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Amazon Must Face Antitrust Case Over Alleged Monopoly Practices

By  |  January 2, 2025

Amazon.com  is set to face an antitrust lawsuit filed by competing online retailer Zulily LLC, which alleges the tech giant has maintained an unlawful monopoly in the e-commerce sector, stifling competition. The decision to allow the case to proceed was issued on December 31 by Judge John Chun of the U.S. District Court for the Western District of Washington, according to Bloomberg.

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    Zulily, a Seattle-based online apparel retailer, claims to have suffered significant losses due to Amazon’s alleged anti-competitive behavior. According to Bloomberg, Zulily’s lawsuit focuses on Amazon’s “anti-discounting” practices, which reportedly penalize third-party sellers who offer lower prices on competing platforms. Judge Chun concluded that Zulily provided sufficient evidence to demonstrate competition with Amazon in the online superstore market and to move forward with its antitrust claims.

    Amazon’s Practices Under Scrutiny

    The court’s ruling underscores ongoing legal challenges Amazon faces regarding its market dominance. Per Bloomberg, Judge Chun noted that any “pro-competitive justifications” Amazon may present are matters to be addressed during trial. The lawsuit alleges that Amazon’s pricing policies have hindered Zulily’s ability to attract customers, resulting in lost profits and diminished web traffic.

    Zulily’s case builds on claims that Amazon’s policies unfairly prevent other platforms from offering better deals to consumers. The lawsuit arrives in the wake of broader antitrust pressure on Amazon, including a high-profile case filed by the Federal Trade Commission (FTC). Judge Chun is also overseeing the FTC’s lawsuit, which accuses Amazon of degrading consumer experiences and overcharging sellers. The FTC case is scheduled for trial in 2026.

    Read more: Supreme Court Urged to Resolve Legal Standoff Over Amazon and Flipkart Investigation

    Limited Success for Zulily’s Claims

    While Judge Chun allowed the core antitrust claims to move forward, he dismissed some of Zulily’s allegations. According to Bloomberg, Amazon successfully argued for the dismissal of claims that its practices constituted an illegal conspiracy with retailers and wholesalers, as well as a deceptive practices claim under Washington state law.

    Zulily initially filed its lawsuit shortly after the FTC’s case against Amazon. The company alleges that Amazon’s dominance forced it into a financial downturn, culminating in a closeout sale in December 2023. However, Zulily has since been revitalized. The retailer relaunched in September 2024 after its intellectual property and brand assets were acquired by Beyond Inc., as reported by Seattle Business Magazine.

    Amazon Declines Comment

    Amazon has not issued a statement regarding Judge Chun’s decision to allow the lawsuit to proceed. The case represents yet another challenge for the retail giant as it grapples with increasing scrutiny over its competitive practices.

    Source:Bloomberg