The US online mail order company Amazon is said to have forced Levi’s and other well-known brands to agree on prices. This emerges from court documents released on Monday, which were reported by the Bloomberg news agency, among others. The alleged collusion in turn influenced the prices of a variety of goods on the websites of U.S. retailers such as Walmart, Home Depot and others.
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The documents that have now become known are part of an antitrust lawsuit filed by the US state of California against Amazon in 2022. In the lawsuit (PDFPDF), California’s Attorney General Rob Bonta accuses Amazon of imposing gagging agreements on third-party sellers that prohibit them from selling their goods at lower prices on other trading platforms. According to the accusation, Amazon is using its market power to drive up prices for end customers in order to protect its profit margins. The trial is scheduled to begin in January 2027.
In February, California asked a San Francisco court to prohibit Amazon from practicing price-fixing until the trial began. The file now released is a version of this application in which the previously redacted internal documents have been removed.
Amazon is putting pressure on brands
The document shows how Amazon allegedly pressured brands to get other retailers to raise prices. “The findings from the evidence show that Amazon, its suppliers and competing retailers are colluding on prices,” it says. “Again and again, across years and product categories, Amazon contacts its suppliers and instructs them to manipulate prices on competitors’ websites. If the suppliers do not follow this instruction, they threaten serious consequences.” According to the court documents, retailers were intimidated by Amazon’s bargaining power and agreed to price increases on competing sites out of fear of penalties.
“Price fixing is rarely recorded in writing in such an explicit and blatant manner,” California Attorney General Rob Bonta told the US daily New York Times.
The filing documents Amazon’s business practices in more than a dozen cases in which Amazon employees contacted suppliers after discovering lower-priced products on competing websites. Amazon attempted to secure the best prices on a wide range of products, including Levi’s clothing, fertilizer, eye drops, portable generators and audio equipment.
More antitrust lawsuits against Amazon
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Amazon is also facing a lawsuit for antitrust violations in several cases by the US Federal Trade Commission (FTC) and 17 US states. They accuse the online retailer of discriminating against third-party sellers on its Amazon Marketplace platform and of maintaining an illegal monopoly in online trading by favoring its own products. According to the lawsuit, this resulted in “artificially inflated prices.”
Amazon was also accused of unwittingly using so-called “dark pattern” technology to entice customers to take out an Amazon Prime subscription and to make it more difficult for US customers to cancel the paid service. In the case of the foisted Prime subscriptions, the FTC reached an agreement with Amazon in September. The online retail giant and two responsible Amazon managers accept a settlement in which the company pays a billion US dollar fine. In addition, Amazon must pay back $1.5 billion to US customers who were taken advantage of.
The outstanding FTC lawsuits are scheduled to be heard starting in March. This is one of the reasons why the case in California is being awaited with particular excitement, according to the Bloomberg news agency, as it will be heard before the other proceedings from January next year. Any of these actions could lead to the breakup of Amazon’s retail business, Bloomberg said.
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