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.
The issue I’ve had with the “Just shop somewhere else. Don’t use Amazon” is that it’s very US-specific response. Amazon has absolutely dominated the online shopping space in Canada for years because they are one of the few companies that dealt with the biggest reason why shopping online in Canada has been difficult: Shipping. $20-$40+ domestic shipping fees are normal in Canada for most other retailers which means you could be paying double the cost of your order (or more) just on shipping alone, so as soon as Amazon came in and offered free coast-to-coast shipping they had basically won the market instantly. There were teething issues, of course, and their earlier shipping contractors were horrendous but they did smooth most of that out.
Nowadays they still have very little competition that can beat them on shipping, but there are more and more options popping up. There are some Canadian online stores that offer free shipping or free if over a certain reasonable amount. The COVID pandemic really pushed a lot of local retailers to set up affordable online ordering and delivery systems for local customers, so that has also become an option. Aliexpress has also greatly improved their free shipping process to Canada and considering most of what Amazon sells is just rebranded Aliexpress stuff, it’s a great way of getting the same items for cheaper if you’re ok waiting a few extra days. So most of my online purchases these days have been a mixture of Canadian retailers and Aliexpress.