Calling the case wrong on the facts and the law, lawyers for Amazon late last week urged a federal court to dismiss the Federal Trade Commission’s sweeping antitrust lawsuit accusing the e-tailer of maintaining an illegal monopoly.
“Amazon has relentlessly innovated, delivering previously unimagined benefits for consumers and pushing competitors to do likewise, all to make every penny of a consumer’s purchase count for more,” the Amazon filing states. “Those practices—the targets of this antitrust Complaint—benefit consumers and are the essence of competition. Because ‘[a]ntitrust law does not seek to punish economic behavior that benefits consumers,’ the Complaint should be dismissed.”
The filing comes in response to the FTC’s blockbuster 172-page September lawsuit, supported by 17 state attorneys general, alleging that the e-tailer illegally maintains monopoly power through “a set of interlocking anticompetitive and unfair strategies” which function to “stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.” The suit seeks a permanent injunction that would prohibit Amazon from engaging in what the government called its "unlawful conduct," and would "pry loose Amazon’s monopolistic control to restore competition.”
In a September blog post addressed to its partners, Amazon denied the charges, and in its 31-page motion to dismiss, filed on December 8, Amazon lawyers insist that the evidence will show that Amazon’s practices in fact work to keep prices low for consumers and are thus lawful.
“The conduct challenged in the Complaint consists of common retail practices that presumptively benefit consumers. The Complaint labels these practices ‘anticompetitive,’ but the facts alleged rebut that epithet,” Amazon’s brief states. “Consider the Complaint’s allegation that Amazon ‘rapidly’ matches competitors’ price cuts. Matching rivals’ discounts is not, in Plaintiffs’ jargon, an ‘anti-discounting tactic’; it is discounting, and the antitrust laws affirmatively encourage it.”
The filing goes on to accuse the FTC of ignoring “the facially procompetitive” effects of Amazon’s conduct. “Indeed, the Complaint does not identify a single product or product category for which prices have risen as a result of the challenged conduct. Instead, it implausibly, and illogically, assumes that Amazon’s efforts to keep featured prices low on Amazon somehow raised consumer prices across the whole economy,” Amazon lawyers note. “At most, the Complaint contains vague allegations that a handful of sellers have responded, not by lowering their prices in Amazon’s store, but by raising them elsewhere. But anecdotes are insufficient to plead a claim under antitrust law’s rule of reason.”
As PW reported in September, the publishing industry's immediate industry reaction to the news of the FTC's suit against Amazon was uniform: “What took so long?” American Booksellers Association CEO Allison Hill called the suit “good news for indie bookstores and good news for all small business.” Independent booksellers were among the first physical retailers impacted by the steep discounting on books Amazon employed to attract customers.
“ABA applauds the FTC and states’ effort to release Amazon’s stranglehold, and we look forward to the transparency this lawsuit will provide into Amazon's business practices,” Hill added at the time.
In November, the FTC filed an amended complaint, which revealed a host of new information about Amazon's market position that was redacted in the initial filing.
