Federal Trade Commission et al v. Amazon.com Inc

Filing 1

COMPLAINT against defendant(s) Amazon.com, Inc. Attorney Susan A Musser added to party Federal Trade Commission(pty:pla) filed by Federal Trade Commission. (Attachments: #1 Civil Cover Sheet, #2 Summons for Amazon.com, Inc.)(Musser, Susan) (No Fee Required)

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 1 of 172

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON

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FEDERAL TRADE COMMISSION,

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STATE OF NEW YORK,

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STATE OF CONNECTICUT,

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COMMONWEALTH OF PENNSYLVANIA,

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STATE OF DELAWARE,

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STATE OF MAINE,

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STATE OF MARYLAND,

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COMMONWEALTH OF MASSACHUSETTS,

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STATE OF MICHIGAN,

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STATE OF MINNESOTA,

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STATE OF NEVADA,

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STATE OF NEW HAMPSHIRE,

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STATE OF NEW JERSEY,

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STATE OF NEW MEXICO,

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STATE OF OKLAHOMA,

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STATE OF OREGON,

CASE NO.: 2:23-cv-01495
COMPLAINT

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COMPLAINT - i
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 2 of 172

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STATE OF RHODE ISLAND,

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and

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STATE OF WISCONSIN,
Plaintiffs,

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v.
AMAZON.COM, INC., a corporation,
Defendant.

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COMPLAINT - ii
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 3 of 172

TABLE OF CONTENTS

1
2 I.

NATURE OF THE CASE .................................................................................................. 1

3 II.

JURISDICTION AND VENUE ....................................................................................... 11

4 III.

THE PARTIES.................................................................................................................. 12

5 IV.

AMAZON’S OPERATIONS............................................................................................ 18

6

A.

Amazon’s First-Party Retail And Third-Party Marketplace Business Units ........ 19

7

B.

Amazon’s Online Superstore ................................................................................ 21

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C.

Amazon’s Advertising Services ............................................................................ 28

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D.

Amazon Prime ...................................................................................................... 32

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E.

Fulfillment By Amazon ........................................................................................ 38

11 V.

AMAZON POSSESSES MONOPOLY POWER IN TWO RELEVANT MARKETS ... 39

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A.

Amazon Has Durable Monopoly Power In The Online Superstore Market ......... 40

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B.

Amazon Has Durable Monopoly Power In The Online Marketplace
Services Market .................................................................................................... 59

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C.

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Feedback Loops Between The Relevant Markets Further Amplify The
Cumulative Impact Of Scale And Related Network Effects ................................ 65

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Direct Evidence Further Demonstrates Amazon’s Monopoly Power................... 71

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D.

18 VI.

AMAZON IS ENGAGED IN A COURSE OF CONDUCT THAT ILLEGALLY

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MAINTAINS ITS MONOPOLIES IN BOTH RELEVANT MARKETS ....................... 80

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A.

Exclusionary Anti-Discounting Conduct That Stifles Price Competition ............ 81

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Amazon Maintains Its Monopolies In Both Relevant Markets Through

B.

Amazon Maintains Its Monopolies In Both Relevant Markets By Coercing
Sellers To Use Amazon’s Fulfillment Service.................................................... 102

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COMPLAINT - iii
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 4 of 172

C.

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Amazon's Anticompetitive Tactics Work Together To Amplify Their
Overall Exclusionaiy Effect.. .............................................................................. 11 7

3 VII.

AMAZON

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............................................................ 119
A.

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Project Nessie
........................................................ 11 9

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B.

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Amazon Has

Project Nessie
................................................................ . 121

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9 VIII.

AMAZON'S CONDUCT HARMS COMPETITION AND CONSUMERS ................. 122

10 IX.

VIOLATIONS ALLEGED ............................................................................................. 125

11 X.

REQUEST FOR RELIEF ............................................................................................... 147

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COMPLAINT - iv
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 5 of 172

Plaintiffs Federal Trade Connnission ("FTC") and the states of New York, Connecticut,

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2 Pennsylvania, Delaware, Maine, Maiyland, Massachusetts, Michigan, Minnesota, Nevada, New
3 Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, and Wisconsin, by and
4 through their respective Attorneys General (together, the "State Plaintiffs," and collectively with
5 the FTC, "Plaintiffs"), petition this Comt pmsuant to Section 13(b) of the Federal Trade
6 Commission Act ("FTC Act"), 15 U.S.C. § 53(b); 15 U.S.C. § 26; and applicable state laws for
7 equitable relief against Defendant Amazon.com, Inc. ("Amazon") to undo and prevent its unfair
8 methods of competition in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a); Section 2
9 of the She1man Act, 15 U.S.C. § 2; and state competition and consumer protection laws.
10 I.

NATURE OF THE CASE

The early days of online trade were bmsting with possibility. Competition

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12 flomished. A newly connected nation saw a wide-open frontier where anyone with a good idea
13 would have a fair shot at success.
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2.

Today, however, this wide-open frontier has been enclosed. A single company,

15 Amazon, has seized control over much of the online retail economy.
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3.

