Amazon Marketplace facing revived antitrust suit after appeals court reversal

A lawsuit against Amazon by Washington D.C. has been revived after an appeals court in the nation’s capitol reversed an early decision to toss the suit, which claims that Amazon hurts competition with its Marketpalce.

The ruling comes more than two years after the case had been dismissed in superior court. The lawsuit was initially filed in 2021. 

Amazon spokesperson Tim Doyle told Tom’s Guide that the company disagrees with court’s ruling and they look forward to “presenting facts in court that demonstrate how good these policies are for consumers.”

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

Current D.C. Attorney General Brian Schwalb celebrated the court’s ruling in a statement to Reuters.

“We will continue fighting to stop Amazon’s unfair and unlawful practices that have raised prices for District consumers and stifled innovation and choice across online retail,” Schwalb said.

The original antitrust suit against Amazon claimed that the consumer giant stifles competition in its Marketplace, the section of Amazon that allows third-party companies and individuals to sell products on the platform.

The lawsuit alleges that Amazon makes unreasonable demands of third-party-sellers. This includes restricting sellers from offering their products at lower prices on non-Amazon marketplaces. It alleges that Amazon basically bans third-party sellers from offering the same goods elsewhere by refusing to highlight listings if they do so.

Then D.C. Attorney General Karl Racine claimed in the original court filing that these demands result in a loss of competition and innovation.

The filing stated: “Amazon’s online retail sales platform benefits from, and is protected by, Amazon’s anticompetitive business practices. Far from enabling consumers to obtain the best products at the lowest prices, Amazon instead causes prices across the entire online retail sales market to be artificially inflated, both for products sold on Amazon’s online retail sales platform and on its competitors’ online retail sales platforms.”

Racine was seeking structural remedies, which would force Amazon to change its third-party seller rules, potentially ending pricing restrictions.

The D.C. appeals court said that the Superior Court judge in 2023 set the bar too high in dismissing the original suit and that the attorney general had a plausible claim.

Other Amazon lawsuits ongoing

This isn’t even the only lawsuit Amazon is facing over its Marketplace. The Federal Trade Commission and a dozen states are pursuing a separate antitrust lawsuit, claiming Amazon is a monopolist that stifles competition with anticompetitive practices. Amazon is currently seeking to have that case dismissed as well. Pending the outcome of this case and the lack of dismissal here, it’s possible that case may forward as well.

Amazon recently lost a lawsuit that found the retailer responsible for the sale of hazardous third-party products and was forced to recall more than 400,000 items.

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