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Amazon Wins Dismissal of D.C. Antitrust Lawsuit Over Pricing
Attorney general’s office said it is considering appealing the ruling
Amazon has argued that pricing restrictions in its contracts with sellers are common in the retail industry and entirely legal.PHOTO: JOHANNES EISELE/AFP/GETTY IMAGES
By John D. McKinnon Follow
March 18, 2022 7:16 pm ET
WASHINGTON— Amazon. AMZN 2.55% com Inc. won dismissal on Friday of an antitrust lawsuit brought against it by the District of Columbia, which had alleged that the company harmed consumers by blocking sellers on its marketplace from offering better deals elsewhere.
The lawsuit was tossed out by D.C. Superior Court Judge Hiram Puig-Lugo, according to a docket entry, based on Amazon’s motion to dismiss. The motion was opposed by D.C. Attorney General Karl Racine, whose office said it was considering an appeal.
“We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing and a recent decision of a federal court to allow a nearly identical lawsuit to move forward,” a spokeswoman for the D.C. attorney general said on Friday.
“We are considering our legal options and we’ll continue fighting to develop reasoned antitrust jurisprudence in our local courts and to hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor,” the spokeswoman said.
Amazon argued in its motion to dismiss the D.C. lawsuit that pricing restrictions in its contracts with sellers are common in the retail industry and entirely legal.
The company also argued that the lawsuit would hurt consumers if it succeeded.
“One of Amazon’s core business objectives in serving its customers is to have a reputation for low prices, and Amazon works constantly to maintain that reputation by offering competitively priced products in its store,” Amazon said in its motion to dismiss, filed in October. “The District’s case, if allowed to proceed, would undermine this pro-consumer approach.”
The D.C. attorney general’s office argued that it was Amazon that was driving up prices.
The case was brought under District of Columbia law rather than federal law, and its immediate impact would have been limited even if it had succeeded.
Still, the case has marked an early effort to challenge Amazon’s practices as anticompetitive at a time when other big tech companies such as Facebook parent Meta Platforms Inc. and Alphabet Inc.’sGoogle unit have been sued repeatedly by federal and state authorities. Both companies have denied any anticompetitive behavior.
Amazon “has made online shopping more expensive for consumers through its anticompetitive agreements that prevent sellers from offering lower prices on and to competing online marketplaces,” the District said in its response. “These agreements curtail competition, resulting in higher prices, lower innovation and fewer choices for consumers.”
Until 2019, Amazon explicitly prohibited U.S. sellers from offering their products at a lower price or better terms elsewhere online, the lawsuit says. Amazon removed that policy but replaced it with a new “Fair Pricing Policy” that was an “effectively identical substitute,” the lawsuit says.
The Fair Pricing Policy allows sellers to set their own prices, according to Amazon. The company also monitors prices elsewhere on the web. If a seller offers a product on Amazon for a higher price than listed elsewhere, Amazon might not feature that seller’s offer.
The e-commerce giant has said the policy is designed to protect consumers from being overcharged and to give sellers information so that their offers can be featured. The company says it decides which offers to feature based on price, delivery speed and other factors.
Mr. Racine, D.C.’s attorney general, has said the policy ends up hurting consumers because it leads sellers to choose not to offer lower prices on other websites, even when the sellers might want to do so.
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