Amazon is a monopolist. It exploits its monopolies in ways that emich Amazon

17 but ha1m its customers: both the tens of millions of American households who regularly shop on
18 Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to
19 reach them.
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4.

For exainple, Amazon has hiked so steeply the fees it charges sellers that it now

21 repo1tedly takes close to half of eve1y dollar from the typical seller that uses Amazon's
22 fulfillment service. Amazon recognizes that sellers find "that it has become more difficult over
23 time to be profitable on Amazon" due to Amazon's

But as one seller

24 explains, "we have nowhere else to go and Amazon knows it." Amazon has also- COMPLAINT - 1
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 6 of 172

through a -

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Amazon's Project Nessie has ah-eady

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3 extracted over
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operation called "Project Nessie."

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from American households.
In addition to overcharging its customers, Amazon is degrading the services it

5 provides them. Amazon's online storefront once prioritized relevant, organic search results.
Amazon shifted gearn so that it

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7 now litters its storefront with pay-to-play adve1tisements. Amazon executives internally
8 acknowledge this creates
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by making it
This practice, too, hanns

10 both sellers and shoppers alike. Most sellers must now pay for adveitising to reach Amazon's
11 massive base of online shoppers, while shoppers consequently face less relevant search results
12 and are steered toward more expensive products. Notably, Amazon has increased not only the
13 number of adve1tisements it shows, but also
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because Amazon can

15 extract billions of dollars through increased adve1tising despite worsening its se1vices for
16 customers.
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6.

In a competitive world, Amazon's decision to raise prices and degrade se1vices

18 would create an opening for rivals and potential rivals to attract business, gain momentum, and
19 grow. But Amazon has engaged in an unlawful monopolistic strategy to close off that
20 possibility.
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7.

This case is about the illegal course of exclusionaiy conduct Amazon deploys to

22 block competition, stunt rivals' growth, and cement its dominance. The elements of this strategy
23 ai·e mutually reinforcing. Amazon uses a set of anti-discounting tactics to prevent rivals from
24 growing by offering lower prices, and it uses coercive tactics involving its order fulfillment
COMPLAINT - 2
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 7 of 172

1 service to prevent rivals from gaining the scale they need to meaningfully compete. Amazon
2 deploys this interconnected strategy to block off every major avenue of competition—including
3 price, product selection, quality, and innovation—in the relevant markets for online superstores
4 and online marketplace services.
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8.

Amazon’s course of conduct has unlawfully entrenched its monopoly position in

6 both relevant markets. According to an industry source, Amazon now captures more sales than
7 the next fifteen largest U.S. online retail firms combined. Yet Amazon has violated the law not
8 by being big, but by how it uses its scale and scope to stifle competition.
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9.

A critical mass of customers is key to powering what Amazon calls its

10 “flywheel.” By providing sellers access to significant shopper traffic, Amazon is able to attract
11 more sellers onto its platform. Those sellers’ selection and variety of products, in turn, attract
12 additional shoppers. More shoppers yield more customer-generated product ratings, reviews,
13 and valuable consumer data for Amazon to use. All of this enables Amazon to benefit from the
14 accelerated growth and momentum that network effects and scale economies can fuel.
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10.

The biggest threat to Amazon’s monopoly power would be for a rival to attract its

16 own critical mass of dedicated customers. Competitors able to build a sizable base of either
17 shoppers or sellers could spin up their own “flywheels,” overcome barriers to entry and
18 expansion, and achieve the scale needed to compete effectively in the relevant markets. As Mr.
19 Bezos once wrote, “[o]nline selling (relative to traditional retailing) is a scale business
20 characterized by high fixed costs and relatively low variable costs. This makes it difficult to be a
21 medium-sized e-commerce company,” and it is “difficult . . . for single-category e-commerce
22 companies to achieve the scale necessary to succeed.” In order to “build an important and
23 lasting company . . . online in e-commerce,” Mr. Bezos explained, “you have to have a scale
24 business,” because “[t]his kind of business isn’t going to work in small volumes.”
COMPLAINT - 3
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 8 of 172

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11.

Having gained its own critical mass of both shoppers and sellers, Amazon set out

2 to deny both current and would-be rivals the ability to do the same.
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12.

Amazon uses its vast power, size, and control over multiple business units to

4 implement an interrelated and exclusionary course of conduct. Each element of this overarching
5 strategy aims at the same goal: to keep rivals from gaining the scale needed to compete
6 effectively against Amazon. And each element amplifies the force of the rest, in a self7 reinforcing cycle of dominance and harm.
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13.

One set of tactics stifles the ability of rivals to attract shoppers by offering lower

9 prices. Amazon deploys a sophisticated surveillance network of web crawlers that constantly
10 monitor the internet, searching for discounts that might threaten Amazon’s empire. When
11 Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same
12 product on Amazon, Amazon punishes that seller. It does so to prevent rivals from gaining
13 business by offering shoppers or sellers lower prices.
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14.

