Report from Law.com
In Brief – A California judge has denied the state attorney general’s request for a preliminary injunction against Amazon blocking some of its pricing practices related to its wholesale vendors. San Francisco Superior Court Judge Ethan Schulman said that the state failed to show that immediate relief was necessary to prevent impending harm from an alleged retail price-fixing scheme and questioned the strength of the state’s evidence backing its preliminary injunction request. The state AG’s price fixing complaint, brought in 2022 and scheduled for trial in January, challenges Amazon practices allegedly intended to press sellers on its third-party marketplace and also its wholesale vendors to keep prices offered off Amazon no lower than those on Amazon. The motion requesting a preliminary injunction focused only Amazon’s wholesale suppliers for its first-party retail sales, not its massive third-party marketplace. Schulman said the motion raised legal and factual issues central to the case and warned that resolving them before trial could risk a retrial if an appeals court disagreed.
Context – The California AG lawsuit targets Amazon pricing policies described as “price parity” or “price fixing” that have been in the crosshairs of competition regulators for years. Amazon argues that they simply push third-party sellers to lower their prices on Amazon, which benefits its shoppers. Critics respond that Amazon penalizes third-party sellers who want to sell their goods for lower prices on other platforms that charge lower seller fees to reduce low price competition to sales on Amazon. Price parity tactics are especially problematic because Amazon fees often reach 50% and it is the dominant online marketplace in many major markets. Sellers that could offer lower prices to shoppers on low-fee platforms often won’t do so because Amazon’s Buy Box penalties will cost them significant sales. Amazon’s pricing practices are the subject of class action lawsuits in US federal court and in the UK, are part of a US FTC antitrust complaint, a federal antitrust lawsuit by defunct low-fee online marketplace Zulily, and a recent antitrust order and €59 million fine from Germany’s competition authority.