Judge greenlights FTC’s antitrust suit against Amazon

A federal judge gave the Federal Trade Commission the green light to pursue antitrust claims against Amazon, a newly unsealed order reveals, though some claims under state laws won’t move forward.

Amazon filed a motion to dismiss the 2023 lawsuit, which alleges the company illegally maintains a monopoly by punishing sellers who discount products outside of Amazon and “effectively requires” them to use its own fulfillment services for coveted positioning on the site. Judge John Chun denied Amazon’s attempts to dismiss several federal claims that were based on the FTC Act and the Sherman Act. Chun did deny some claims that Amazon violated state law, the result of state-level attorneys general signing on to the suit. But he gave them a chance to try again on at least some of those claims.

“We are pleased with the court’s decision and look forward to moving this case forward,” FTC spokesperson Douglas Farrar said in a statement. “The ways Amazon illegally maintains its monopolies and the harm they cause — including suppressed competition and higher prices for shoppers and sellers — will be on full display at trial. This case ultimately seeks to pry loose Amazon’s monopolistic control and restore competition.”

Amazon spokesperson Tim Doyle pointed out in a statement that the “early stage” ruling “requires the court to assume all facts alleged in the complaint are true. They are not.” Doyle said the FTC suit does not accurately account for how consumers shop. “Moving forward the FTC will have to prove its claims in court, and we’re confident those claims will not hold up when the FTC has to prove them with evidence,” Doyle said. “The truth is that Amazon’s practices are good for competition, consumers, and the small- and medium-sized businesses that sell in our store, while the FTC’s approach would make shopping more difficult and costly.”

While this decision means that the FTC will get the chance to continue making its case in court, it doesn’t necessarily indicate how the judge will rule based on the evidence. For example, the judge writes that when viewing allegations that Amazon forces sellers to use its services “in the light most favorable” to the government, the claims are “plausibly” anticompetitive. But, Chun notes, any pro-competitive business justifications for its policies “are improper to consider at this stage” — they’ll become relevant at trial.

Like Google’s recent antitrust trials, Chun said the Amazon case would be bifurcated — meaning he’d only consider remedies if Amazon is found liable for the charges.