A federal judge in Seattle denied part of Amazon's motion to dismiss a class action antitrust lawsuit filed 2 years ago by third-party sellers,
Protocol reported on Tuesday.
But on Friday, a DC Superior Court Judge threw out an antitrust lawsuit against Amazon filed last year by DC's Attorney General, according to the New York Times (via
the Verge).
Amazon sellers face enormous pressure to offer low prices thanks to the Buy Box - some excerpts from the Seattle lawsuit underscore its importance, including the following (via
CourtListener.com):
- "Accepting FBA services also greatly increases the likelihood that the seller's product will be selected for the coveted Amazon Buy Box. Meanwhile, sellers' enrollment in FBA is a win for Amazon, who never takes title to the third party seller's inventory, yet enjoys a steady revenue from its sellers, who do all the merchandising and take on the inventory risk."
- "... the "fair pricing" rule penalizes merchants who sell their products at a higher price on the Amazon.com platform by removing the product from the Buy Box, suspending shipping options, and terminating selling privileges."
- "When users click the "Add to Cart" button on the Amazon.com platform, they are buying from one merchant and one merchant only - the Buy Box winner. Similarly, when a user opts for the "Buy Now" button, that will also lead to the Buy Box owner. Over 90% of sales occur using the Buy Box. Eligibility depends on a number of factors, including the seller's reputation, price, efficiency, and whether the seller is selling its product for a lower price through competing retail e-commerce channels."
The complaint also discusses what factors go into "winning" the Buy Box. But can regulators like the DC Attorney General truly regulate tech companies like Amazon (and eBay, and Google) without knowing the algorithms they use?
The Food and Drug Administration (FDA) is responsible for assuring that foods sold in the United States are "safe, wholesome and properly labeled," and companies must list ingredients of their products. Should Amazon and Google similarly be required to list the factors ("ingredients") that go into their algorithms?
Because of the immense pressure to offer low prices in a cutthroat environment, some sellers are tempted to work together to maintain prices - a strategy that the government also frowns upon.
In July, a Tennessee seller was charged in an alleged conspiracy to "suppress and eliminate competition by fixing prices of DVDs and Blu-Ray Disks sold through Amazon." In January, the government
charged 3 more Amazon sellers with price-fixing DVDs.