A Washington, D.C. appeals court revived the district’s lawsuit against Amazon.com Inc. on Thursday, ruling that the online retailer’s pricing policies could plausibly stifle competition.
This decision reverses a previous ruling that dismissed the lawsuit, which accuses Amazon of restricting its suppliers and third-party sellers on Amazon.com, thereby harming competition.
Amazon is currently seeking to dismiss a similar case brought by the U.S. Federal Trade Commission and more than a dozen states. Tim Doyle, an Amazon spokesperson, expressed the company’s disagreement with the appeals court ruling, asserting that Amazon’s policies benefit consumers.
He stated, “Just like any store owner who wouldn’t want to promote a bad deal to their customers, we don’t highlight or promote offers that are not competitively priced.”
D.C. Attorney General Brian Schwalb welcomed the court’s decision, stating, “We will continue fighting to stop Amazon’s unfair and unlawful practices that have raised prices for District consumers and stifled innovation and choice across online retail.”
The District of Columbia sued Amazon in May 2021, claiming the company effectively bans third-party sellers from offering products at lower prices elsewhere by refusing to highlight their listings if they do.
The lawsuit also alleges that Amazon’s agreements with wholesalers guarantee the company a minimum profit.
If Amazon lowers a price to compete with another online seller, the wholesaler must pay Amazon the difference between the selling price and the agreed minimum, creating a disincentive for wholesalers to reduce prices to compete.
The D.C. appeals court criticized the judge who dismissed the case in May 2023, stating that the judge set the bar too high and that the attorney general presented a plausible claim that Amazon’s practices harm competition in the online retail marketplace.