Originally, Amazon imposed explicit contractual requirements barring all sellers

15 from offering their goods for lower prices anywhere else. After European regulators began
16 investigating, Amazon got rid of these requirements in Europe. After a U.S. senator called for
17 antitrust scrutiny, Amazon did the same in the United States in 2019.
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15.

Amazon recognized that dropping an explicit contractual requirement while

19 continuing to use other anti-discounting tactics would appear “not only trivial but a trick and an
20 attempt to garner goodwill with policymakers amid increasing competition concerns.”
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16.

But Amazon has done just that. It continues to use—and add—other anti-

22 discounting tactics to discipline sellers who offer lower-priced goods elsewhere. The sanctions
23 Amazon levies on sellers vary. For example, Amazon knocks these sellers out of the all24 important “Buy Box,” the display from which a shopper can “Add to Cart” or “Buy Now” an
COMPLAINT - 4
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 9 of 172

1 Amazon-selected offer for a product.

Nearly ■ %

of Amazon sales are made through the Buy

2 Box and, as Amazon internally recognizes, eliminating a seller from the Buy Box causes that
3 seller's sales to "tank." Another fo1m of punishment is to bury discounting sellers so far down in
4 Amazon's search results that they become effectively invisible. Still another is . . . .
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For

6 especially impo1tant sellers, Amazon keeps in place a targeted version of the contractual
7 requirement it supposedly stopped using in 2019. If caught offering lower prices elsewhere
8 online, these sellers face the ultimate threat: not just banishment from the Buy Box, but total
9 exile from Amazon 's Marketplace. As Amazon internally admits, these tactics have al
and many sellers "live in constant fear" of them.
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17.

Moreover, Amazon' s one-two punch of seller punishments and high seller fees

12 often forces sellers to use their inflated Amazon prices as a price floor everywhere else. As a
13 result, Amazon's conduct causes online shoppers to face aitificially higher prices even when
14 shopping somewhere other than Amazon. Amazon's plmitive regime distorts basic market
15 signals: one of the ways sellers respond to Amazon's fee hikes is by increasing their own prices
16 off Amazon. An executive from another online retailer sums up this perverse dynainic:
17 Amazon's anti-discOlmting conduct
Amazon 's illegal tactics mean that when Amazon raises its

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19 fees, others- competitors, sellers, and shoppers- suffer the harms.
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18.

Amazon's tactics suppress rival online superstores ' ability to compete for

2 1 shoppers by offering lower prices, thereby depriving American households of more affordable
22 options. Amazon's conduct also suppresses rival online marketplace se1vice providers' ability to
23 compete for sellers by offering lower fees because sellers cam1ot pass along those savings to
24 shoppers in the fonn of lower product prices.
COMPLAINT - 5
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 10 of 172

These various anti-discounting tactics constrain sellers operating on Amazon's

19.

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2 third-party business unit, through which sellers set their own product prices. But Amazon also
3 operates an enoimous first-patty aim, which accounted for 40% of its overall unit sales in the
4 second quarter of 2023, as shown in Figure 1. Using its direct control over these prices, Amazon
5 created another anti-discounting tool to weaponize its first-pruiy aim in its campaign against
6 competition.
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Percentage Of Unit Sales On Amazon From Third-Party
Marketplace Sellers vs. Amazon First-Party Retail

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10%

0%

20%
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30%

40%

50%

Third-Party Sellers on Amazon

60%

70%

80%

90%

100%

Amazon First-Party Retail

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Figure 1. Source: Amazon Q2 2023 Earnings Call.

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20.

Amazon has implemented an algorithm for the express pmpose of dete1Ting other

15 online stores from offering lower prices.
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Ultimately, this conduct is meant to deter

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22 rivals from attempting to compete on price altogether-competition that could bring lower prices
23 to tens of millions of American households. As a result of this conduct, Amazon predicted,
24 "prices will go up."
COMPLAINT - 6
CASE NO. - :- -cv-- -

Amazon' s prediction has borne out and the
FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 11 of 172

1 algorithm has worked just as ■ envisioned: suppressing price competition by disciplining rival
2 retailers who dare to discount.
21.

3

Amazon's various anti-discounting tactics upend the n01mal give-and-take

4 process of competition. Even rivals that offer lower-cost marketplace services strnggle to attract
5 sellers and watch as sellers hike prices on their storefronts due to fear of Amazon 's penalties.
6 Many sellers raise their prices off Amazon to avoid punishment. Others never tiy discounting in
7 the first place; fear of retribution by Amazon drives them to preemptively set higher prices
8 eve1ywhere. Still others simply stop---or never sta1i-selling anywhere other than Amazon to
9 avoid any possibility of Amazon's sanctions.
22.

By taming price cutters into price followers, Amazon freezes price competition

11 and deprives American shoppers of lower prices.

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23.

Alongside these anti-discounting tactics, Amazon also goes a step fiuiher and

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Amazon created a -

algorithm internally codenamed

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: it has generated more than ■■- in excess profit for

17 Nessie
18 Amazon.
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24.

Amazon deploys yet another tactic as paii of its monopolistic course of conduct.

