December 1, 2023
FTC’s Amazon antitrust lawsuit faces higher restrictions in US court – experts

By Mike Scarcella

(Reuters) – A U.S. Federal Trade Commission lawsuit accusing of abusing its retail market power to stifle competition is facing hurdles in court, citing the scope of U.S. antitrust law. testing and creating hurdles for the agency, legal experts said.

The US consumer agency, which enforces federal antitrust laws, and 17 states filed their lawsuit against Amazon in Seattle federal court on Tuesday, asking a US judge to consider an injunction and other penalties to deal with the alleged unlawful conduct. where did it go.

Several legal experts told Reuters the FTC faces a high hurdle in trying to show that US consumers would be better off in a world without Amazon’s policies.

The lawsuit says Amazon unfairly prioritizes its products and that the company’s policies penalize merchants who want to sell products at lower prices on other platforms.

Under US law, the FTC has the burden of proving that Amazon is not only a large market player with power, but has also taken illegal steps to gain or maintain its dominance. The agency must also define and certify relevant markets, which is a key issue.

Antitrust lawyer David Balto, the FTC’s former policy director, described the FTC’s uphill climb as trying to climb Washington state’s Mount Rainier in tennis shoes.

“You know, it’s doable — you can get to the top — but it’s 20,000 feet and it’s going to be really cold,” he said.

As part of the case, Amazon will have a chance to assert a pro-competitive justification for its alleged conduct, said antitrust attorney Dianne Hazell of the law firm Foley & Lardner. Hazell said that to counter the FTC’s claims, Amazon would have to show that its reasons are “legitimate.”

Tom Cotter, an antitrust scholar at the University of Minnesota Law School, said Amazon’s argument would be, “We provide consumers with instant access to a wide variety of goods at affordable prices.”

Indeed, David Zapolsky, Amazon’s general counsel, said in a statement that the challenging policies “have helped foster competition and innovation in the retail industry.” Zapolsky said the FTC’s complaint shows that “everyday retail competition does not exist.”

FTC Chairwoman Lina Khan said in a statement that Amazon used “punitive and coercive tactics” to unlawfully maintain its monopoly.

The FTC’s lawsuit relates to a series of private consumer cases filed against Amazon in recent years, but pending in the same US federal court.

The private antitrust cases provide an early window into some of the legal arguments Amazon will make to challenge the FTC’s lawsuit.

In one case, in a potential class action challenging the platform’s pricing policies, Amazon’s lawyers argued that no court “has ever condemned a business practice that requires consumers to charge less in retail stores.” Prices require it.”

Amazon is also fighting claims from another private civil lawsuit that the company stifled competition for shipping and fulfillment services.

U.S. District Judge Ricardo Martinez dismissed that suit in April, saying the consumer plaintiffs were not purchasers of logistics services. But the court gave consumers a chance to bring a new case.

Former US President George W. Martinez, a Bush appointee, may be assigned to prosecute the FTC because the agency said several of the Amazon cases pending before them were factually and legally related to the new complaint.

In general, U.S. judges “are wary of using antitrust law to punish price-gouging behavior,” said Sean Sullivan, an antitrust scholar at the University of Iowa Law School.

Sullivan said it’s not always a clear line between a “good low price” – based on market competition – and a “bad low price” that helps a company gain or maintain market power.

(Reporting by Mike Scarcella; Editing by Leigh Jones and Muralikumar Anantharaman)


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