Consumers Predominantly Survive Amazon’s Motion to Dismiss in Class Action Antitrust Lawsuit

On Monday, the Western District of Washington issued a mixed order largely in favor of the plaintiff consumers in response to Amazon’s motion to dismiss in the class action antitrust case De Coster et al v. Inc.

According to the order, the named plaintiffs are residents of Maryland, Washington, D.C., Illinois, Texas, Tennessee and Connecticut who purchased numerous goods from Amazon’s marketplace including goods listed by third-party merchants. Further, the plaintiffs filed the present lawsuit to challenge Amazon’s pricing practices regarding third-party merchants, alleging that the practices are anti competitive in violation of the Sherman Antitrust Act. 

Specifically, the order states, during the relevant period, Amazon imposed a Most Favored Nation Policy and Fair Pricing Policy on third-party merchants preventing them from listing their goods for a lower price on competing marketplaces or other websites. Amazon’s Most Favored Nation Policy and Fair Pricing Policy do not allow third-party merchants to sell their goods on Amazon and/or impose sanctions on the merchant and its goods if the products are sold at a lower price on another website. 

The court states Amazon’s marketplace accounted for over 50% of all online retail sales revenue in the United States when the plaintiffs’ amended complaint was filed and that Amazon is critical to the financial success of its third-party merchants. Additionally, The Amended Complaint asserts Amazon charges higher fees for third-party merchants than competitor marketplaces and that these inflated fees are passed on to customers through higher prices. 

The plaintiffs argue that in a competitive market, third-party merchants would be able to sell their products for less in competitor marketplaces, but Amazon prevents this type of competition through its Most Favored Nation and Fair Pricing Policies. Accordingly, the plaintiffs filed the present lawsuit alleging per se and non-per se violations of Section 1 of the Sherman Act along with monopolization and attempted monopolization in violation of Section 2 of the Sherman Act. 

Amazon subsequently responded with a motion to dismiss alleging the plaintiffs failed to state a claim leading to the present order.

In the order, the court held the plaintiffs failed to allege facts to warrant a per se liability under Section 1 of the Sherman Act because they failed to show an agreement to fix prices with competing retailers. Accordingly, the court granted Amazon’s motion to dismiss regarding the per se claim and dismissed the claim. Conversely, the court denied Amazon’s motion to dismiss regarding all other claims brought by the plaintiffs. 

The plaintiffs are represented by Quinn Emanuel and Hagens Berman, while Amazon is represented by Davis Wright Tremaine.