21 Amazon conditions sellers ' ability to be "Prime eligible" on their use of Amazon's order
22 fulfillment service. As with Amazon's anti-discounting tactics, this coercive conduct forecloses
23 Amazon's rivals from drawing a critical mass of sellers or shoppers-thereby depriving them of

24 the scale needed to compete effectively online.
COMPLAINT - 7
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 12 of 172

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25.

Amazon makes Prime eligibility critical for sellers to fully reach Amazon's

2 eno1mous base of shoppers. In 2021, more than ■ % of all units sold on Amazon in the United
3 States were Prime eligible.
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26.

Prime eligibility is critical for sellers in pali because of the en01mous reach of

5 Amazon's Prime subscription program. According to public rep01ts, Mr. Bezos told Amazon
6 executives that Prime was created in 2005 to "draw a moat around [Amazon' s] best customers."
7 Prime now blankets more than ■% of all U.S. households, with its reach extending as far as
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% in some zip codes.
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Amazon requires sellers who want their products to be Prime eligible to use

10 Amazon's fulfillment service, Fulfillment by Amazon ("FBA"), even though many sellers would
11 rather use an alternative fulfillment method to store and package customer orders.
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28.

Many sellers would also prefer to "multihome," simultaneously offering their

13 goods across multiple online sales channels. Multihoming can be an especially critical
14 mechanism of competition in online markets, enabling rivals to overcome the baniers to ently
15 and expansion that scale economies and network effects can create. Multihoming is one way that
16 sellers can reduce their dependence on a single sales channel.
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29.

Sellers could multihome more cheaply and easily by using an independent

18 fulfillment provider- a provider not tied to any one marketplace-to fulfill orders across
19 multiple marketplaces. Pennitting independent fulfillment providers to compete for any order20 on or off Amazon- would enable them to gain scale and lower their costs to sellers. That, in
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tum, would make independent providers even more atti·active to sellers seeking a single,

22 universal provider. All of this would make it easier for sellers to offer items across a variety of
23 outlets, fostering competition and reducing sellers ' dependence on Amazon.
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COMPLAINT - 8
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 13 of 172

1

30.

But by coercively conditioning access to an eno1mous base of shoppers on sellers'

2 use of FBA, Amazon forecloses that world.
3

31.

Amazon caught a glimpse of this alternative universe when it temporarily relaxed

4 its coercive conduct. As Amazon recognized, this decision was immediately popular with both
5 shoppers and sellers. But internally,
that would threaten Amazon's monopoly power. An

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32.

To combat this competitive threat, Amazon resumed its coercive fulfillment

12 conduct: today, virtually all sellers must use Amazon's proprietaiy FBA se1vice to fully reach
13 Amazon's eno1mous base of U.S. shoppers.
14

33.

Each element of Amazon's monopolistic strategy works to keep its rivals and

15 potential rivals from growing, gaining momentum, and achieving the scale necessaiy to
16 meaningfully compete against Amazon. The cumulative impact of Amazon's unlawful conduct
17 is greater than the harm caused by any particular element. Each aspect of Amazon' s strategy
18 amplifies the exclusionaiy effects of the others, further insulating Amazon from meaningful
19 competition and fmther widening the gulf between Amazon and eve1yone else.
20

34.

Together, this self-reinforcing comse of conduct blocks eve1y impo1tant avenue

2 1 of competition. With its monopoly power cemented, Amazon is now extracting monopoly
22 profits without denting- and instead while growing- its monopoly power. Amazon has
23 consistently hiked the prices it charges sellers, as shown in Figure 2.
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COMPLAINT - 9
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 14 of 172

1
2
3
4

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6

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8
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Figure 2. Source: Amazon Internal Documents.
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35.

Amazon's price hikes in the fonn of pay-to-play adve1tisements have been

12 eno1mously lucrative, leading its revenues from U.S. ad sales to skyrocket from - - in
13 2015 to- - in 2021. Amazon took i n - - in revenue from U.S. Marketplace
14 seller fees in 2021 alone. Strikingly, these seller fees now account for over ■ % of Amazon 's
15 total profits. Sellers pay. Shoppers get lower-quality search results for higher-priced products.
16 Only Amazon wins.
17

36.

In a market free from anticompetitive restraints, Amazon 's choice to exploit its

18 monopoly power would create openings for rivals to enter, grow, and meaningfully compete.
19 Rival online marketplaces could draw sellers by offering them lower fees or better te1ms, and
20 sellers could pass along those lower costs to American shoppers in the fo1m of lower prices.
21 Rival online superstores, meanwhile, could draw shoppers by offering better prices, greater
22 selection, or a superior shopping experience. But Amazon's illegal comse of conduct shields
23 Amazon from the competitive checks it would face in a free ente1prise system.
24
COMPLAINT - 10
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 15 of 172

37.

1

Amazon's illegal monopolistic strategy is paying off for Amazon, but at great cost

2 to tens of millions of American households and hm1dreds of thousands of sellers.
38.

