• by Wendy Davis  @wendyndavis, August 23, 2024

An appellate court has revived the Washington, D.C. attorney general's claims that Amazon's restrictions on its marketplace vendors stifled competition and resulted in higher prices for consumers.

The ruling, issued by three-judge panel of the District of Columbia Court of Appeals, reversed District of Columbia Superior Court Judge Hiram Puig-Lugo's order dismissing the case.

The decision comes in a legal battle dating to 2021, when former District of Columbia Attorney General Karl Racine alleged that Amazon unlawfully restricts competition by preventing third-party vendors on its platform from charging lower prices at other sites -- including the vendors' own retail platforms. He argued that the policy led to higher prices for consumers.

Amazon said that in 2019 it discontinued its “price parity” policy, which prohibited 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” mandate.

Puig-Lugo dismissed the case in 2022 for several reasons, including that he believed the complaint against Amazon lacked specificity.

“The District simply repeated vague conclusion after vague conclusion devoid of facts to support the vague conclusions it repeatedly stated,” Puig-Lugo wrote.

Washington, D.C. Attorney General Brian Schwalb appealed that ruling, arguing that Amazon's terms, combined with its fees, lead to higher prices for consumers.

“Because Amazon has much higher fees than other marketplaces, sellers could profitably charge a lower price on competing websites were it not for Amazon’s [restrictions],” Schwalb argued.

The appellate panel sided against Amazon, writing that the allegations, if proven true, could prove that the company ran afoul of antitrust law. 

Amazon says it disagrees with the District of Columbia's allegations and plans to “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,” the spokesperson stated.

The Federal Trade Commission last year filed a similar antitrust lawsuit against Amazon, which is pending in front of U.S. District Court Judge John Chun in Seattle. On Friday, the FTC called Chun's attention to the District of Columbia appellate decision.