Amazon defended the business practices targeted by the Federal Trade Commission as “the essence of competition” and asked a federal judge to dismiss the case in its first legal response to the landmark antitrust lawsuit.
“Amazon competes every minute of every day with thousands of online and brick-and mortar retailers,” the company said in its filing — asserting a broad definition of the relevant market in an attempt to undermine the FTC’s fundamental claim that Amazon is improperly leveraging its dominance of the narrower “online superstore market.”
The company’s motion, filed Friday in U.S. District Court in Seattle, said 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.”
These practices, Amazon said, “benefit consumers and are the essence of competition.”
Amazon’s assertions get to the heart of the disconnect highlighted by Lina Khan, now the FTC chair, in a 2017 Yale Law Journal article called “Amazon’s Antitrust Paradox,” which foreshadowed the agency’s case.
Khan wrote at the time that traditional frameworks for antitrust law, which assessed competition based on consumer welfare and short-term price effects, were “unequipped to capture the architecture of market power in the modern economy,” and insufficient to assess “the potential harms to competition posed by Amazon’s dominance.”
Amazon is seeking to dismiss the case on multiple grounds.
- Procompetitive conduct: Amazon argues that its practices are procompetitive and benefit consumers, such as matching other retailers’ discounts and ensuring competitive prices in its marketplace.
- No anticompetitive effects: The company contends that the complaint lacks plausible allegations of anticompetitive effects, such as increased prices or reduced output.
- FTC Act claims: Amazon challenges the FTC’s authority to bring standalone Section 5 claims in district court without first determining “unfairness” in its administrative court.
- State law claims: Amazon asserts that state law claims should be dismissed for various reasons, including the failure of the Sherman Act claims and the lack of equivalent state laws for certain claims.
In its motion to dismiss the case, Amazon also disputed the FTC’s allegations that it has unfairly imposed excessive fees fees on sellers.
“A seller’s voluntary participation in FBA … allows sellers to ship goods quickly and reliably without paying the higher fees [they] would otherwise have to pay the shipping incumbents,” it says. “Participation in FBA also assures that the seller meets Amazon’s high standards for delivery speed and reliability, although sellers are free to demonstrate their commitment to those standards through other means.”
Addressing its “Project Nessie” pricing strategy, one of the initiatives targeted by the FTC suit, Amazon said it was an experimental pricing strategy that matched the second-lowest price offered by competitors for certain products. It ran from 2015 to 2019 and was discontinued, Amazon said, asking the court to dismiss the related claims as untimely.