3

Left unchecked, Amazon will continue its illegal comse of conduct to maintain its

4 monopoly power. That conduct will include-but will not necessarily be limited to- the
5 schemes it uses today. As Mr. Bezos has said, "on matters of vision we are stubborn and
6 relentless," but"[o]n the details, we at Amazon are always flexible."
39.

7

Plaintiffs bring this lawsuit despite Amazon's extensive effo1is to impede the

8 government's investigation and hide infonnation about its internal operations. Amazon
9 executives systematically and intentionally
of the Signal messaging app. Amazon prejudicially I
11
12 despite Plaintiffs' instrncting Amazon not to do so.
40.

13

Plaintiffs now ask this Comt to put an end to Amazon's illegal comse of conduct,

14 p1y loose Amazon's monopolistic control, deny Amazon the fmits of its unlawful practices, and
15 restore the lost promise of competition.
16 II.

JURISDICTION AND VENUE

17

41.

This Court has subject matter jmisdiction over this action pmsuant to Section 5(a)

18 of the FTC Act, 15 U.S.C. § 45(a), 15 U.S.C. § 26, 28 U.S.C. §§ 1331 , 1337(a), and 1345, and
19 supplemental jmisdiction pursuant to 28 U.S.C. § 1367(a). This Comi's exercise of
20 supplemental jmisdiction over State Plaintiffs' state law claims will avoid mmecessa1y
21 duplication and multiplicity of actions and will promote the interests of judicial economy,
22 convenience, and fairness.
23

42.

This Comi has personal jurisdiction over Amazon because Amazon has the

24 requisite constitutional contacts with the United States of America pmsuant to 15 U.S.C. § 53(b).
COMPLAINT - 11
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 16 of 172

1 This Court also has personal jurisdiction over Amazon because it maintains its corporate
2 headquarters in Washington, does business in Washington, and has engaged in the illegal
3 conduct alleged herein in Washington, including by making corporate decisions challenged in
4 this matter from its corporate headquarters in Washington.
43.

5

Amazon’s general business practices, and the unfair methods of competition

6 alleged herein, are activities “in or affecting commerce” within the meaning of Section 5 of the
7 FTC Act, 15 U.S.C. § 45.
44.

8

Amazon is, and at all relevant times has been, a corporation, as the term

9 “corporation” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
45.

10

Venue in this district is proper under 15 U.S.C. § 22, 28 U.S.C. § 1391(b), (c),

11 and (d), and 15 U.S.C. § 53(b). Amazon is found, resides, transacts business, and has agents in
12 this state and district, and a portion of the affected commerce described herein has been carried
13 out in this state and district.
14 III.

THE PARTIES

15

46.

Plaintiff FTC is an administrative agency of the United States Government

16 established, organized, and existing pursuant to the FTC Act, 15 U.S.C. § 41, et seq., with its
17 principal offices in the District of Columbia. The FTC is vested with authority and responsibility
18 for enforcing, among other laws, Section 5 of the FTC Act, 15 U.S.C. § 45, and is authorized
19 under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to initiate court proceedings to enjoin
20 violations of any law the FTC enforces. This case is proper under Section 13(b) of the FTC Act,
21 15 U.S.C. § 53(b), because the FTC has reason to believe that Amazon is violating, or is about to
22 violate, Section 5 of the FTC Act, making it appropriate, efficient, and suitable to file this action
23 in federal court with State Plaintiffs to seek the requested relief.
24
COMPLAINT - 12
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 17 of 172

1

47.

Plaintiff State of New York is a sovereign state. The Attorney General of the

2 State of New York is the chief legal officer for the state and brings this action on behalf of the
3 people of the State of New York to protect the state, its general economy, and its residents from
4 Amazon’s unlawful business practices. The Attorney General has the authority under federal
5 and state law, including Section 16 of the Clayton Act and New York Executive Law § 63(12),
6 to pursue injunctive and other equitable relief to prevent and remedy the harms caused by
7 anticompetitive conduct.
8

48.

Plaintiff State of Connecticut is a sovereign state. The Attorney General of the

9 State of Connecticut is the chief legal officer for the state and brings this action on behalf of the
10 people of the State of Connecticut to protect the state, its general economy, and its residents from
11 Amazon’s unlawful business practices. The Attorney General has the authority under federal
12 and state law, including Section 16 of the Clayton Act and the Connecticut Antitrust Act, Conn.
13 Gen. Stat. § 35-24 et seq., and the Attorney General, acting at the request of the Commissioner of
14 Consumer Protection, has the authority under the Connecticut Unfair Trade Practices Act, Conn.
15 Gen. Stat. § 42-110b et seq., to pursue injunctive and other equitable relief to prevent and
16 remedy the harms caused by anticompetitive conduct.
17

49.

Plaintiff Commonwealth of Pennsylvania is a sovereign commonwealth state.

