Amazon.com Inc. lost its bid to end federal antitrust litigation in Seattle over allegations that its “most favored nation” policies for merchants drove up prices on the internet.
Judge Ricardo S. Martinez let most of the proposed consumer class action lawsuits go forward Tuesday in U.S. District Court for the Western District of Washington. Although the case’s complex antitrust theories are novel, they are legally plausible, the judge said.
“The plaintiffs’ allegations, while complicated, are not as complicated as Amazon would like them to be,” he wrote. “The fact that no court has ever found that a policy like this violates the Sherman Act does not, in itself, make these claims implausible.”
The decision, which comes a day after the Justice Department announced a potentially landmark trial for Alphabet Inc. the dominance of digital advertising markets – represents the latest in a growing wave of antitrust challenges facing the tech industry in general and Amazon in particular.
The allegations echo several other cases Amazon is facing, including lawsuits filed by attorneys general in California and Washington, D.C., and class action lawsuits targeting specific industries, such as the online sale of books and books. electronics. The Washington, DC case is on appeal after being dismissed in March 2022.
Amazon has also been accused of rigging its algorithms to penalize third-party sellers who fail to use its shipping, logistics and fulfillment services. Meanwhile, many of the same business practices have caught the attention of lawmakers seriously examining Silicon Valley for the first time in decades.
Amazon’s ‘premature’ defenses
Tuesday’s ruling was the second from a federal judge in Seattle to tentatively embrace the idea that Amazon’s “fair pricing” policies toward sellers on its platform have inflated the online cost of virtually everything. Judge Richard A. Jones let an almost identical case move forward in March 2022.
The other case, brought by another consumer group, claims most-favoured-nation clauses effectively force Amazon’s rivals to adopt its own unusually high merchant fees. The lawsuit before Martinez involves the subtly different theory that the same basic mechanisms allow Amazon to keep its own prices high, sparing it from the competition.
In his ruling, Martinez acknowledged Amazon’s “intense and extensive legal arguments” against the idea that online sellers operate in a separate market without meaningful competition from physical stores. But those arguments “are fact-based and premature,” he said.
The company is “essentially asking the court to hear expert testimony at the motion to dismiss stage of the litigation,” the judge wrote. “That’s not how civil litigation is supposed to go.”
He narrowed the case, however, saying the relationships between Amazon, its merchants, rival platforms and consumers are too complex to accommodate any legal theory alleging antitrust violation per se. Pricing policies must be considered in light of their actual effect on competition in all circumstances, Martinez said.
Quinn Emanuel Urquhart & Sullivan LLP, Keller Rohrback LLP and Milberg Coleman Bryson Phillips Grossman PLLC are the consumer attorneys. Amazon is represented by Davis Wright Tremaine LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.
The case is De Coster v. Amazon.com Inc., WD Wash., No. 21-cv-693, 1/24/23.
. Amazon condemned make face a case antitrust regarding policy prices merchants