California is accusing Amazon of orchestrating a price-fixing scheme that pushes wholesale vendors to raise prices at competing retailers, including Target, Walmart, Chewy and Best Buy. The state says that after the discovery process it now has documentary evidence to support the claim.
The case centres on email exchanges between Amazon vendor managers and brands such as Levi's, GlobalOne, Hanes and Scotts Miracle-Gro. Hundreds of pages of documents and more than a dozen email chains were reviewed as part of the investigation into whether Amazon uses its position as the largest e-commerce company in the United States to compel vendors to lift prices at rival stores.
Third-party sellers have also come forward with similar accounts. The inventors of the Bed Scrunchie, a consumer product sold on Amazon, say they too were pressured by the company to raise prices at other retailers. Their complaints echo the pattern alleged in the state's case.
The lawsuit, filed by California, alleges that Amazon's vendor managers contacted brands directly to demand higher prices on competing platforms. Internal emails cited in the case are said to show Amazon representatives instructing vendors to increase prices at retailers such as Target and Walmart. The state argues this behaviour amounts to price-fixing and harms competition.
Amazon has responded to the allegations, though the company's full defence has not been detailed in the public filings reviewed. The e-commerce giant has previously maintained that its practices are lawful and benefit consumers by keeping prices low.
At the heart of the dispute is Amazon's use of anti-discounting algorithms. These automated systems are designed to detect when products are priced lower elsewhere and can penalise sellers by removing them from the prominent «Buy Box» or making their listings less visible. Sellers say this creates an incentive to keep prices high on other platforms, because Amazon's algorithms effectively punish them for offering better deals elsewhere.
The case file includes specific email exchanges. In one set of messages, Amazon vendor managers are said to have contacted Levi's about pricing on competing sites. Similar exchanges involved GlobalOne, a supplier whose products are sold through Chewy, and Scotts Miracle-Gro. An ice cream maker was also drawn into the correspondence, according to the documents.
Business Insider obtained the full case file and reviewed the material, speaking with several third-party sellers who described the pressure they face. These sellers say Amazon's demands are not isolated incidents but part of a broader pattern that affects how they price their goods across all retail channels.
The broader concern is Amazon's market power. As the dominant online marketplace in the US, the company controls access to a vast customer base. Sellers argue that this gives Amazon leverage to dictate pricing strategies far beyond its own platform, effectively setting a floor for prices across the retail sector.
Amazon's seller fees add another layer of complexity. Sellers complain that the fees they pay to Amazon — for storage, fulfilment and advertising — already squeeze their margins. When combined with pressure to keep prices high elsewhere, they say the economics of selling online become increasingly difficult.
The California lawsuit is one of several regulatory challenges Amazon faces. The outcome could have significant implications for how the company operates and for the wider retail market. If the state succeeds, it may force changes to Amazon's vendor management practices and its use of pricing algorithms.
For now, the case continues, with both sides preparing for the next stage of litigation. The documents reviewed offer a rare glimpse into the behind-the-scenes negotiations between Amazon and the brands that supply its marketplace. Whether they amount to illegal price-fixing will ultimately be decided by the courts.