11/19/24 | Court Denies Amazon’s Motion to Dismiss
In a sealed order on Nov. 19, 2024, U.S. District Judge John H. Chun denied Amazon’s motion to dismiss the De Coster et al. v. Amazon.com Inc. and Frame-Wilson et al. v. Amazon.com Inc. lawsuits. This denial allows plaintiffs to continue the fight against the world’s leading online retailer after three failed attempts by Amazon to dismiss the case.
Attorneys will now move forward with proposing redactions to the court by Dec. 2, 2024. Once the order has been unsealed, the document will be accessible here. Please check back for updates.
Did you purchase a product online from Amazon? You may have overpaid. Fill out the form to find out your consumer rights to potential compensation for Amazon's alleged pricing control »
An independent investigation by Hagens Berman's legal team and expert antitrust attorneys indicates that Amazon.com may have violated federal antitrust price-fixing laws, allegedly causing Amazon customers to pay artificially increased prices for products purchased via Amazon. Consumers have now filed a class-action lawsuit against Amazon alleging it has driven up prices on its website.
AMAZON'S ALLEGED PRESSURE ON RETAILERS
Amazon operates as a seller, and it opens its marketplace to third-party sellers, so that it can offer end customers an integrated retail site that lists its own retail goods alongside those listed by other merchants. For a fee, Amazon permits third parties to register with Amazon Marketplace to sell products on Amazon.com. This arrangement gives sellers access to millions of buyers and buyers access to millions of sellers via Amazon's controlled platform.
As a retailer, Amazon competes not only with major online or mobile app retail rivals like Costco, Wayfair or Home Depot, but also with its own hosted third-party sellers, who are contractually authorized to sell their wares on the Amazon.com platform.
But selling on Amazon comes with certain alleged restrictions. When a seller registers with Amazon Marketplace, it agrees to the terms of the Amazon Services Business Solutions Agreement (BSA) and the policies incorporated in that agreement, which establishes rules for setting prices on Amazon's platform, attorneys say.
FACTS & FIGURES
- Sales via Amazon account for almost half of all U.S. retail e-commerce.
- Amazon's nine largest competitors have only 1.1-6.6% share.
- Amazon sells approximately 12 million products at Amazon.com.
- 80% of Amazon’s third-party sellers also sell their products on other online retail websites that compete with the Amazon.com platform, most commonly on eBay, their own websites, or via Walmart.
- Almost half of Amazon’s third-party sellers, generate 81 to 100% of their revenues from sales on the Amazon.com platform, according to the filed lawsuit.
- Allegedly, Amazon has engaged and continues to engage in horizontal price fixing with its two million third-party sellers with respect to items offered for sale on other sites.
ABOUT AMAZON'S "FAIR PRICING" POLICY
Amazon's alleged restrictions on sellers using its platform include restrictions on the price of products offered for sale on the seller's channels, or its affiliates' channels, or physical stores. This means if a retailer lists an item for sale on Amazon's Marketplace for a certain price, they are allegedly barred from changing that price anywhere else, including on their own website, or in their own physical stores. According to the lawsuit, this gives Amazon an unprecedented control over pricing beyond its own platform. We believe this may violate antitrust laws and harm consumers by artificially setting prices.
Even though it is under investigation by the FTC, attorneys say Amazon may continue to enforce this policy under its “fair pricing” provision, which allegedly severely penalizes sellers who offer lower prices outside the Amazon.com platform. Amazon’s “fair pricing” policy states that “Amazon regularly monitors the prices of items on our marketplaces,” and that if it sees “pricing practices” on the Amazon.com platform “that harm[] customer trust, Amazon can remove the Buy Box [i.e., the coveted one-click-to-buy button], remove the offer, suspend the ship option" or suspend or terminate selling privileges.
One of the pricing practices Amazon identifies as “harmful” to customer trust is “[s]etting a price on a product or service that is significantly higher than recent prices offered on or off Amazon." Under the “fair pricing” provision, “[a]ny single product or multiple products packages must have a price that is equal to or lower than the price of the same item being sold by the seller on other sites or virtual marketplaces." Plaintiffs say this effectively gives Amazon control over a massive share of retail pricing, through alleged horizontal price-fixing in violation of federal antitrust laws, and also drives up pricing on its own website, according to the filed lawsuit.
YOUR CONSUMER RIGHTS
The lawsuit seeks reimbursement for alleged illegal price increases pushed onto consumers. Hagens Berman believes those who may have unknowingly paid high prices for online purchases deserve compensation.
