Amazon loses effort to dodge federal antitrust charges

SEATTLE (CN) — Online shopping behemoth Amazon will have to face antitrust claims after a federal judge in Seattle on Tuesday denied the company’s bid to dismiss charges brought by the Federal Trade Commission.

In its latest attempt to skirt claims of violating federal and state antitrust laws, Amazon argued the FTC doesn’t have the statutory authority to pursue a permanent injunction in federal court without a pending administrative proceeding, but U.S. District Judge John Chun was not persuaded by the company’s reasoning.

Specifically, Amazon argued a Supreme Court holding on the interpretation of provisions within the FTC Act is at odds with a Ninth Circuit decision regarding the act.

Under section 13B the FTC Act, the commission is permitted to sue directly in federal court without first going through its internal agency process. In FTC v. H. N. Singer Inc. , the Ninth Circuit determined the provision allowing the FTC to sue without a pending internal proceeding also permits the commission to seek a permanent injunction and gives a federal judge the authority to grant one, even if there have not been internal administrative proceedings.

But, the digital retail giant argued that the 1982 Ninth Circuit holding isn’t binding because it conflicts with the Supreme Court’s holding in AMG Cap. Mgmt. LLC v. FTC, a 2021 case in which the Supreme Court was tasked with determining whether the words “permanent injunction” within the provision of the FTC Act granted the commission the authority to obtain monetary relief from courts. The answer the high court landed on was no: the section in question, when taken as a whole, focuses on injunctive relief rather than monetary relief.

This conclusion led Amazon to interpret that the subparts of the provision must be taken as preconditions before the FTC can pursue injunctive relief. However, Chun disagreed with the company’s interpretation.

“But the Supreme Court’s holding that Section 13(b) does not allow courts to award monetary relief does not imply that subparts 13(b)(1) and (b)(2) are preconditions that apply every time the FTC seeks an injunction,” the Joe Biden appointee wrote in a five-page order. “The Supreme Court expressly left open that interpretative question.”

In its opinion in AMG Cap. Mgmt, the Supreme Court directly addressed the appearance of the words “permanent injunction” and clarified they could be read " as granting authority for the commission to go one step beyond the provisional and (‘in proper cases’) dispense with administrative proceedings to seek what the words literally say (namely, an injunction)" in addition to directly relating to previously issued preliminary injunction.

“The Supreme Court did not adopt a specific interpretation of Section 13(b)(2)’s second proviso, much less one that is clearly irreconcilable with that in Singer ,” Chun concluded.

Chun dismissed Amazon’s motion for judgment on the pleadings with prejudice and further denied its request for certification of the order for interlocutory appeal.

The FTC and the attorneys general of 17 states sued Amazon in September 2023, accusing the online retailer of raising prices and creating monopolies by, in part, altering organic search results to show paid advertisements or Amazon’s own products and overcharging online sellers. Vermont and Puerto Rico later joined the lawsuit.

It’s not Amazon’s first attempt to duck the antitrust case. In October, Chun largely denied the company’s motion to dismiss, dropping only a select few state claims from the suit. The judge dismissed claims brought under New Jersey, Pennsylvania, Oklahoma and Maryland’s consumer protection and antitrust laws, but allowed all others to proceed.

According to the FTC and the states, Amazon has suppressed competition and raised prices for shoppers and sellers to maintain a monopoly.