California Sues Amazon: Allegations of Price Manipulation Tactics Revealed

In the latest developments from SAN FRANCISCO (KGO), newly unveiled court documents shed light on California’s legal battle against Amazon. A local state senator pointed out that the claims highlight a pervasive issue where companies exploit their influence and technology to extract higher prices from consumers.

“The aim is to safeguard Californians from overpaying,” stated Attorney General Rob Bonta.

Rob Bonta, California’s Attorney General, initiated a lawsuit against Amazon in San Francisco Superior Court back in 2022. The lawsuit accuses the Seattle-based giant of breaching state antitrust and unfair competition laws. On Monday, Bonta’s team made public newly unredacted evidence, seeking a preliminary injunction to halt the alleged practices before the case moves to trial.

Bonta contends that Amazon wielded its considerable market power to coerce vendors and major retailers into inflating prices on their own platforms, preventing Amazon from being underpriced. The state describes this as price fixing, where businesses collaborate to elevate or stabilize prices rather than competing to provide consumers with better deals.

“Amazon has been actively collaborating with vendors and major retailers, such as Target, Walmart, Chewy, Best Buy, and Home Depot, to increase market prices,” Bonta asserted.

According to California, the alleged scheme often started when Amazon spotted a product selling for less somewhere else. The filing says Amazon would then tell vendors to “fix,” “correct,” “increase,” “raise” or “look into” the lower price, with the threat of penalties if they did not. Those penalties, the state says, could include promotion restrictions, financial consequences or even removal of products from Amazon’s site.

One example laid out in the filing involves Levi’s khaki pants on Walmart’s website. According to the state, Amazon sent Levi’s links showing the pants listed on Walmart.com for $25.47 to $26.99 and said it hoped the issue could be resolved in the next few days. Levi’s then told Amazon it had spoken with Walmart and that Walmart had “partnered” with Levi’s to move the Easy Khaki Classic Fit pants back up to $29.99 immediately. Amazon later confirmed that the same $29.99 price was showing on Amazon too. In follow-up communication described in the filing, Levi’s said Walmart had updated the price “as a test for the best interest of the marketplace” and suggested it could serve as a “proof case” for resolving similar issues going forward.

“These were not suggestions. They were directives often backed by threats of penalties if vendors failed to comply,” Bonta said.

California says that the example shows Amazon was not simply matching a lower competitor price. Instead, the state argues Amazon flagged the lower Walmart price, Levi’s then got Walmart to raise it, and Amazon matched the new, higher number rather than competing against the lower price.

State Sen. Aisha Wahab, whose district includes parts of the East Bay and South Bay, said the newly public allegations against Amazon connect to her broader concerns about what she calls “manipulative pricing.” She has pushed legislation aimed at limiting surveillance pricing, the practice of using a consumer’s personal or device data to help determine what price they may be shown online.

Wahab said the issue goes beyond one lawsuit.

“What we are seeing is the game is completely rigged against regular people,” she said. She also argued that companies are using the data they collect to shape prices and offers in ways consumers often cannot see, known as surveillance pricing.

Wahab’s bill, SB 259, would prohibit companies from using specified device data to determine the maximum amount an individual consumer may be willing to pay and then setting a price based on that determination, according to her description of the measure. She said the goal is to stop companies from targeting people with higher prices based on habits, devices or other data points.

Amazon has previously denied the state’s allegations.

In a statement to ABC7 Eyewitness News, a spokesperson said, “The Attorney General’s motion 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. Amazon is consistently identified as America’s lowest-priced online retailer, and we’re proud of the low prices customers find when shopping in our store. Amazon looks forward to responding in court at the appropriate time.”

For now, Bonta is asking a judge to block the alleged conduct while the case moves forward. A hearing is scheduled for July 23, and the case is set for trial in January 2027.