Amazon Antitrust Lawsuit Over Pricing Practices Will Proceed

The District of Columbia Court of Appeals has ruled that an antitrust lawsuit over pricing practices at Amazon can proceed. The BCLP firm writes in an article that all businesses operating online marketplaces, or enforcing similar policies, should be mindful of the Court findings in the case.

The District of Columbia Attorney General Office brought the case against Amazon challenging the online retailer’s pricing practices and a superior court dismissed it before it headed to the appeal stage.

The AG’s suit alleged that Amazon’s “price parity provision,” its “fair pricing policy,” and its “minimum margin agreements” force sellers to maintain higher prices across all platforms to avoid penalties from Amazon. These practices reduce consumer choice, stifle competition, and increase prices, according to the suit.

The DC Court of Appeals became one of several courts to reject Amazon’s argument that it is in competition with brick-and-mortar retailers. A judicial consensus is building that online shopping and going to physical stores are two distinct experiences for consumers.

The Court found entirely plausible the DC AG’s allegation that Amazon exerts “substantial market power in the online retail marketplace” despite the same products being available at brick-and-mortar retailers.

Among other findings, the Court ruled that Amazon’s policies prevent sellers from finding a cheaper, more-responsive middleman, and then passing on the savings to shoppers. Meanwhile, its minimum margin agreements may result in potentially millions of dollars in “true up” payments to Amazon from sellers.

BCLP concludes that businesses operating in online marketplaces should check their pricing and contracts to make sure they are compliant with federal and state antitrust laws. This antitrust lawsuit over pricing practices suggests that sellers don’t have to be gargantuan enterprises to be impacted by allegedly anti-competitive conduct.