Amazon Wins Consumer Antitrust Case Over Fulfillment Centers

By Mike Scarcella

(Reuters) – Amazon.com Inc. on Thursday dismissed a private lawsuit in a Seattle federal court that accused the national retailer of fraud by trying to limit competition in its shipping and fulfillment services, causing consumers to pay more for purchases, in violation of U.S. antitrust law.

District Judge Ricardo Martinez said in his ruling that the consumer plaintiffs had failed to show why they should be able to sue because of the company’s logistical practices — the manner and timing of delivery of the purchased item to the buyer’s residence.

A potential class action lawsuit filed in 2021 by two members of Amazon Prime’s annual paid subscription service alleged that Amazon unlawfully “tied” online sales of third-party products to use of the company’s “Fulfillment by Amazon” program.

The lawsuit claims that Amazon’s alleged anticompetitive fulfillment practices have harmed “hundreds of millions of its loyal customers.” The plaintiffs sought unspecified monetary damages and an “injunction enjoining Amazon from continuing its unlawful conduct.”

An Amazon spokesman declined to comment.

Attorneys representing the plaintiffs did not immediately respond to a request for comment.

Amazon’s attorneys argued that the fulfillment services are not sold to consumers who buy products, but to third-party companies that sell goods on the company’s platform. In a court filing, Amazon said the plaintiffs’ complaint “suffers from myriad fatal legal flaws.”

The judge’s ruling found that the plaintiffs were not purchasers of the logistics services, the “allegedly monopolized product” at issue in the lawsuit, and that the plaintiffs were “at best indirect purchasers who are barred from bringing antitrust claims.” The injunction gave the plaintiffs a chance to file an amended complaint.

The antitrust case against Amazon was one of a series of private and state actions alleging competition law violations. Amazon has denied claims in those other cases, including that the company’s policies illegally prevent sellers from offering better prices elsewhere.

The case is Angela Hogan et al. v. Amazon.com Inc, U.S. District Court, Western District of Washington, No. 2:21-cv-996-RSM.

For Hogan: Beth Terrell of Terrell Marshall Law Group; Kenneth Wexler of Wexler Boley & Elgersma; Daniel Gustafson of Gustafson Gluek; and Brett Cebulash of Taus, Cebulash & Landau

For Amazon: Stephen Rummage of Davis Wright Tremaine and John Schmidtlein of Williams & Connolly