Amazon engaged in price fixing by pressuring major brands like Levi’s and Hanes to ask competing retailers to increase prices on certain products, according to a newly unsealed filing released Monday in a California antitrust lawsuit against the e-commerce giant.
California sued Amazon in San Francisco Superior Court in 2022 over allegations the retailer harms competition and increases prices that consumers pay online. The lawsuit, which is scheduled to go to trial next year, claimed Amazon punished sellers on its marketplace for offering lower prices on other websites.
Now, the state is providing more details on ways Amazon pressured brands to urge other retailers to increase prices. In the 16-page filing, Amazon asked the brands to get involved when it spotted a competitor’s lower price or was losing money selling an item. As a result of the pressure, rival sites raised their prices for the products, the state said.
“You don’t see price fixing so explicitly and egregiously in writing like this,” California’s attorney general, Rob Bonta, said in an interview.
The newly unsealed filing offers a rare behind-the-scenes look at how Amazon operates its $2.66 trillion empire. The Seattle company has long maintained that it prioritizes offering customers the lowest price. But it has faced increased scrutiny from regulators, who have argued that the company’s policies harmed online competition and inflated consumer costs.
The Federal Trade Commission and 17 states sued Amazon in 2023, accusing the company of illegally maintaining a monopoly in online retail by squeezing merchants who sell on its site and prioritizing its own products. Those actions resulted in “artificially higher prices,” according to the government’s suit.
In September, the F.T.C. agreed to settle a lawsuit against Amazon that accused the company of making it difficult for consumers to cancel its Prime subscription service. Under the terms of the settlement, Amazon agreed to pay up to $2.5 billion — including $1 billion in penalties and additional payouts to consumers. It did not admit or deny wrongdoing.
In a statement, an Amazon spokesman, Mark Blafkin, said the company looked forward to responding to California in court. The filing is a “transparent attempt to distract from the weakness of its case, coming more than three years after filing its complaint and based on supposedly ‘new’ evidence it has had for years,” he said.
“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,” Mr. Blafkin said.
Amazon is, by far, the largest online retailer, dwarfing its biggest e-commerce competitor, Walmart. Though most items are still sold in physical stores, e-commerce is growing far faster than sales at physical stores. For some types of products, online retail makes up the majority of sales.
In February, California asked a judge in San Francisco Superior Court to stop Amazon from engaging in the practices it described as price fixing while its antitrust lawsuit proceeds. On Monday, the state released a version of its request that removed previous redactions of the internal documents.
In one 2022 email to Hanes, an Amazon employee sent links to rival retailers’ lower prices, according to the filing. A Hanes employee responded that the clothing brand had “reached out to Target and Walmart to have the prices increased.”
Target and Gildan, which bought Hanes last year, did not immediately respond to requests for comment.
A Walmart spokeswoman said that the company did not comment on litigation where it is not a party, and that it would “always work hard on behalf of our customers to keep our prices low.”
In 2021, an Amazon employee emailed a Levi’s employee with two links to the company’s khakis on Walmart’s website, identifying the pants as “styles of concern,” according to emails filed with the court.
The Levi’s employee responded that Walmart had agreed to raise the price of one of the products to $29.99 as a “test for the best interest of the marketplace.” Amazon, which was charging between $25.47 and $26.99 for some of the slacks, eventually matched the price, according to the state.
Levi’s did not immediately respond to a request for comment.
In some instances, Amazon told suppliers that it was taking some products down because it did not want to match a lower price. Given Amazon’s large share of online sales, that posed a major risk for the suppliers.
In 2021, an Amazon employee told Maxi-Matic that the firm’s ice cream maker was “taken down” because it was listed as $17.99 elsewhere, according to the filing.
Maxi-Matic responded that it had “put Best Buy out of stock” and was “following up” with that retailer, according to the filing.
Best Buy and Maxi-Matic did not immediately respond to requests for comment.
The state did not cite examples of Amazon’s directly discussing pricing with competitors.
Mr. Bonta has used his perch as California’s top law enforcement official to scrutinize the tech industry. In addition to the lawsuit against Amazon, this year he began an investigation into Elon Musk’s xAI over the “proliferation of nonconsensual sexually explicit material” produced by its artificial intelligence model, Grok.
California said Amazon was able to exert pressure on different brands because of its power and reach.
“Amazon’s message to vendors is clear: Ensure that prices at other retailers stay high or face consequences,” the state said in its motion.
Karen Weise contributed reporting.
