Amazon has accused Walmart of trying to coerce its technology suppliers into rejecting Amazon's cloud computing service in favour of rival platforms.
The fallout follows on from a report in the Wall Street journal, which revealed the US retail chain had told the technology companies it works with to stop using Amazon cloud web services and move to competitors instead.
Amazon has become a dominant player in cloud-based storage and computing power with its Amazon Web Services program. Known as AWS, it has a 44% share of the market, according to Synergy Research Group, and its clients include Netflix, Airbnb, General Electric and the CIA.
In April the company reported its cloud services platform had generated $3.7bn in sales over the previous three months.
Now with Walmart aggressively investing in e-commerce, it is trying to undermine its rival's dominance in the space.
A spokesperson for Walmart confirmed to the WSJ that Walmart pushed for its tech suppliers to use competitors because it wanted to protect sensitive company data from a major competitor.
"Our vendors have the choice of using any cloud provider that meets their needs and their customers' needs," he said.
"It shouldn't be a big surprise that there are cases in which we'd prefer our most sensitive data isn't sitting on a competitor's platform."
Amazon responded saying Walmart's view of the AWS was misguided.
"We've heard that Walmart continues to try to bully their suppliers into not using AWS because they have an incorrect view that AWS is somehow supporting Amazon's retail business," said a spokesman.
"Plenty of suppliers are standing up to Walmart and refusing to be told that they can't use [us]. Tactics like this are bad for business and customers and rarely carry the day."
The row comes at a time when Amazon is expanding its shopping operations after acquiring groceries chain Whole Foods $13.7bn.
It also recently struck a deal with Nike to sell the sports brand's shoes directly, and announced the launch of Prime Wardrobe - a service that lets customers order and try clothes for seven days before deciding which to buy and keep.