California Attorney General Rob Bonta last night filed a request for a preliminary injunction in California’s existing case against Amazon for price fixing. Attorney General Bonta’s 2022 lawsuit alleged that the company stifled competition and caused increased prices across California through its anticompetitive policies in order to avoid competing on price with other retailers. New evidence paints a clearer and more shocking picture. The motion for a preliminary injunction comes after a robust discovery process where California uncovered evidence of countless interactions in which Amazon, vendors, and Amazon’s competitors agree to increase and fix the prices of products on other retail websites to bolster Amazon’s profits. Time and again, across years and product categories, Amazon has reached out to its vendors and instructed them to increase retail prices on competitors’ websites, threatening dire consequences if vendors do not comply. Vendors, bullied by Amazon’s overwhelming bargaining leverage and fearing punishment, comply — agreeing to raise prices on competitors’ websites (often with the awareness and cooperation of the competing retailer), or to remove products from competing websites altogether. Amazon’s goal is to insulate itself from price competition by preventing lower retail prices in the market at the expense of American consumers who are already struggling with a crisis of affordability.
Unfortunately, they are a master at driving local businesses out of money. Buying a certain pet food at my local retailer (a franchisee) would be about $30. On Amazon, it’s $25 (and sometimes even $15-20, if you do the subscription discount). At the local store, I’d have to pay more and drag the stuff home on my own feet.
It’s the Walmart model. A lot of the frustration is that it’s a systemic problem where individuals are incentivized against their best interests and the best interests of their communities.
Because shareholders. The Line, must go up.
Thankfully (/s) Amazon has enough money that it’s cheaper to bribe politicians than provide a better product. So systemic solutions are that much more difficult.