10-19-2024 8:36am

Judge Rejects Amazon’s Motion To Dismiss Federal Trade Commission Lawsuit Against Company

Chris Edwards Editor

The Federal Trade Commission, et al. v. Amazon.com, Inc. is a lawsuit brought against the multinational technology company and online retailer Amazon in 2023. The Federal Trade Commission (FTC), joined by the attorneys general of seventeen U.S. states, alleges that Amazon holds and abuses an online retail monopoly. The lawsuit claims that Amazon used its position as a fulfillment network provider and e-commerce superstore to prevent competitors from gaining ground.

The case, filed in the U.S. state of Washington, alleges that Amazon took part in a number of anti-competitive practices.

The FTC and states allege Amazon's anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.

The alleged anticompetitive practices include:

Anti-discounting measures
Conditioning sellers' ability to obtain Amazon Prime eligibility for their products

and seeking to extract monopoly rents by:

Replacing organic search results with paid advertisements and "junk" ads
Biasing Amazon's search results
Charging costly fees to sellers

The plaintiffs are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in these practices.

Ron Knox, senior researcher and policy advocate at the Institute for Local Self-Reliance (ILSR), issued the following statement on the news that a federal judge denied Amazon’s attempt to dismiss the (FTC) monopolization and unfair competition lawsuit against the company:

“Judge John Chun’s decision to deny Amazon’s motion to dismiss, and to instead send the case to trial, sends an important message to Amazon and to other abusive monopolies: A strong monopoly lawsuit deserves its day in court, and any attempt to get a well-pleaded case thrown out prior to trial will likely fail.

“Judge Chun’s ruling is yet another sign that federal judges across the country are recognizing the importance of hearing well-pleaded monopolization cases at trial, where all evidence of a company’s alleged abusive conduct can be properly heard.

“The ruling also marks yet another victory for the FTC in its ongoing work to take on abusive monopolies, stop harmful mergers, and challenge predatory corporate power across the economy.”
The Institute for Local Self-Reliance (ILSR) claims that most Americans believe that Amazon’s outsized power is dangerous and must be reined in. A recent poll found that nearly 80 percent of voters believe Amazon should be subject to greater regulation, and more than half support breaking it up.

Per a 2021 report published by ILSR as Amazon has grown, the number of independent businesses has fallen. Between 2007 and 2017, the number of small retailers fell by 65,000.[8] About 40 percent of the nation’s small apparel, toy, and sporting goods makers disappeared, along with about one-third of small book publishers.[9] Small is defined here as under 500 employees.

It is alleged that while Amazon touts sellers as “partners” in public, within the company, it refers to them as “internal

competitors.”[15] Both the House investigation and reporting by the Wall Street Journal have found that Amazon has spied on sellers and appropriated data about their sales, costs, and suppliers. It’s then used this information to create its own competing versions of their products, often giving its versions superior placement in the search results.[16]

Amazon has also been caught using its venture capital fund to invest in startups, only to steal those startups’ ideas and create rival products and services. In some cases, “Amazon’s decision to launch a competing product devastated the business in which it invested.”[17]

Thus the case moves forward in the Federal Courts...