Amazon Sued by Customer Over Third Party Seller Practices

On March 19, plaintiffs Deborah Frame-Wilson and Christian Sabot filed an antitrust complaint against Amazon. They accuse the retail giant of “engaging in a pricing scheme that broadly and anticompetitively impacts virtually all products offered for sale in the U.S. retail e-commerce market.” The case is being held before the Washington Western District Court.

Frame-Wilson and Sabot claim that Amazon’s “fair pricing” provision forces anticompetitive behavior among third-party sellers. The policy states, “[a]ny single product or multiple products packages must have a price that is equal to or lower than the price of the same item being sold by the seller on other sites or virtual marketplaces.” This means that third-party retailers are penalized for offering “lower prices outside of the platform.” The complaint claims that Amazon “demonstrates an abuse or attempted abuse of monopoly power in violation of Section 2 of the Sherman Act.”

The “fair pricing” policy is not new to Amazon, according to the complaint, because the company’s Business Solutions Agreement (BSA) formerly included a similar “price parity” provision, which “directly prohibited third-party sellers on [the] platform from selling their products at a lower price through competing retail e-commerce channels.” Amazon withdrew this provision after the Federal Trade Commission threatened an investigation.

The plaintiffs seek certification of a class of others who might also be affected by Amazon’s allegedly anticompetitive behavior. The proposed class consists of anyone who purchased “class products,” which are items “sold through a retail e-commerce channel other than the platform.” These products must be “concurrently offered by Amazon’s third-party sellers on the platform.”

The number of products affected by the “fair pricing” provision is unknown to the plaintiffs. However, based on publicly available information, they estimate this number to be over 600 million.

As a result of Amazon’s alleged anticompetitive behavior, the plaintiffs seek actual damages, statutory damages, and punitive damages.