The state of California’s long‑running fight with Amazon just hit a new level. Years ago, the state went after Amazon’s contracts with sellers. Now, newly unsealed emails have California saying out loud what many critics have only suspected — that Amazon and its partners weren’t just nudging prices, they were allegedly coordinating them.
How the California Case Evolved
In 2022, California Attorney General Rob Bonta brought a lawsuit against Amazon in San Francisco Superior Court under the state’s Unfair Competition Law and Cartwright Act. He alleged that the e-commerce giant used “anticompetitive practices” that “stifled competition and caused increased prices across California.”
According to the state, Amazon required merchants to sign contracts that “severely penalize” them if their products were listed for a lower price on any other online site, including Walmart, Target, eBay, or even the merchants’ own websites. The California Attorney General alleges that these terms discouraged merchants from offering discounts elsewhere on the internet because doing so could trigger sanctions from Amazon, and that this setup prevented rival retailers from competing on price and helped cement Amazon’s dominance in the online marketplace.
From the outset, California framed Amazon as a must-have distribution channel that most merchants could not realistically walk away from. The state pointed to survey data showing that many consumers go straight to Amazon when they are ready to buy. It also noted that Prime members are more likely to purchase there than on any other online store.
Because other platforms often charge lower fees, the state said merchants would like to offer lower prices off‑Amazon, but do not. Doing so risks sanctions such as loss of the Buy Box, reduced visibility, or other penalties. California says this leaves sellers with few options other than to accede to Amazon’s demands and set prices above competitive levels, even on sites that could otherwise have charged less.
New Allegations Come to Light
Before discovery, California’s theory was that Amazon’s contracts and market power were structurally suppressing price competition. The newly revealed emails add a sharper allegation that Amazon, vendors, and rival retailers were not just constraining competition, but explicitly agreeing to price hikes on other sites so Amazon could protect its margins.
This past February, after what the Attorney General describes as a “robust discovery process,” the state moved for a preliminary injunction. This was based on internal emails and other materials that the AG says show “plainly unlawful” price fixing. According to the filing, those communications reflect explicit agreements to raise retail prices, with Amazon allegedly refusing to compete on lower prices and instead pressuring vendors — and sometimes working in tandem with competitors — to keep prices higher so it can preserve its profit margins at consumers’ expense.
An Email‑Based Price-Fixing Scheme
California says the newly unsealed emails reveal three recurring price‑fixing patterns, which the Attorney General’s memorandum characterizes as distinct schemes.
In what the memo calls “Breaking the Price Match,” Amazon and a rival begin with identical prices on the same product, a situation that would normally drive prices down. Instead, the state claims that, working through a shared vendor, one company agrees to end the match by either raising its price or briefly pulling the product, which then enables the other company to follow suit and sell at a higher market price.
In a second scheme the memo titles “Increasing the Competitor Retail Price,” a competitor initially undercuts Amazon, and Amazon allegedly uses vendors as intermediaries to push that rival to raise its price so Amazon can match the new, higher level. According to the memorandum, Amazon does this by giving vendors detailed information about competitors’ prices and asking them to secure an increase, so a discounted offer becomes more expensive and consumers pay more.
A third scheme, which the Attorney General describes as “Removing the Product,” applies when a competing site sells at a lower price than Amazon. Rather than match, the state says Amazon pressures vendors to pull the product from that cheaper site, eliminating the low‑priced option so Amazon can raise its own price. In one cited exchange, Amazon highlights the lower price, sends a chart explaining how removal would support higher pricing, and the vendor “assured Amazon that it would” act.
Price Fixing Per Se
Taken together, the email chains behind these three schemes are the reason California now says the case is no longer just about restrictive contracts that indirectly dampen competition. It argues that the record now shows classic price‑fixing arrangements that are illegal on their face. The memorandum emphasizes that under the Cartwright Act, “any combination which tampers with price structures” is “illegal per se,” and that California courts apply that rule to both horizontal agreements among competitors and vertical agreements between suppliers and competing retailers.
By “Breaking the Price Match,” “Increasing the Competitor Retail Price,” and “Removing the Product,” the state contends that Amazon and its partners are agreeing on higher prices for goods offered to consumers. In the Attorney General’s view, these practices violate multiple pricing provisions of the Cartwright Act and make it “highly likely” that the People will prevail on their claim that Amazon is fixing retail prices.
What’s Next?
At this point, California is asking the judge for one main thing: to put guardrails on Amazon’s pricing power while the case moves toward trial. The state wants the court to stop Amazon from working with vendors or rival retailers in ways that could coordinate prices, and to install a monitor to make sure any limits the judge sets are actually followed.
The next big question is whether the judge will step in before trial. If the judge grants the preliminary injunction, Amazon could immediately face new restrictions on how it handles pricing discussions with its vendors. If the court denies it, Amazon’s current practices will continue while the case moves toward a full trial. Either way, the coming hearings will show how far courts are willing to go in reining in a dominant online retailer’s pricing power.
Related Resources:
- Amazon's Pricey Secrets Lead to FTC Lawsuit for Antitrust Violations (FindLaw’s Courtside)
- Proposed Class-Action Lawsuit Alleges That Amazon Prime Day Is Not Okay (FindLaw’s Law and Daily Life)
- Amazon Settles for $2.5 Billion Over Misleading Prime Membership Sign-Ups (FindLaw’s Law and Daily Life)
