California AG Alleges Amazon Colluded With Vendors to Fix Prices With Competitors

Emails released on Monday by California's attorney general show Amazon allegedly colluding with other companies to raise the prices of pet treats, khaki pants, eyedrops and other products sold online. According to a newly unsealed court filing released by attorney general Rob Bonta, Amazon employees have repeatedly worked with vendors using its platform to push retail vendors including Walmart and Chewy to set higher prices collectively.

In one case, according to Bonta's office, Amazon raised prices on a set of dog treats and worked with a pet treat manufacturer to convince Chewy, the pet supplies retailer, to follow its increases, effectively protecting its market share while sticking consumers with higher prices. Amazon emailed the manufacturer a list of products with price increases, instructing the vendor: "As you noted, Chewy should be aware of this update and follow suit accordingly." Two days later, in an internal message, the manufacturer confirmed that the price raise had gone up on both sites, Bonta's office alleges. The prices "that went up on Amazon immediately went up on Chewy :)", an employee of the manufacturer wrote, according to a court exhibit.

In another case, Amazon sent links to Levi's, the apparel giant, showing Dockers khaki pants being sold by Walmart, describing them as "styles of concern". The big box chain was selling them for less, according to Bonta's office. The next day, state officials allege, Levi's reported to Amazon that it talked to Walmart and that the big box chain had "partnered with us" to raise the khakis price up to "$29.99 immediately".

After, Amazon notified Levi's that it would also update its price to $29.99, a few dollars higher than it had been selling the pants for previously, according to Bonta's office.

"The evidence uncovered today is clear as day: Amazon is working to make your life more unaffordable," Bonta said in a statement. "The company is price fixing, colluding with vendors and other retailers to raise costs for Americans beyond what the market requires – beyond what is fair."

In response to Bonta's claims, an Amazon spokesperson called the attorney general's filing "a transparent attempt to distract from the weakness of its case", noting that it came "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," the company said in a statement. "Amazon looks forward to responding in court at the appropriate time."

Walmart, Levi's and Chewy are not defendants in the attorney general's case. Levi's and Chewy did not respond to requests for comment. In an email, a Walmart spokesperson declined to comment on the litigation but said the company "will always work hard on behalf of our customers to keep our prices low".

Amazon turned over the newly unsealed records to Bonta's office as part of an antitrust lawsuit that his office launched in 2022 alleging that the tech giant has "cowed" online vendors, dependent on Amazon's dominant e-commerce platform, into hiking their prices on the websites of other retailers such as Walmart and Target. By maintaining this artificial price floor, Bonta contends, has allowed Amazon to preserve the appearance of low prices while heading off robust competition and extracting more from consumers.

Amazon has not yet filed its response to the court filing, which was heavily redacted until today. In response to Bonta's original lawsuit, the tech giant has asserted that its practices promote, incentivize and reward competition. Amazon previously declared in a court filing that the state's core allegations are "entirely false and misguided".

The recently unsealed examples were part of a motion that the California attorney general submitted to a judge in February seeking an injunction to stop Amazon's alleged price-fixing tactics.