18 The Attorney General of the Commonwealth of Pennsylvania is the chief legal officer for the
19 state and brings this action in the name and on behalf of the people of the Commonwealth of
20 Pennsylvania to protect the Commonwealth, its general economy, its residents, and consumers
21 from Amazon’s unlawful business practices. The Attorney General has authority under state and
22 federal law, including Section 16 of the Clayton Act, the Pennsylvania Unfair Trade Practices
23 and Consumer Protection Law, 73 P.S. §§ 201-4 and 201-4.1, and the Commonwealth Attorneys
24
COMPLAINT - 13
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 18 of 172

1 Act, 71 P.S. § 732-204(c), to pursue injunctive and other equitable relief to prevent and remedy
2 the harms caused by anticompetitive conduct and unfair and deceptive acts and practices.
3

50.

Plaintiff State of Delaware is a sovereign state. The Attorney General of the State

4 of Delaware is the chief legal officer for the state and brings this action in the name and on
5 behalf of the people of the State of Delaware to protect the state, its general economy, and its
6 residents from Amazon’s unlawful business practices. The Attorney General has authority under
7 federal and state law, including Section 16 of the Clayton Act and Del. Code Ann. Tit. 6, § 2105,
8 to pursue injunctive and other equitable relief to prevent and remedy the harms caused by
9 anticompetitive conduct.
10

51.

Plaintiff State of Maine is a sovereign state. The Attorney General of the State of

11 Maine is the chief legal officer for the state and brings this action in the name and on behalf of
12 the people of the State of Maine to protect the state, its general economy, and its residents from
13 Amazon’s unlawful business practices. The Attorney General has authority under state and
14 federal law, including Section 16 of the Clayton Act and the Maine Monopolies and Profiteering
15 Law, 10 M.R.S.A. § 1104, to pursue injunctive and other equitable relief to prevent and remedy
16 the harms caused by anticompetitive conduct.
17

52.

Plaintiff State of Maryland is a sovereign state. The Attorney General of the State

18 of Maryland is the chief legal officer for the state and brings this action in the name and on
19 behalf of the people of the State of Maryland to protect the state, its general economy, and its
20 residents from Amazon’s unlawful business practices. The Attorney General has authority under
21 state and federal law, including Section 16 of the Clayton Act and Maryland Commercial Code
22 Ann. § 11-201 et seq., to pursue injunctive and other equitable relief to prevent and remedy the
23 harms caused by anticompetitive conduct.
24
COMPLAINT - 14
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 19 of 172

1

53.

Plaintiff Commonwealth of Massachusetts is a sovereign state. The Attorney

2 General of the Commonwealth of Massachusetts is the chief legal officer for the state and brings
3 this action on behalf of the people of the Commonwealth of Massachusetts to protect the state, its
4 general economy, and its residents from Amazon’s unlawful business practices. The Attorney
5 General has the authority under federal law, including Section 16 of the Clayton Act, to pursue
6 injunctive and other equitable relief to prevent and remedy the harms caused by anticompetitive
7 conduct.
8

54.

Plaintiff State of Michigan is a sovereign state. The Attorney General of the State

9 of Michigan is the chief legal officer for the state and brings this action on behalf of the people
10 of the State of Michigan to protect the state, its general economy, and its residents from
11 Defendants’ unlawful business practices. The Attorney General has the authority under federal
12 and state law, including Section 16 of the Clayton Act and the Michigan Antitrust Reform Act,
13 MCL 445.771 et seq., to pursue injunctive and other equitable relief to prevent and remedy the
14 harms caused by anticompetitive conduct.
15

55.

Plaintiff State of Minnesota is a sovereign state. The Attorney General of the

16 State of Minnesota is the chief legal officer for the state and brings this action on behalf of the
17 people of the State of Minnesota to protect the state, its general economy, and its residents from
18 Amazon’s unlawful business practices. The Attorney General has the authority under federal
19 and state law, including Section 16 of the Clayton Act and Minnesota Statute 8.31, to pursue
20 injunctive and other equitable relief to prevent and remedy the harms caused by anticompetitive
21 conduct.
22

56.

Plaintiff State of Nevada is a sovereign state. The Attorney General of the State

23 of Nevada is the chief legal officer for the state, and the Consumer Advocate is vested with the
24 authority to enforce Nevada’s antitrust laws. The Attorney General, by and through the
COMPLAINT - 15
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 20 of 172

1 Consumer Advocate, brings this action on behalf of the people of the State of Nevada to protect
2 the state, its general economy, and its residents from Amazon’s unlawful business practices. The
3 Nevada Attorney General and the Consumer Advocate have the authority under federal and state
4 law, including Section 16 of the Clayton Act, and Nev. Rev. Stat. §§ 228.380 and 598A.160, to
5 pursue injunctive and other equitable relief to prevent and remedy the harms caused by
6 anticompetitive conduct.
7

57.

Plaintiff State of New Hampshire is a sovereign state, acting through the Office of

8 the Attorney General, Consumer Protection and Antitrust Bureau to enforce state and federal
9 laws designed to protect free and open markets for the benefit of consumers. The Attorney
10 General brings this action on behalf of the State of New Hampshire to protect the state, its
11 general economy, and its consumers from Amazon’s unlawful business practices. The Attorney
12 General has the authority under state and federal law, including Section 16 of the Clayton Act
13 and New Hampshire Combinations and Monopolies Act, N.H. Rev. Stat. Ann. ch. 356 et seq., to
14 pursue injunctive and other equitable relief to prevent and remedy the harms caused by the
15 anticompetitive conduct.
16

58.

