Amazon Targeted With Consumer Antitrust Claims Echoing D.C. Suit

May 27, 2021, 4:18 PM

Amazon was hit with federal antitrust claims in Seattle by consumers challenging its pricing policies for merchants, just hours after the Washington, D.C., attorney general became the first government enforcer to bring a serious antitrust case against the retail giant.

A pair of frequent Amazon shoppers, backed by major plaintiffs’ firms, filed proposed class actions late Wednesday in the U.S. District Court for the Western District of Washington, claiming Amazon is unlawfully enforcing “most favored nation” price policies against third-party sellers on its platform.

The provisions allegedly bar merchants who make up “the heart” of Amazon’s business from offering lower prices elsewhere. Because Amazon’s “hefty fees” make it one of the more expensive places to sell goods online, the MFN clauses drive up prices across the internet, according to the complaints.

The company’s MFN system “cements its stranglehold over sellers, because it prevents competing platforms from gaining scale by offering lower commissions to sellers and lower prices to consumers,” one of the lawsuits says.

Amazon didn’t immediately respond to a request for comment Thursday.

The allegations echo the claims made by the Washington, D.C., attorney general, whose suit against Amazon filed earlier Wednesday was the sixth antitrust case brought by a government enforcer against a major tech platform in the past year.

It followed suits by the Justice Department, the Federal Trade Commission, and nearly every state targeting Facebook Inc. and Google parent Alphabet Inc. over their dominance of social media, online search, and related digital advertising markets.

The antitrust allegations come more than a year after similar claims were first made in an ongoing consumer case. Other state attorneys general are also reportedly weighing additional antitrust cases against Amazon.

The trio of suits also arrived the same day Amazon announced its plan to acquire the Metro-Goldwyn-Mayer film studio in an $8.45 billion deal that’s already igniting additional concerns about its size and sprawl.

Like the ongoing consumer case, the new complaints accuse of Amazon of reinstituting the MFN agreements—now styled as “price parity provisions” or a “fair pricing policy"—after promising the Federal Trade Commission in 2019 that it would drop them.

Amazon “pretended to withdraw” the MFN policy, according to one of the suits. The move “was merely sleight of hand,” the other says.

The company is facing litigation making similar claims about its dominance in the eBook market. Those suits, which also name top publishing houses as defendants, were consolidated Wednesday in a federal court in Manhattan.

Cause of Action: Sections 1 and 2 of the Sherman Act.

Relief: Treble damages, an injunction, costs, fees, and interest.

Attorneys: The plaintiffs are represented by Quinn Emanuel Urquhart & Sullivan LLP, Hagens Berman Sobol Shapiro LLP, Keller Rohrback LLP, and Keller Lenkner LLC. Hagens Berman and Keller Rohrback also represent the consumer who filed suit last year.

The cases are De Coster v. Amazon.com Inc., W.D. Wash., No. 21-cv-693, complaint filed 5/26/21 and West v. Amazon.com Inc., W.D. Wash., No. 21-cv-694, complaint filed 5/26/21.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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