Amazon Must Face Online Retailer’s Lawsuit Alleging Monopoly

Amazon.com Inc. must face an antitrust lawsuit by a competing online retail platform that alleges the e-commerce giant maintains an illegal monopoly and uses that power to stifle competition.

Zulily LLC, an online apparel retailer that describes itself as an Amazon victim, has offered enough evidence that it competes with Amazon in the online superstore market to pursue its antitrust claims, according to a Dec. 31 decision from Judge John Chun of the US District Court for the Western District of Washington.

Zulily also sufficiently alleged that Amazon’s “anti-discounting” practices, such as punishing third-party sellers that offer lower prices on Zulily’s platform, is anticompetitive under federal antitrust law, Chun wrote.

Any “pro-competitive justifications” Amazon has are a factual question that can be resolved during a trial, Chun said.

The ruling comes as Amazon faces similar legal pressure from the Federal Trade Commission. Chun, also overseeing the FTC case, in October denied Amazon’s motion to dismiss the federal antitrust claims the government is pursuing. That case, which alleges Amazon degrades quality for shoppers and overcharge sellers, is set to go to trial in 2026.

Amazon declined to comment on Thursday about the ruling in the Zulily lawsuit.

Zulily, which brought its lawsuit just months after the FTC did, alleges that Amazon’s practice of restricting merchants from offering lowering prices on other platforms caused it to lose profits, consumer sales, and web traffic.

The Seattle-based company held a final closeout sale in December 2023. The retail site, however, relaunched in September 2024 after Beyond Inc. purchased the intellectual property and brand assets, according to Seattle Business Magazine.

While Chun allowed Zulily’s lawsuit to proceed, he granted Amazon’s motion to dismiss claims alleging its practices represent an illegal conspiracy with retailers and wholesalers. He also dismissed a deceptive practices claim under Washington state law.

Counsel for Zulily didn’t immediately return a request for comment on whether they plan to revise the dismissed claims.

Zullily is represented by Bona Law PC and Carney Bradley Spellman PS. Amazon is represented by Williams & Connolly and Morgan Lewis & Bockius LLP.

The case is Zulily LLC v. Amazon.com Inc., W.D. Wash., 2:23-cv-01900-JHC, 12/31/24.