The California Attorney General’s office has expanded upon an antitrust lawsuit accusing Amazon of engaging in price fixing “by pressuring major brands like Levi’s and Hanes to ask competing retailers to raise prices on certain products.” Attorney General Rob Bonta is seeking a preliminary injunction that, according to the Los Angeles Times, would “bar Amazon from communicating with its vendors about the prices of its products on other online sites, among other prohibitions. Bonta also is seeking a court-appointed monitor to oversee Amazon’s practices, restitution for customers and damages when the case goes to trial.”
According to the New York Times story, “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, like those of Walmart or Target.
“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 … 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 more 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 response, Amazon essentially said that the suit was old news, that 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.”
The Times reports that “the 19-page document filed Monday in San Francisco Superior Court provided details about Amazon’s alleged price-fixing scheme, largely derived from emails between Amazon and the vendors who sell products on its site.” It notes that Californias Attorney General Rob 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.
“Mr. Bonta has also supported more regulation for social media platforms.”
KC’s View:
Is there anyone who reads these charges and thinks, “No, that doesn’t sound at all like Amazon? This would be completely out of character and this lawsuit and proposed injunction have absolutely no chance of of success.”
It all sounds within the realm of possibility to me – but it also is possible that Amazon walked right up to the line but did not cross it, and that the California AG is going to have trouble proving his case to a jury.
The post Amazon Accused Of Price Fixing In New Antitrust Lawsuit appeared first on MNB.
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