Amazon’s Secret Price Scheme Exposed in Court Docs
Recently, the California Attorney General's Office revealed a set of previously concealed internal documents accusing Amazon of pressuring third-party sellers on its platform to raise prices on other platforms like Walmart and Target. This was allegedly done to maintain Amazon's price advantage. Amazon has denied any price manipulation. These documents, which include internal emails, testimony records, and confidential company presentations, are part of an antitrust lawsuit filed by California Attorney General Rob Bonta in 2022.
Allegations Against Amazon
The disclosed documents suggest that Amazon uses automated tools to monitor the pricing of sellers on other websites, ensuring that prices on these platforms do not undercut those on Amazon. If a competitor's price is even one cent lower, it could trigger Amazon's attention. The lawsuit claims that if sellers offer lower prices elsewhere, Amazon might remove their “Buy Box” status, significantly impacting sales.
Impact on Sellers
In a confidential testimony, Mayer Handler, head of clothing company Leveret, stated that in October 2022, Amazon informed him that a product lost its “Buy Box” status because it was priced one cent lower on Walmart. Leveret had to adjust prices on other platforms to match or exceed Amazon's prices, even altering product codes to avoid price tracking.
- Leveret adjusted prices to match Amazon.
- Product codes were modified to avoid tracking.
- Sales were significantly impacted by “Buy Box” status.
Amazon's Market Influence
Another testimony from Terry Esbenshade, a garden supplies vendor, revealed that losing the “Buy Box” due to lower prices on other platforms led to an 80% drop in Amazon sales. He had to increase prices on other channels to regain sales performance on Amazon.
California officials also noted that Amazon employees are aware of the impact of these mechanisms on market competition. Internal communications suggest that the “Buy Box” suppression and projects like SC-FOD discourage sellers from competing on other platforms like Temu.
Amazon's Response
Amazon has dismissed these allegations as “completely false and misleading,” asserting that its goal is to offer competitive prices to consumers. The company denies that its agreements with third-party sellers aim to exclude competition or consolidate market dominance.
Market Dynamics
Amazon holds a significant advantage in the U.S. e-commerce sector. By the end of 2022, Amazon accounted for nearly half of U.S. e-commerce retail spending, while Walmart's share was less than 8%. By the third quarter of 2025, Amazon's share increased to 56%, with Walmart at 9.6%.
As the case progresses, the debate over platform rules, pricing mechanisms, and market competition will continue to evolve, impacting the relationship between e-commerce platforms and sellers, as well as regulatory directions.
Upcoming Developments
The case is scheduled to be heard in January 2027. The ongoing controversy is expected to influence the e-commerce landscape and regulatory approaches significantly.
Final Thoughts
The allegations against Amazon highlight the complexities of pricing strategies and market dominance in the e-commerce sector. As the case unfolds, it will be crucial to monitor how these developments affect both sellers and consumers.
Ultimately, the outcome could reshape the competitive dynamics of online retail, emphasizing the need for fair practices and transparent pricing mechanisms.
