Here’s how Amazon’s price fixing allegedly drove up prices everywhere | The Verge
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Here’s how Amazon’s price fixing allegedly drove up prices everywhere
California’s lawsuit accuses Amazon of directing companies like Levi’s to push for higher prices at other retailers.
California’s lawsuit accuses Amazon of directing companies like Levi’s to push for higher prices at other retailers.
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On Monday, California Attorney General Rob Bonta revealed the evidence of alleged price-fixing by Amazon. The state filed a request to the Supreme Court in February for a preliminary injunction to stop Amazon’s behavior while the lawsuit it originally filed in 2022 proceeds, and is now making that 16-page document available, “largely unredacted.” It lays out how Amazon allegedly schemed to raise other retailers’ prices ahead of Prime Day, or worked with its vendors to make sure items available at a discount elsewhere were suddenly out of stock and unavailable for the lower price.
Bonta says this document shows how the scheme works with Amazon, vendors, and its supposed competition, like Walmart, Target, Best Buy, Chewy, and Home Depot, in three ways:
Amazon or its competitor, through their common vendor, will agree to increase the retail price or make a product temporarily unavailable, so that the other retailer can match the increased market price, increasing the price for consumers.
A competitor offering a cheaper price on a product will increase its retail price at Amazon’s request (a request made through the vendor), so that Amazon can then match that increased retail price, thereby increasing the price for consumers.
The vendor removes a product from a competing retailer that is offering a lower price than Amazon, so that the lower price is no longer available in the market and Amazon then raises its retail price, resulting in a higher price for consumers.
Two examples from the document (available in full below) jump out, like this one where Amazon sent Levi’s examples of lower prices on Walmart.com, and a response from Levi’s confirming that “I talked to Walmart and they have partnered with us to… take Easy Khaki Classic fit back up to ladder SPP price, $29.99 immediately.”
Another example alleged by Bonta is communication showing Amazon asking vendors like Scotts and Hanes to “look into” raising prices on competing websites. In the Scotts example, it specifically cites Amazon’s self-created Prime Day event as a reason to raise the price for a few days.
In one such case, Amazon directed vendor Scotts (a manufacturer of lawn/garden products) to “reach out to the retailer that we are price matching to and have them raise their prices, even if it is just for the 3 days leading up to [Prime Day].” In another example, Amazon sent Hanes (an apparel vendor) links to Target.com and Walmart.com showing lower prices than were on Amazon, and Hanes confirmed that it “reached out to Target and Walmart to have the prices increased.”
In one such case, Amazon directed vendor Scotts (a manufacturer of lawn/garden products) to “reach out to the retailer that we are price matching to and have them raise their prices, even if it is just for the 3 days leading up to [Prime Day].” In another example, Amazon sent Hanes (an apparel vendor) links to Target.com and Walmart.com showing lower prices than were on Amazon, and Hanes confirmed that it “reached out to Target and Walmart to have the prices increased.”
“My office has uncovered evidence that Amazon bullied vendors to hike up the price of their products sold at other shops, or secured the removal of these products altogether, to ensure Amazon was the cheapest place consumers could find products,” said Bonta in a statement. In an interview with the New York Times, he said, “You don’t see price fixing so explicitly and egregiously in writing like this.” Amazon did not immediately respond to a request for comment from The Verge.
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