ROCC Applauds AG Bonta’s Investigation into Amazon’s Price Fixing

On February 22, California Attorney General Bonta filed a motion for preliminary injunction seeking an immediate halt to Amazon’s illegal price fixing behavior ahead of the January 2027 trial in its antitrust case against the dominant e-commerce platform.

The motion comes after evidence uncovered during the discovery phase exposed how Amazon has engaged with vendors and competitors to artificially fix and inflate prices, “spanning years and many different employees and product lines.” California argues this behavior expressly violates the state’s Cartwright Act (one of two laws involved in the underlying case), under which any combination which tampers with price structures is illegal per se.

California’s injunction identifies and aims to stop three price fixing schemes that Amazon used in collaboration with its vendors and other competitors to drive up prices for consumers:

(1) “Breaking the Price Match”: In a competitive market economy, rival companies compete to offer the best price to consumers, driving down prices to the lowest profitable point. However, when Amazon and a competitor are price matching, they will knowingly agree to break the match if it allows for a price increase. Sometimes, one party will even make a product temporarily unavailable, reducing supply and allowing their competitor to offer a higher price. When the product becomes available again, the new higher price becomes the base price for both sellers. 

(2) “Increasing the Competitor Retail Price”: When a competitor offers a product for a discounted price, Amazon will make a request through a vendor to increase the price, denying consumers a better offer. 

(3) “Removing the Product”: When a competitor offers a lower price than Amazon, a vendor will often respond to Amazon’s demands for increased prices by removing the product entirely, allowing Amazon to continue to offer the item at the higher price and entirely denying consumer access to the product from the previously lower-priced competitor.

California further alleges that Amazon has used coercive tactics against vendors to ensure compliance with its price fixing scheme, such as Guaranteed Minimum Margin agreements (GMMs) and Matching Compensation Program payments (MCPs). GMMs and MCPs both require vendors to compensate Amazon for losses accrued when the platform price lowers its price to match other retailers. GMMs were already a substantial part of California’s initial complaint, which did not specifically identify the schemes above. The complaint and motion both note how Amazon’s market dominance gives it substantial bargaining power over vendors, most of whom rely on the platform for the majority of their sales.

Amazon’s communications with its vendors and competitors show ample evidence of these anticompetitive behaviors and are cited extensively in the motion, though many of the details are redacted from public view. Redacted portions also indicate that Amazon has other methods for coercing vendors, such as through threats and unfavorable terms, and that it instructs employees to conceal evidence of price fixing. 

California’s motion for preliminary injunction seeks to halt Amazon’s “most egregiously unlawful conduct” before the full case is tried in January 2027, preventing Amazon from coordinating with vendors and non-Amazon retailers to influence prices across the retail sector. In addition to halting the three schemes above, California seeks an order stopping Amazon from communicating with vendors by any means about prices, deals, or products at any non-Amazon retailer, and from ordering vendors to pay money when Amazon matches a lower retail price offered elsewhere. 

Under California’s legal standard for preliminary injunctions, “a rebuttable presumption arises that the potential harm to the public outweighs the potential harm to the defendant” once the government establishes a reasonable probability of prevailing on the merits of its claim. California believes this standard is easily met, as Amazon’s alleged price fixing schemes could violate at least 5 separate provisions of the Cartwright Act.

If this presumption is adopted, the court would have to find that Amazon was at risk of “grave or irreparable harm” from the preliminary injunction to trigger review of the balance of harms on both sides. The motion claims that Amazon will be unable to prove such harms, as a “party suffers no grave or irreparable harm by being prohibited from violating the law” and precedent establishes that economic loss is insufficient where the injunction only prohibits specific activities and does not stop the defendant from doing business. 

The San Francisco County Superior Court will hold a hearing on the preliminary injunction motion on April 14. The parties’ latest case management conference indicates that fact discovery has closed (with limited matters still outstanding) and expert discovery is scheduled to close August 5. Trial is scheduled to begin January 19, 2027. 

Outside of California, multiple authorities are working to rein in Amazon’s monopoly power over third-party sellers. Amazon faces claims under the Sherman Antitrust Act, FTC Act, and multiple state laws in FTC v. Amazon, which is set to go to trial in March 2027. The D.C. Attorney General’s case against Amazon is set to go to trial in September 2027, after a four-month delay caused by the U.S government shutdown in October. All of these cases are critical to address Amazon’s anticompetitive conduct that has harmed American consumers and small businesses. As such, the Responsible Online Commerce Coalition applauds and strongly supports these U.S. state and federal actions.