Consumer Class Action Takes on Amazon Over ‘Predatory Pricing Tactics’

By complaint filed in federal court in Seattle, Washington, a consumer has made known her intentions to sue Inc. for its allegedly anticompetitive conduct, described as the “abuse [of] consumers and merchants alike.” Wednesday’s filing reportedly targets the e-commerce platform for its role as a digital retailer of both its own goods and those offered by merchants who sell their products on Amazon.

The complaint alleges that consumers absorb Amazon’s “referral fees,” or commissions charged to third-party sellers by the platform. In a fair market absent the anticompetitive surcharge, merchants would charge lower, more competitive prices, the plaintiff avers.

The complaint notes that Amazon is also a horizontal competitor to the third-party merchants who sell on its platform. Because their goods are overpriced due to Amazon’s “referral fees,” the company is able to undercut merchants with Amazon-brand products thereby “vanquishing competition and eliminating consumer freedom to purchase the goods they seek in a normal functioning market free of anticompetitive conduct.”

In addition, the complaint points to Amazon’s pricing policy, which, in 2019, was the subject of regulatory and legislative scrutiny. Under the policy, third-party merchants are subject to a most favored nation (MFN) clause, now known as a “fair pricing policy,” prohibiting sellers from offering their goods on alternative digital e-commerce channels with terms and prices more favorable than those offered on Amazon’s. This, the filing alleges, “harms consumers by fixing, stabilizing, or increasing the price of those same merchants’ goods on all platforms including Amazon.”

As for the relevant market, the plaintiff asserted that Amazon holds a monopoly over domestic online retail platforms. In the alternative, the complaint states that Amazon has monopoly power in seven submarkets, including home improvement tools, golf, batteries, and kitchen and dining products.

The plaintiff is seeking to certify a class of consumers who purchased one or more products through Amazon’s platform since May 26, 2017. The complaint alleges a per se violation of Section 1 of the Sherman Act, and in the alternative, a regular violation thereof, and counts of attempted monopolization and monopolization in violation of Section 2.

The consumer and putative class seek monetary relief consisting of restitution and treble damages, as well as an injunction barring Amazon from continuing its allegedly anticompetitive conduct. The plaintiff is represented by Phillips Law Firm PLLC and Milberg Coleman Bryson Phillips Grossman PLLC.

Notably, the complaint is similar to one filed last year by other private plaintiffs, and one filed last month by Washington, D.C. Attorney General Karl Racine. The latter alleges that the e-commerce giant fixes online retail prices through its contractual agreements with third-party sellers, creating a price floor. By imposing those artificially high price minimums across the online retail marketplace, the company has built and maintains monopoly power in violation of the District of Columbia’s Antitrust Act, the complaint argues.