Last Friday, Judge Richard A. Jones handed the plaintiffs partial victory in the antitrust suit alleging that Amazon.com Inc.’s pricing parity policies drive up the price of goods sold concurrently on competing platforms. The court’s 26-page opinion analyzed the Amazon shoppers’ Section 1 and 2 Sherman Act claims before dismissing all, more than three dozen, state antitrust and consumer protection claims for failure to sufficiently allege facts establishing the elements of each.
With the case’s second birthday just around the corner, Judge Jones recounted how the plaintiffs took issue with an Amazon “price parity” provision requiring sellers to maintain equal prices between products they listed on the Amazon platform and those on external platforms. Reportedly the Federal Trade Commission threatened Amazon with an investigation, effectuating the policy’s elimination in March 2019.
However, in their August 2020 amended complaint, the plaintiffs argue that Amazon continued the practice through its current “fair pricing” provision. The company reportedly monitors prices across platforms like eBay or Walmart.com and takes adverse action against third-party sellers who offer their products for less elsewhere. “The pricing restraint, Plaintiffs contend, thus prevents sellers from reducing prices of their products on external platforms with lower fees,” the opinion summarized.
The court first focused on whether the putative class of Amazon product purchasers had antitrust standing to bring the suit. Judge Jones concluded they did under the theory that third-party sellers are co-conspirators, even if unwittingly so, rendering the plaintiffs direct purchasers of the supra-competitively priced goods.
The Seattle, Washington court then addressed the plaintiffs’ Sherman Act Section 1 claim under a per se analysis, finding it “conclusory and unsupported.” As to the plaintiffs’ rule of reason claims, the court took a closer look at Amazon’s three arguments: failure to establish a relevant market, anticompetitive conduct, and antitrust injury.
The court accepted the plaintiffs’ market definition, the “U.S. retail e-commerce market,” defined as “all products subject to Amazon’s anti-competitive policies,” meaning products concurrently sold on Amazon and another e-commerce retail channel. Judge Jones found it probative that the e-commerce market is widely recognized and sufficiently distinct from brick-and-mortar retail, though some products are sold in both.
As for anticompetitive conduct, the court opined that Amazon’s policy, stated another way, “requires sellers to add Amazon’s fees to the cost of their products when they sell them on all external platforms.” Judge Jones found this sufficient for the plaintiffs’ prima facie case. Correspondingly, the court was persuaded that the plaintiffs met their burden as to antitrust injury by alleging higher prices but for Amazon’s pricing policies.
Turning to the state claims, the court dismissed 20 of them for failure to put forward a representative plaintiff. In addition, Judge Jones said that all had to be dismissed for failure to allege the specific elements of each cause of action. As for unjust enrichment, the opinion concluded that the plaintiffs pleaded no facts consistent with the claim that they conferred a benefit to Amazon, causing it to fall short.
The court granted leave to amend and ordered the plaintiffs to file their revised pleading within 30 days.