TimesSpokesman Mark Blafkin said the company looks forward to responding in court, describing the filing as “a transparent attempt to distract from the weakness of the case, coming more than three years after we filed the complaint and relying on so-called ‘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.” NYT He quoted Blafkin.

Walmart told the New York Times that it does not comment on a lawsuit in which it is not a party, adding that it “will always work hard on behalf of our customers to keep our prices low.” Target, Gildan, Levi’s, Best Buy and Maxi-Matic, which acquired Hanes last year, did not respond to requests for comment.

Amazon’s Increasing Regulatory Problems in the US and Beyond

The California case is far from the only legal front on which Amazon finds itself under pressure.

The Federal Trade Commission and 17 US states filed suit against Amazon in 2023, accusing the company of illegally maintaining a monopoly on online retail by squeezing merchants on its platform and prioritizing its own products; this was behavior that led to “artificially higher prices,” according to the government complaint.

In a separate case, the FTC reached a settlement with Amazon over allegations that Amazon intentionally made it difficult for consumers to cancel their Prime subscriptions. Under the terms of that settlement, Amazon agreed to pay up to $2.5 billion, including $1 billion in penalties and additional payments to consumers, without admitting or denying wrongdoing.

Why Does Amazon’s Market Power Make This Case Important?

The allegations carry particular weight given Amazon’s dominance in e-commerce. The company is by far the largest online retailer in the United States, dwarfed by its closest rival, Walmart. While the majority of retail transactions still take place in physical stores, online commerce is growing at a much faster rate and currently accounts for the majority of sales for certain product categories.

California argues that Amazon’s size is what makes its alleged strategy effective. When Amazon flagged pricing concerns, brands had no choice but to comply; because on a platform the size of Amazon, losing visibility or being delisted altogether presented an existential business risk.

“Amazon’s message to sellers is clear: Make sure prices at other retailers stay high or suffer the consequences,” the state said in its motion.

The newly unsealed filing is part of a broader request California filed in February asking a judge in San Francisco to halt Amazon’s alleged pricing practices while the antitrust case continues.

California Attorney General Rob Bonta’s Technology Pressure

The Amazon case is not an isolated attempt. Bonta has positioned himself as one of the most aggressive state-level regulators of the U.S. tech industry.

This year, it launched an investigation into Elon Musk’s artificial intelligence company xAI over the “proliferation of non-consensual sexually explicit material” produced by its AI model Grok. He has also supported tighter regulation of social media platforms, part of a broader effort to use California’s legal machinery to check the power of Silicon Valley’s biggest companies.

The antitrust lawsuit filed against Amazon in California is scheduled to be heard in the San Francisco Superior Court in 2027.