Plaintiff State of New Jersey is a sovereign state. The Attorney General of the

17 State of New Jersey is the chief legal officer for the state and brings this action in the name and
18 on behalf of the people of the State of New Jersey to protect the state, its general economy, and
19 its residents from Amazon’s unlawful business practices. The Attorney General has authority
20 under state and federal law, including Section 16 of the Clayton Act, the New Jersey Antitrust
21 Act, New Jersey Statutes Annotated (“N.J.S.A.”) § 56:9-1 to -19 (“NJ ATA”), and the New
22 Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1 to -227 (“NJ CFA”), to pursue injunctive and
23 other equitable relief to prevent and remedy the harms caused by anticompetitive conduct and
24 unfair and deceptive acts and practices. The Director of the New Jersey Division of Consumer
COMPLAINT - 16
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 21 of 172

1 Affairs is charged with the responsibility of administering the NJ CFA on behalf of the Attorney
2 General. N.J.S.A. 52:17B-120; N.J.S.A. 52:17B-124. The Attorney General brings this action
3 for relief pursuant to his authority under the NJ ATA, specifically N.J.S.A. 56:9-6, 56:9-10(a),
4 56:9-12(b) and the NJ CFA, specifically N.J.S.A. 56:8-8, 56:8-11, and 56:8-19.
5

59.

Plaintiff State of New Mexico is a sovereign state. The Attorney General of the

6 State of New Mexico is the chief legal officer for the state and brings this action on behalf of the
7 people of the State of New Mexico to protect the state, its general economy, and its residents
8 from Amazon’s unlawful business practices. The Attorney General has the authority under
9 federal and state law, including Section 16 of the Clayton Act and Section 10 of the New Mexico
10 Antitrust Act, to pursue injunctive and other equitable relief to prevent and remedy the harms
11 caused by anticompetitive conduct.
12

60.

Plaintiff State of Oklahoma is a sovereign state. The Attorney General of the

13 State of Oklahoma is the chief legal officer of the state and brings this action in the name and on
14 behalf of the people of the State of Oklahoma to protect the state, its general economy, and its
15 residents from Amazon’s unlawful business practices. The Attorney General has authority under
16 state and federal law, including Section 16 of the Clayton Act and the Oklahoma Antitrust
17 Reform Act, 15 79 O.S. §§ 201, et seq., to pursue injunctive and other equitable relief to prevent
18 and remedy the harms caused by anticompetitive conduct.
19

61.

Plaintiff State of Oregon is a sovereign state. The Attorney General of the State

20 of Oregon is the chief legal officer for the state and brings this action on behalf of the people of
21 the State of Oregon to protect the state, its general economy, and its residents from Amazon’s
22 unlawful business practices. The Attorney General has the authority under federal and state law
23 including Section 16 of the Clayton Act and the Oregon Antitrust Law, Oregon Revised Statutes
24
COMPLAINT - 17
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 22 of 172

1 (“ORS”) 646.705 to ORS 646.836, to pursue injunctive and other equitable relief to prevent and
2 remedy the harms caused by anticompetitive conduct.
62.

3

Plaintiff State of Rhode Island is a sovereign state. The Attorney General of the

4 State of Rhode Island is the chief legal officer for Rhode Island and brings this action on behalf
5 of the people of the State of Rhode Island to protect Rhode Islanders from Amazon’s unlawful
6 business practices. The Attorney General has the authority under federal and state law, including
7 Section 16 of the Clayton Act and Rhode Island General Laws § 6–13.1–1 et seq., to pursue all
8 available types of relief to prevent and remedy the harms caused by anticompetitive conduct.
63.

9

Plaintiff State of Wisconsin is a sovereign state. The Attorney General of the

10 State of Wisconsin is the chief legal officer for the state and brings this action on behalf of the
11 people of the State of Wisconsin to protect the state, its general economy, and its residents from
12 Amazon’s unlawful business practices. The Attorney General has the authority under federal
13 and state law, including Section 16 of the Clayton Act and Wis. Stat. § 133.03, to pursue
14 injunctive and other equitable relief to prevent and remedy the harms caused by anticompetitive
15 conduct.
64.

16

Defendant Amazon is a multinational online retail and technology company that

17 conducts business throughout the United States. Amazon is headquartered in Seattle,
18 Washington, with its principal place of business at 410 Terry Avenue North, Seattle, Washington
19 98109, and is organized and existing under the laws of Delaware. Unless otherwise specified,
20 “Amazon” refers to Amazon.com, Inc., and all corporate predecessors, subsidiaries, successors,
21 and affiliates.
22 IV.

AMAZON’S OPERATIONS

23

65.

