Biden Administration Sides Against Amazon In D.C. Antitrust Battle

The Biden Administration is siding against Amazon in an antitrust lawsuit brought by Washington, D.C. Attorney General Karl Racine, who alleged the tech company imposes anticompetitive restrictions on vendors that use the marketplace.

District of Columbia Superior Court Judge Hiram Puig-Lugo dismissed Racine's complaint in March.

Racine recently urged Puig-Lugo to reconsider that decision. On Wednesday, the Justice Department backed that request.

In an eight-page motion, the Justice Department said the federal government “has a strong interest in the sound analysis” in promoting competition.

“If left uncorrected, the court’s ruling could jeopardize the enforcement of antitrust law by improperly raising the bar on plaintiffs challenging anticompetitive contractual restraints in the District of Columbia,” the Justice Department wrote.

The dispute dates to May of 2021, when Racine alleged in an antitrust lawsuit that Amazon prevents third-party vendors on its platform from charging lower prices at other sites -- including the vendors' own retail platforms. He argued that the policy resulted in higher prices for consumers.

Amazon said that in 2019 it stopped prohibiting third-party vendors from charging lower prices elsewhere on the web. But Racine alleged that Amazon merely replaced that prohibition with a similar “fair pricing policy” clause.

Amazon countered that its policies were legal, and that the “fair pricing policy” merely prohibited vendors from charging unreasonable prices.

Puig-Lugo dismissed the complaint at a hearing. While he didn't issue a written opinion, Racine's office wrote in court papers that Puig-Lugo deemed the allegations too conclusory to warrant further proceedings.

Two weeks ago, Racine urged the judge to reinstate the claims, arguing that the judge “misapplied the law” and “ignored important factual allegations” in the complaint.

“This is not a case about companies' right to contract or whether it was a rational business decision for them to do so,” he wrote. “We know Amazon engaged in explicit written agreements, and it is eminently 'rational' for companies to price fix with their rivals. It is also illegal.”

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