Amazon pressured companies to raise prices from competitors

Amazon big pressed brand like Levi Strauss & Co. again Hanes to raise the prices of listings on competing online marketplaces as part of a broader price-fixing program, according to California Attorney General Rob Bonta.

The newly unsealed documents released Monday are part of a 2022 antitrust lawsuit alleging Amazon competes with and raises the prices consumers pay across the Internet. The complaint boils down to Amazon’s agreements with millions of its sellers, which Bonta says “keeps prices high” on competing platforms.

Retailers are forced to comply with Amazon’s demands because of its dominant position in online retailing, Bonta said.

Amazon has previously disputed Bonta’s claims. An Amazon spokesperson told CNBC in a statement that it will respond to the lawsuit “at the appropriate time.”

“The General Prosecutor’s proposal is a clear attempt to undermine the weakness of his case, which came after more than three years of filing an appeal and is based on so-called ‘new’ evidence that has been available for years,” said the spokesperson in a statement.

The documents released on Monday include a 2022 connection between Amazon and underwear manufacturer Hanes, in which it posted the seller’s links to the listing. The target again WalmartWebsites that show lower prices than Amazon.

Hanes confirmed that “it was up to Target and Walmart that the prices went up,” the filing said.

In one case, Amazon informed Allergan that it had temporarily suppressed its eye listings when it found it was selling poorly elsewhere. The medical products company responded saying, “Walmart has raised its price” to $16.99 and asked Amazon not to suppress the product. Amazon agreed, according to the filing.

Amazon also allegedly pressured Levi’s to ask Walmart to raise the price of khaki pants, which were being offered for less than Amazon’s listing. Walmart has raised its prices, the report said.

Representatives from Hanes, Levi and AbbVieThe owner of Allergan did not respond to requests for comment.

Bonta’s office asked a San Francisco Superior Court judge to bar Amazon from engaging in the 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 for trial in 2027.

“Amazon has armed sellers who have the power to raise prices elsewhere or outsource products to completely competitive sellers so that Amazon can protect its profit margins,” Bonta said Monday in a call with reporters. “That’s not competition. Price-fixing, and under California law, it’s illegal.”

Amazon controls about 50% of the US e-commerce market, based on various estimates. The company has long argued that its pricing policies enable it to keep prices low for consumers.

Most antitrust complaints center on its pricing practices.

The Federal Trade Commission and 17 states sued Amazon in 2023, accusing it of using its power to squeeze sellers, resulting in higher prices on rival websites. The Washington, DC attorney general sued Amazon in 2021 over its pricing policies, and European regulators have also investigated the issue.

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

Analysts estimate that about 80% of Amazon’s sales flow through the Buy Box.

Bonta said his office released new documents Monday to show how Amazon is “coordinating” with retailers and major retailers, including Target, Walmart, Chewy, Best Buy again The Home Depotincreasing prices across the market.

“We don’t talk normally anymore,” Bonta told reporters. “We call out the behavior and the companies that follow it.”