Amazon files motion to dismiss FTC antitrust case

Amazon asked a judge to dismiss the Federal Trade Commission’s (FTC) antitrust case against the e-commerce giant on Friday, arguing that the company engages in legal competitive behavior that benefits consumers.

“Amazon promptly matches rivals’ discounts, features competitively priced deals rather than overpriced ones, and ensures best-in-class delivery for its Prime subscribers,” the company argued in Friday’s filing. 

“Those practices—the targets of this antitrust Complaint— benefit consumers and are the essence of competition,” it added.

The FTC and a bipartisan coalition of 17 other states sued Amazon in late September, alleging that it used anti-competitive measures that punish sellers and deter other online retailers from offering lower prices.

It also accused the e-commerce giant of conditioning a product’s eligibility for Prime on the seller’s use of its fulfillment service, making it more expensive for sellers to offer products on other platforms.

In previously redacted portions of the lawsuit made public in early November, the FTC also alleged that Amazon made more than $1 billion in excess profits by employing a secret algorithm codenamed “Project Nessie.”

Project Nessie, which Amazon used between 2015 and 2019, was able to raise prices on and off the platform by predicting whether other online stores would follow an Amazon price hike, the FTC said.

However, Amazon argued on Friday that the activities the agency has deemed anti-competitive are “common retail practices that presumptively benefit consumers.”

The company suggested that its pricing mechanism, which automatically matches any price change by another online store or seller, is a standard discounting tactic encouraged by antitrust laws.

The FTC had described the mechanism as an “anti-discounting tactic” that deterred other sellers from attempting to compete with Amazon on price.

Amazon also disputed the allegations that it conditions Prime eligibility on the use of its fulfillment service.

However, it noted that even if it were true, “such seller recommendations—made to protect trust in a retailer’s brand and to deliver products to consumers with unprecedented speed, service, and reliability—are presumptively procompetitive.”