A pension fund sued
The lawsuit, filed in Delaware Chancery Court, targets Amazon’s “most favored nation” agreements, which allegedly bar third-party sellers from offering lower prices elsewhere, despite “hefty fees” that make the platform one of the more expensive places to sell goods online.
The suit also accuses Amazon of bullying local governments into tax breaks, and pitting them against one another in search of the best deal, in an effort to widen its profit margins so it can afford to offer predatory prices.
“Amazon has eroded local and state tax revenue bases by engaging in tax avoidance, refusing to collect sales tax in 16 states, costing these states over $700 million,” the complaint says. “At the same time, Amazon went forum-shopping to see which state would offer the greatest tax incentives.”
An Amazon spokesperson said Thursday that the company didn’t yet have a comment on the new suit, but he referred to the company’s statement in response to the Washington enforcement action.
The allegations get “it exactly backwards,” that statement said. “Sellers set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively.”
If the suits prevail, they “would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law,” the company added.
In addition to echoing the Washington, D.C., case, the allegations in the Delaware suit also resemble claims from a proposed class action consolidated last month in a federal court in Manhattan over Amazon’s dominance in the eBook market.
All of the antitrust suits claim Amazon reinstituted the MFN provisions—now called “price parity provisions” or a “fair pricing policy"—after promising the Federal Trade Commission in 2019 that it would drop them.
Amazon has defended the agreements in past court filings as pro-consumer.
The new suit seeks company records under a state law giving corporate shareholders broad inspections rights if they credibly suspect wrongdoing at the top. It was filed by the Oklahoma Firefighters Pension and Retirement System.
Cause of Action: Section 220 of the Delaware General Corporation Law.
Relief: Disclosure of relevant company records; costs and fees.
Attorneys: The pension fund is represented by Cooch & Taylor PA and Scott & Scott Attorneys at Law LLP.
The case is Okla. Firefighters Pension & Ret. Sys. v. Amazon.com Inc., Del. Ch., No. 2021-0484, complaint filed 6/3/21.