A judge just tossed out a private antitrust suit against Amazon that mirrors allegations in the FTC's case against the company.
The order states that Plaintiffs failed to allege an antitrust injury or define a relevant antitrust market.
This suit, brought by consumers, targeted Amazon's "buy box" and attempted to argue that Amazon unlawfully tied its shipping service, FBA, to preferential placement of products in the Buy Box on Amazon’s online marketplace.
This is the second amended complaint in this case. The first complaint was also dimissed, though without prejudice. This time, the court dismissed with prejudice and accepted both of Amazon's reasons to dismiss:
1. Plaintiffs didn't suffer an antitrust injury b/c their alleged harm occurred in the online retail market, not the shipping market where they allege illegally restrained competition
2. The allegations insufficiently define a market for the Buy Box
The judge rejected the tying arrangement claims and held that consumers who choose to use Amazon's shipping services are not influenced by the relationship between Amazon's fullfillment services and the existence of the Buy Box.
The judge also found that the Plaintiffs conflated the online retail market with the shipping market.
The harms they allege do not constitute as antitrust injury b/c they deal w/Amazon pricing which falls in the retail market, but their tying claims address the shipping market.
Plaintiffs failed to establish proposed antitrust markets:
Single brand mkt: “product or service in the market for favorable product placement on Amazon’s website”
Multibrand mkt: “product or service in the market for favorable product placement... on the internet more broadly”
Amazon argued that the Plaintiffs fails to “describe a plausible tying product market” for the Buy Box.
Their single “implausible” because “single brand markets are only viable ‘in the context of aftermarkets."
Single brand markets are incredibly rare and you would be hard pressed to find an antitrust case that has recognized a single brand primary market.
The court agreed that Plaintiffs failed to overcome the high burden of establishing a single brand market because they couldn't show that the Buy Box is "'so unique or so dominant in the market in which they compete' that there are no economic substitutes available to consumers."
The Plaintiffs proposed multi brand market (favorable product placement in e-commerce) was also insufficiently pled b/c the court is unable to "assess whether the relevant market definition is facially unsustainable b/c the contours of the alleged market are undefined."
The suit was dismissed with prejudice, meaning that Plaintiffs cannot further amend their complaint.
The judge held that the suit "could not be saved" and "failed to see
how Plaintiffs injury in the shipping market."
The FTC stated that this consumer case, along with others, is related to its enforcement action against Amazon and targets the same fulfillment requirements.
Vidushi Dyall
@vidushi_law_1
@progresschamber Breaking down key developments in important tech cases you should be following. Tech policy, cybersecurity, competition. Fordham Law alum.