California AG seeks injunction over Amazon's alleged price-fixing scheme affecting 12+ vendors

California’s attorney general is seeking a preliminary injunction to halt Amazon.com Inc.’s (NASDAQ:AMZN) alleged price-fixing, releasing evidence that the e-commerce giant pressured at least 12 vendors to inflate prices on competing retail websites.

“Amazon’s ‘cheap’ prices are the result of intimidation and illegality that drove up prices for consumers across the marketplace,” AG Rob Bonta said in a statement, accusing the company of bullying vendors.

The court filing details how Amazon allegedly coerced first-party vendors—including Levi’s, Hanes, and SkullCandy—to raise their prices or remove listings entirely from sites like Walmart, Target, and Best Buy. In one instance, Hanes confirmed it “reached out to Target and Walmart to have the prices increased” after Amazon flagged lower prices on their sites.

The motion, part of a 2022 lawsuit, asks a San Francisco court to prohibit Amazon's practices and appoint a monitor to ensure compliance ahead of a trial set for January 2027. A hearing on the preliminary injunction is scheduled for July 23, posing a direct threat to Amazon's marketplace business model.

The unsealed documents provide a detailed look into the alleged strong-arming tactics. In one email, Amazon personnel planned to "artificially" raise prices for a pet treats line, with the vendor expected to "get Chewy to follow" suit. In another, Home Depot management reportedly "agreed to raise the prices" on Agrothrive fertilizer after Amazon complained to the manufacturer about its lower price at the home improvement store.

Amazon's Defense and Judicial Scrutiny

Amazon has pushed back against the allegations, calling the motion a "transparent attempt to distract from the weakness of its case." An Amazon spokesperson noted the evidence cited is several years old and has been in the attorney general's possession for years.

During a March hearing, San Francisco Superior Court Judge Ethan Schulman echoed this concern, questioning the need for a preliminary injunction based on conduct that allegedly occurred between 2019 and 2021. "Is there a good faith basis to believe that whatever this alleged conduct was that occurred several years ago is still ongoing such that there’s a need for a preliminary injunction?” he asked.

The state argues that the price-fixing is illegal on its face and that Amazon's conduct continues, highlighting internal communications that allegedly show efforts to hide the scheme by encouraging employees to discuss sensitive issues over the phone.

This article is for informational purposes only and does not constitute investment advice.