Amazon wanted to sell Levi’s Easy Khaki Classic Pant for $29.99, but Walmart dropped the price, and the giant online retailer bumped it up from $25.47 to $26.99.
But Amazon was not happy. It later contacted Levi Strauss, asking the San Francisco apparel company to convince Walmart to raise its prices, according to a document filed Monday in a price-fixing case brought against Amazon by California Atty. General Rob Bonta.
According to the filing, not only did Walmart raise its price, but a Levi Strauss employee emailed Amazon saying, “I’m really hoping we can show this as evidence so we can resolve the issues moving forward.”
The debate over the price of khaki pants is one of nearly a dozen examples cited in the document, filed in support of the 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 US and has recorded $717 billion in global sales Over the past year, it has been leveraging its market power to raise retail prices on its own and competing sites.
“Amazon has the power to strong-arm sellers elsewhere into raising prices or pulling products from competing retailers so Amazon can protect its profit margins,” Bonta said at a press conference announcing the filing on Monday. “This takes money out of the pockets of California families every day for everyday items, from diapers to clothes to furniture.”
Bonta filed the lawsuit in San Francisco Superior Court in 2022. A preliminary injunction is being sought ahead of trial in January. A hearing on the request has been scheduled for July 23.
Amazon said in a statement on Monday that the legal motion is “a transparent attempt to deflect attention from the weakness of her case, which comes more than three years after she filed her complaint and is based on allegedly ‘new’ evidence that she has had for years.”
“Amazon is consistently recognized as America’s lowest-priced online retailer, and we are proud of the low prices customers receive when shopping at our stores. Amazon looks forward to responding to the court at the appropriate time,” the statement said.
Walmart said in a statement: “We do not comment on litigation to which we are not a party. We will always work hard on behalf of our customers to keep our prices low.”
Lewis Strauss did not immediately respond.
The lawsuit is the latest to allege that the Seattle-based retailer engaged in price fixing.
The Federal Trade Commission, 18 states and Puerto Rico have accused the company of abusing its market position to raise prices on other online retail platforms, overcharging sellers and suppressing competition. The 2023 federal lawsuit filed in Seattle largely mirrors the California case.
The lawsuit, which has yet to be heard, seeks a permanent injunction that would prevent Amazon from engaging in unlawful conduct and loosening its “monopoly control” to restore competition.
Last year, Amazon agreed to pay $2.5 billion to settle another 2023 FTC lawsuit that accused Amazon of deceiving people into automatically renewing Amazon Prime memberships through “manipulation, coercion, or deceptive user-interface design” and complicating unsubscribing.
Under the settlement, one of the FTC’s largest actions, 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 innovation for customers.”
The 19-page document filed Monday in San Francisco Superior Court provides details about Amazon’s alleged price-fixing scheme, gleaned primarily from emails between Amazon and sellers selling products on its site.
The exchange between Amazon and Levi Strauss was cited as one of three methods used by the online retailer to fix and raise prices.
The alleged Levi Strauss scheme outlined in the document involved fulfilling price-matching pledges that would result in Amazon or competitors putting “downward pressure on the price” by agreeing to raise the price through a common seller or making the product temporarily unavailable so that the price could rise.
In another alleged scheme, Amazon raised prices on price-matched items and asked its sellers to raise their prices to competitors. The lawsuit alleges that in one instance, Amazon raised the prices of more than 10 pet treats sold at a publicly traded rival retailer, Chewy Pet Food & Supplies.
Chevy did not immediately respond to a request for comment.
The third alleged scheme involved a seller, at Amazon’s request, taking products from a competing retailer that sold them at a much lower price than Amazon. The lawsuit cites four products that a furniture seller agreed to stop making available to an unnamed competitor because of their low prices.
According to the filing, the seller emailed Amazon, “If the problematic retail(er) is not fixed by the end of the week, we will discontinue (these products) from your problematic competition to ensure that Amazon can return to a healthy position with these items.”
According to the filing, Amazon warned the furniture seller that if the pricing issue was not resolved, it would remove all four of its products from Amazon’s website “in the next few days” — just ahead of the crucial sales days of Black Friday and Cyber Monday.
Bonta said his office was “focusing” on Amazon in its case, not sellers and other retailers, adding that they were setting prices they thought were fair before Amazon’s intervention.
In seeking an injunction, Bonta’s office argues that Amazon “threatened severe consequences if sellers did not comply. Sellers, intimidated by Amazon’s overwhelming bargaining advantage and fearful of punishment, complied,” according to the filing.
The injunction would bar Amazon from communicating with its sellers about the prices of its products on other online sites, among other restrictions. Bonta is also seeking a court-appointed monitor to monitor Amazon’s practices, compensation for customers and damages while the case is heard.
The attorney general’s office previously filed evidence in court in February but the document was removed from public view.