Hagens Berman attorneys allege millions of consumers overpaid for online purchases on Amazon.com because Amazon prevents its third-party sellers from competing on price outside its platform. According to the lawsuit, even when it costs sellers less, (when the seller sells directly to consumers on its own website or at a lower fee on eBay) sellers are allegedly contractually barred or severely penalized from passing on these savings to their customers.
TOP CONSUMER RIGHTS FIRM
Hagens Berman is one of the most successful consumer litigation law firms in the U.S. and has achieved more than $320 billion in settlements for consumers in lawsuits against food corporations, automakers, big banks and others. Hagens Berman has achieved many record-breaking victories in antitrust matters, and your claim will be handled by attorneys experienced in consumer law.
NO COST TO YOU
In no case will any class member ever be asked to pay any out-of-pocket sum. In the event Hagens Berman or any other firm obtains a settlement that provides benefits to class members, the court will decide a reasonable fee to be awarded to the class's legal team.
CASE TIMELINE
In a sealed order on Nov. 19, 2024, U.S. District Judge John H. Chun denied Amazon’s motion to dismiss the De Coster et al. v. Amazon.com Inc. and Frame-Wilson et al. v. Amazon.com Inc. lawsuits. This denial allows plaintiffs to continue the fight against the world’s leading online retailer after three failed attempts by Amazon to dismiss the case.
Attorneys will now move forward with proposing redactions to the court by Dec. 2, 2024. Once the order has been unsealed, the document will be accessible here. Please check back for updates.
District Court Judge Ricardo S. Martinez sided with plaintiffs and ordered Amazon to produce more than a decade of sales data from Germany and the U.K., including historical transactions, sales revenues, shipping charges, commissions and more. The judge’s order dismisses Amazon’s objection that the request was unduly burdensome and not proportionate to the needs of the case. “The production of the requested information will doubtlessly take a significant effort and cost a substantial amount of time and money. But this is a significant, substantial case,” Judge Martinez said.
While the class definition in this case encompasses only U.S. Amazon customers, Judge Martinez wrote that plaintiffs make a “credible and meritorious argument” that UK and German sales data is highly relevant to resolving issues in the case.
U.S. District Court Judge Ricardo S. Martinez allowed the antitrust lawsuit against Amazon.com to proceed, denying the online retail giant’s motion to dismiss monopoly claims and claims that its anticompetitive price agreements with third-party sellers caused consumers to pay supracompetitive prices. In his order, Judge Martinez calls some of Amazon’s arguments in the motion “premature,” stating, “That is not how civil litigation is supposed to proceed and will not serve as a basis for dismissal.” The decision found that the class of Amazon customers represented by Hagens Berman in the case “allege a valid injury,” and that the claims in the lawsuit, while complex, are strong enough to plausibly allege antitrust injury.
California attorney general, Rob Bonta, has filed a similar case against Amazon, repeating claims brought by Hagens Berman in its most recent antitrust cases against Amazon. In the state AG’s Sept. 14, 2022 filing, Bonta highlights Amazon’s agreements that thwart competition by agreement with its third-party sellers and by agreement with its suppliers. Since March of 2020, Hagens Berman has trailblazed antitrust cases against Amazon related to consumer price-fixing and monopoly claims: De Coster v. Amazon.com, Inc.; Brown v. Amazon.com, Inc; and Frame-Wilson v. Amazon.com, Inc.
Steve Berman, managing partner of Hagens Berman and attorney for consumers in the four class actions related to the AG’s case, said of the new filing, “We are pleased to see California’s attorney general has joined the fight we started in 2020 over Amazon’s unlawful tactics that have greatly harmed consumers. The proposed class actions we filed paved the way for additional antitrust actions against Amazon, and we believe consumers will reap the rewards of this collective action.”
A federal judge appointed Hagens Berman interim co-lead counsel, stating in the order that “The Court concludes that such appointments will aid in achieving efficiency and economy in what is likely to be an expensive and complicated litigation, and that such appointments will enhance fairness to all parties concerned, as well as the proposed classes.”
Washington, D.C. attorney general, Karl Racine, today filed a similar case against Amazon, repeating claims brought by Hagens Berman in 2020.
Steve Berman, managing partner of Hagens Berman and attorney for consumers in the class action said of the new filing, “We are pleased to see D.C.’s attorney general has joined the fight we started in April 2020 over Amazon’s unlawful tactics that have greatly harmed consumers. The proposed class action we filed in 2020 has paved the way for additional antitrust actions against Amazon, and we believe consumers will see the benefit of that.”
