Amazon pressured Levi’s, other retailers to hike prices, California A.G. says

Amazon wanted to sell Levi’s Easy Khaki Classic pants for $29.99, but Walmart had lowered the price, and the giant online retailer had matched it at $25.47 to $26.99.

But Amazon wasn’t happy. It subsequently contacted Levi Strauss, asking the San Francisco apparel company to convince Walmart to raise its price, according to a document filed Monday in a price-fixing case brought against Amazon by California Atty. Gen. Rob Bonta.

Not only did Walmart raise its price, but a Levi Strauss employee also emailed Amazon, “I’m really hoping we can show this as a proof case so we can resolve issues going forward,” according to the filing.

The exchange over the pricing of the khaki pants is just one example of about a dozen cited in the document, filed in support of a preliminary injunction Bonta is seeking against Amazon to stop alleged price fixing.

Bonta’s office argues that Amazon, which is the largest online retailer in the U.S. and recorded $717 billion in global sales last year, is leveraging its market power to inflate retail prices on its and competing sites.

“Amazon has strong-armed vendors into raising prices elsewhere or pulling products from competing retailers altogether so that Amazon can protect its profit margins,” Bonta said Monday at a news conference announcing the filing. “This takes money out of the pockets of California families every single day on everyday goods, ranging from diapers to clothing to furniture.”

Bonta filed the lawsuit in 2022 in San Francisco Superior Court. The preliminary injunction is being sought in advance of a trial set for January. A hearing on the request is set for July 23.

Amazon said in a statement Monday that the legal 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,” the statement said.

Walmart said in a statement: “We do not comment on litigation in which we are not a party. We will always work hard on behalf of our customers to keep our prices low.”

Levis Strauss did not immediately respond.

The litigation is the latest lawsuit alleging that the Seattle-based retailer has engaged in price-fixing.

The Federal Trade Commission, 18 states and Puerto Rico have accused the company of abusing its market position to inflate prices on other online retail platforms, overcharge sellers and stifle competition. The 2023 federal lawsuit filed in Seattle largely mirrored California’s case.

The lawsuit, which has yet to go to trial, seeks a permanent injunction that would prohibit Amazon from engaging in unlawful conduct and loosen its “monopolistic control to restore competition.”

Last year, Amazon agreed to pay $2.5 billion to settle another 2023 FTC lawsuit accusing it of duping people into automatically renewing Amazon Prime subscriptions through “manipulative, coercive, or deceptive user-interface designs,” and making it complicated to end memberships.

Under the settlement, one of the largest to come out of an FTC action, Amazon is paying up to $51 to eligible customers.

The company did not admit wrongdoing and said the settlement “allows us to move forward and focus on innovating for customers.”

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 that sell products on its site.

The exchange between Amazon and Levi Strauss was cited as one of three methods the online retailer has used to fix and raise prices.

The alleged Levi Strauss scheme outlined in the document involved getting around price-matching pledges that result in a “downward pressure on price” by either Amazon or the competitor agreeing, through the common vendor, to raise the price or make the product temporarily unavailable so that the price can increase.

In another alleged scheme, Amazon raised prices on price-matched items and asked its vendors to have competitors raise their prices. In one instance, the lawsuit alleges, Amazon raised the prices on more than 10 pet treats sold on Chewy Pet Food & Supplies, a publicly traded rival retailer.

Chewy did not immediately respond to a request for comment.

The third alleged scheme involved a vendor, at Amazon’s request, taking away products from a competing retailer that sold them for far less than Amazon. The lawsuit cites four products a furniture vendor agreed to stop providing to an undisclosed competitor because of its low prices.

“If the problematic retail[er] does not fix by the end of the week, we will discontinue [these products] from your problematic competition to ensure that Amazon can return to a healthy state with these items,” the vendor emailed Amazon, according to the filing.

Amazon had warned the furniture vendor that it would remove all four of its products from Amazon’s website “ ‘in the next few days’ — immediately before the critical sales days of Black Friday and Cyber Monday — if the pricing issue was not resolved,” according to the filing.

Bonta said his office was “focusing on” Amazon in its case and not the vendors and other retailers, which he said were setting prices they thought appropriate before Amazon’s interference.

In seeking the injunction, Bonta’s office argues that Amazon threatens “dire consequences if vendors do not comply. Vendors, cowed by Amazon’s overwhelming bargaining leverage and fearing punishment, comply,” according to the filing.

The injunction 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.

The attorney general’s office had previously filed the evidence with the court in February, but the document was highly redacted from public view.