Appeals Court Orders Amazon to Face D.C. Antitrust Lawsuit: Major Setback for Retail Giant

On August 22, an appeals court in Washington revived the district's lawsuit against Amazon.com Inc, ruling that the case plausibly alleges the online retailer’s pricing policies unlawfully suppress competition.

The District of Columbia (D.C.) Court of Appeals overturned a previous decision that had dismissed the lawsuit. The lawsuit accuses Amazon of harming competition by imposing restrictions on its suppliers and third-party sellers on Amazon.com.

Amazon is also currently seeking the dismissal of another case involving similar allegations made by the US Federal Trade Commission and over a dozen states.

Amazon spokesperson Tim Doyle expressed the company’s disagreement with the appeals court’s decision and stated that they look forward to demonstrating how their policies benefit consumers.

“Just like any shop owner who wouldn’t want to promote a poor deal to their customers, we don’t highlight or promote offers that are not competitively priced,” he said.

D.C. Attorney General Brian Schwalb welcomed the court’s ruling in a statement.
“We will continue fighting to end Amazon’s unfair and unlawful practices that have increased prices for District consumers and stifled innovation and choice across online retail,” he said.

The District of Columbia sued Amazon in May 2021, claiming that Amazon effectively prohibits third-party sellers from offering products at lower prices elsewhere by refusing to highlight their listings if they do so.

The lawsuit also asserts that Amazon has agreements with wholesalers guaranteeing it a minimum profit. As a result, the complaint alleges that if Amazon lowers a price to compete with another online seller, the wholesaler must compensate Amazon for the difference between the selling price and the agreed minimum.

These payments disincentivise wholesalers from lowering prices to compete, the complaint claims.
The D.C. Court of Appeals ruled that the judge who dismissed the case in May 2023 had set the bar too high, stating that the Attorney General had a plausible claim that Amazon’s practices harmed competition in the online retail marketplace.

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