Amazon Urges Judge To Throw Out FTC's Antitrust Charges

Amazon is urging a federal judge to throw out Federal Trade Commission charges that the company illegally hindered competition in the "online superstore" market, to the detriment of third-party sellers that use the platform as well as consumers.

In a motion filed Friday with U.S. District Court Judge John Chun in Seattle, Amazon argues that FTC's allegations concern “common retail practices that presumptively benefit consumers.”

“The complaint labels these practices 'anticompetitive,' but the facts alleged rebut that epithet,” the company argues.

The FTC (along with 17 states) alleged in a complaint filed in September that Amazon wrongly prevents marketplace sellers from discounting their products on other sites, and requires sellers to use Amazon's fulfillment system in order to participate in Amazon Prime, which offers expedited shipping. 

That "interconnected strategy" aims to “block off every major avenue of competition -- including price, product selection, quality, and innovation -- in the relevant markets for online superstores and online marketplace services,” the complaint alleged. Online superstores are described in the complaint as stores offering "a single destination for shoppers to browse a large and diverse selection of goods from multiple brands across a wide range of categories.”

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Amazon essentially counters in its new motion that the allegations, even if proven true, wouldn't support a conclusion that the company violated antitrust laws.

“The complaint does not identify a single product or product category for which prices have risen as a result of the challenged conduct,” Amazon argues. “Instead, it implausibly, and illogically, assumes that Amazon’s efforts to keep featured prices low on Amazon somehow raised consumer prices across the whole economy.”

Amazon adds that while the complaint included “vague allegations” that some sellers raised their prices on other sites, those anecdotes don't in themselves give the agency grounds to proceed in court.

Instead, the retail giant contends, “antitrust law conclusively presumes that Amazon’s strategy of matching discounts offered by other retailers is procompetitive and lawful.”

The company also says allegations that it requires Prime sellers to use Amazon's fulfillment don't support antitrust charges, arguing that complaint doesn't “identify a single supposedly 'foreclosed' rival.”

“It defies common sense to suggest that Amazon’s use of the Prime badge could have marginalized retail heavyweights like Walmart and Target or delivery incumbents like UPS, FedEx, and the U.S. Postal Service -- some of which Amazon uses to deliver orders today -- let alone any other entity,” the company argues.

The claim that Amazon attempts to prevent retailers from offering discounts on other platforms has surfaced in other antitrust cases against the company -- including ones by attorneys general in California and Washington, D.C.  A trial judge dismissed the lawsuit brought in Washington, D.C., but the attorney general is appealing that decision.

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