Recent disclosures of previously concealed documents have brought to light allegations that Amazon has been exerting pressure on independent sellers using its platform to increase their prices on rival sites, such as Walmart and Target. This, according to California authorities, is part of a strategy to make Amazon’s prices appear more competitive.
Evidence obtained reveals that Amazon became concerned even when competitors offered products at prices just a penny lower, indicating the company’s aggressive stance on price competition. These documents, which include internal communications, deposition excerpts, and confidential corporate presentations, were acquired by California Attorney General Rob Bonta during a civil lawsuit initiated in 2022 that accuses Amazon of engaging in widespread price-fixing practices.
The Guardian has reviewed these documents, which have been submitted to the San Francisco County Superior Court but remain largely undisclosed to the public. The state’s legal team has revealed significant details that were previously redacted, although some portions have been retained at Amazon’s request following a judge’s ruling.
In a statement, Attorney General Bonta emphasized that the newly disclosed evidence supports the claims that Amazon’s practices “unlawfully punish sellers whose products are offered at lower prices by other online retailers.” He expressed concern about the implications of such practices on competition and consumer affordability, stating, “There is no room for illegal actions that hinder competition and inflate prices, especially as consumers face an affordability crisis.” He also mentioned the upcoming trial scheduled for January 2027.
Amazon has strongly rejected these allegations, labeling the claims as “entirely false and misguided.” The company noted that it is frequently recognized as the lowest-priced online retailer in the U.S. and criticized the attorney general’s desire to force them into a position where they must display higher prices, which they assert would harm consumers and competition.
According to the state’s complaint, Amazon has utilized automated systems to monitor pricing by independent sellers on competing websites and has leveraged its market dominance to prevent these sellers from pricing their products lower than on Amazon, despite the fact that Amazon often imposes significantly higher fees on these vendors.
The lawsuit points out that Amazon penalizes sellers who attempt to offer discounts on their own platforms or on competitors’ sites, which can lead to a reduction in their sales on Amazon. This is achieved by revoking access to essential features like the “Buy Box,” which is prominently displayed on product pages and includes functionalities like “Add to cart” and “Buy Now.”
In one notable instance, Mayer Handler, the owner of a clothing brand named Leveret, testified that in October 2022, he received a notification from Amazon stating that one of his products was no longer eligible for the Buy Box because it was priced at $19.99 on Amazon, which was only a penny more than the price listed on Walmart. Following this development, Handler indicated that his company adjusted its pricing on Walmart to either match or exceed Amazon’s price, or modified the product code to evade Amazon’s price monitoring.
Handler criticized Amazon’s tactics, claiming the company’s price tracking and “shadow” blocking of products were depriving consumers of lower prices, suggesting that while it might be seen as capitalism, it resembled monopolistic behavior leading to increased consumer costs.
Another deposition revealed that Terry Esbenshade, a supplier from Pennsylvania, experienced a drastic drop in sales—by roughly 80%—when his products lost the Buy Box due to lower prices available on other sites. He recounted an instance where a popular patio table was suppressed on Amazon after it was sold at a lower price on Wayfair. To rectify this, Esbenshade adjusted the minimum advertised price on Wayfair to exceed Amazon’s price, which subsequently restored his product’s visibility on Amazon.
Amazon has countered that its practices are designed to foster competition, stating that the company aims to present customers with low, competitive prices and enhance the overall shopping experience. They assert that just as any retailer would not promote unfavorable deals, Amazon does not showcase offers that are not competitively priced, as part of its commitment to maintaining customer trust.
Furthermore, Amazon has denied any intentions of insulating itself from competition through its agreements with independent sellers, asserting that such agreements are not meant to entrench a position of market dominance. Nevertheless, the California Attorney General’s office remains steadfast in its assertion that the uncovered evidence substantiates the allegations against Amazon.
