Documents released by California Attorney General Rob Bonta on April 20 contain evidence of Amazon using its monopoly position to fix prices and undermine competition among competing marketplace platforms.
The unsealed documents are part of California’s ongoing antitrust lawsuit against Amazon that was launched in 2022. Based on this new evidence, the state government alleges that Amazon pressures vendors to raise their prices on the websites of competitors, such as Walmart and Target, in order to ensure that Amazon’s are lower or, at minimum, match the prices listed on the websites of their competitors. The unsealed documents also suggest that, despite forcing vendors to raise the prices of their products on competing platforms, Amazon also charges vendors more fees than their competitors.
These alleged price-fixing maneuvers allow Amazon to maximize its profits, artificially raising the price of products while ensuring that customers have no choice but to pay Amazon’s price or an even higher price elsewhere.
In one example, Amazon raised prices on dog treats and worked with the pet treat manufacturer to coerce the company Chewy to do the same on its website. Amazon emailed the manufacturer a list of products with the fixed prices, adding, “As you noted, Chewy should be aware of this update and follow suit accordingly.” Two days later, the manufacturer confirmed the price hike in an email, stating prices “that went up on Amazon immediately went up on Chewy :) [sic]”.
Other documents made public suggest that Amazon uses tracking technology to monitor how vendors price their goods and then penalize vendors if a lower price for the same product can be found on a competitor’s website. In one instance described by the unsealed documents, the price of a product on Walmart’s website was listed as 1 cent less than Amazon’s price for the same product. In response, Amazon’s tracking system restricted customers’ ability to purchase the product until the vendor raised the product’s price on Walmart’s website to match or exceed the price listed on Amazon.
Maintaining artificial price floors—a fundamental feature of monopoly capitalism—has allowed Amazon to preserve the appearance of low prices while reaping monopoly profits through the exploitation of workers and squeezing small businesses and consumers.
Image: Amazon fulfillment center in Edison, NJ. Credit: Phil Murphy.
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