Amazon Wins Dismissal of D.C. Antitrust Lawsuit Over Pricing

WASHINGTON— Amazon

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com Inc. won Friday the dismissal of an antitrust suit brought against the company by the District of Columbia, which alleged the company harmed consumers by blocking sellers in its marketplace from offering better deals elsewhere.

The lawsuit was dropped by DC Superior Court Judge Hiram Puig-Lugo, according to a document submission, based on Amazon’s motion to dismiss. The motion was opposed by DC Attorney General Karl Racine, whose office said it was considering an appeal.

“We believe that the Supreme Court was wrong about this and that its oral ruling did not appear to take into account the detailed allegations contained in the complaint, the full scope of the anti-competitive agreements, the extensive briefing and a recent decision by a federal court to proceed with an almost identical lawsuit,” a spokeswoman for the DC Attorney General said Friday.

“We are considering our legal options and will continue to fight to develop reasoned antitrust case law in our local courts and hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor,” the spokeswoman said.

Amazon argued in its motion to dismiss the DC lawsuit that price restrictions in its contracts with sellers are common in retail and completely legal.

The company also argued that the lawsuit would harm consumers if it were successful.

“One of Amazon’s primary business goals in serving its customers is to have a reputation for low prices, and Amazon is constantly working to maintain that reputation by offering discounted products in its store.” said Amazon in its motion to reject it filed in October. “If the district’s case goes through, it would undermine this pro-consumer approach.”

The DC Attorney General’s office argued that it was Amazon that pushed prices up.

The case was brought under District of Columbia law rather than federal law, and its immediate impact would have been limited even had it succeeded.

Still, the case marked an early effort to challenge Amazon’s practices as anticompetitive at a time when other major tech companies like Facebook parent Meta Platforms Inc. and Alphabet Inc.’s

Google unit has been repeatedly sued by federal and state authorities. Both companies have denied any anti-competitive behavior.

Amazon “has made online shopping more expensive for consumers through its anti-competitive agreements that prevent merchants from offering lower prices on and to competing online marketplaces,” the district said in its response. “These agreements restrict competition, resulting in higher prices, less innovation and less choice for consumers.”

Until 2019, Amazon explicitly banned U.S. sellers from offering their products online at a lower price or better terms, the lawsuit said. Amazon removed that policy but replaced it with a new “Fair Pricing Policy” that was an “effectively identical replacement,” the lawsuit said.

The Fair Pricing Policy allows sellers to set their own prices, according to Amazon. The company also keeps an eye on prices elsewhere on the internet. If a seller offers a product on Amazon for a higher price than stated elsewhere, Amazon may not offer that seller’s offer.

The e-commerce giant has said the policy is designed to protect consumers from overcharges and to provide sellers with information so that their offers can be displayed. The company says it decides which offers to show based on price, delivery speed, and other factors.

Mr. Racine, the DC Attorney General, has said the policy ultimately hurts consumers because it encourages sellers not to offer lower prices on other websites, even if the sellers would like to.

write to John D. McKinnon at john.mckinnon@wsj.com

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Appeared in the March 19, 2022 print edition as “Pricing Suit Against Amazon Dismissed.”

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