Amazon is one of the largest companies in the world, ranked among the five

24 largest publicly traded companies by both market capitalization and revenue. Amazon’s
COMPLAINT - 18
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 23 of 172

1 business spans vast portions of the American economy, extending from its core of online retail
2 into media, cloud computing, brick-and-mortar groce1y stores, an anay of logistics and
3 operational se1vices, and more. It has expanded in part through an acquisition spree, buying up
4 more than 100 companies in sectors spanning ente11ainment, groce1y, and healthcare. Its reach
5 ranges from selling socks and making movies to mnning a phaimacy and operating datacenters
6 that house exabytes of data.
7

66.

The key aspects of Amazon' s operations relevant to this Complaint are its:

8 (1) first-party Retail and third-pai1y Marketplace business units; (2) public-facing online
9 superstore; (3) adve11ising se1vices; (4) Prime subscription program; and (5) fulfillment se1vice.

11

A.

Amazon's First-Party Retail And Third-Party Marketplace Business Units

67.

Amazon began as an online bookstore in 1994 and rapidly expanded into new

12 product categories: first DVDs and CDs, then electronics and toys, and then nearly eve1ything.
13 In 2020, Amazon sold almost-- unique products across virtually eve1y conceivable
14 catego1y to U.S. consumers.
15

68.

Amazon originally sold goods to shoppers by pm-chasing items wholesale and

16 reselling them on its website. Amazon calls its wholesale suppliers "vendors." Today, Amazon
17 continues to sell a wide range of products through this type of vendor-retailer relationship, from
18 laundiy detergent to sports equipment.
19

69.

Amazon also sells its own private label goods. These range from devices like

20 Amazon's Kindle e-reader or Ring doorbell, to consumer products like batteries sold under the
21 "Amazon Basics" label, to products without any cleai· Amazon affiliation, such as dietaiy
22 supplements sold under the "Revly" label.
23

70.

These two components, vendor-retailer and private label, make up Amazon's

24 first-pa11y retail business unit, which Amazon refers to collectively as Amazon "Retail."
COMPLAINT-19
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 24 of 172

1

71.

Amazon also runs what it calls its "Marketplace," where other companies can sell

2 products directly to shoppers through its online store. Amazon calls third-party companies that
3 sell on Amazon "sellers," and refers to sales by sellers as "Marketplace" sales.
4

72.

Amazon charges sellers four primruy fees to sell on its Marketplace. First,

5 Amazon requires sellers to pay a selling fee, which can be a monthly fee or a fee for each item
6 sold. Second, Amazon charges all sellers a commission or "refe1Tal fee" based on the price of
7 each item sold on Amazon. Third, Amazon chru·ges sellers for the use of Amazon' s fulfillment
8 and delivery services. Fomth, Amazon chru·ges sellers for advertising se1vices. While Amazon
9 also charges sellers other fees, these four types constitute over ■% of the revenue Amazon takes
10 in from sellers. As a practical matter, most sellers must pay these four fees to make a significant
11 volume of sales on Amazon.
12

73.

Amazon estimated that in 2022, it would take -

% of all sales revenue eruned

13 by sellers who use its fulfillment se1vice.
14

74.

The Marketplace accelerated Amazon's growth by allowing it to exponentially

15 expand the selection of products on Amazon without having to cany the risks of unsold
16 invent01y. Sellers, who range from small businesses that offer a single product to multinational
17 firms that sell thousands of products, ultimately bear that risk. As of the first quruter of 2021 ,
18 there were over 19

75.

active sellers on Amazon's U.S. Marketplace.

Amazon touts to its investors that sellers on the Marketplace are "a key

20 contributor to the selection offered" to Amazon shoppers. Sellers offer a huge variety of items
21 for sale, from laptop computers to harnesses for walking pet chickens, complete with bowtie. In
22 2020, sellers offered more than ■% of the unique items available for sale on Amazon. Sellers'
23 products make up a growing majority of Amazon unit sales- 60% in the second quruter of 2023,
24 up from 55% in 2021.
COMPLAINT - 20
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 25 of 172

1

76.

Amazon's online superstore unites its Retail and Marketplace rums, with products

2 inte1mixed and presented to the public simultru1eously and side-by-side. To a shopper browsing
3 on Amazon, there ru·e no obvious differences between the types of listings, nor is there a way to
4 regulru-Iy shop for products sold only by Amazon Retail or Amazon Mru·ketplace.
5

77.

6

were sold through Amazon's U.S. online store. That amount is larger than the 2021 gross

Amazon has achieved unprecedented scale. In 202 1, goods w011h more than -

7 domestic product of8

78.

countries.

Amazon achieved this astonishing scale in prut by combining its Retail and

9 Marketplace anns. Amazon's product selection includes populru· and frequently pm-chased items
10 and a "long tail" made up of an illllllense vru·iety of less-frequently purchased products. Products
11 offered by sellers on Amazon' s Mru·ketplace contribute substantially to that "long tail." More
12 generally, Amazon's sellers dramatically increase Amazon's product selection, which draws
13 more shoppers to Amazon, which, in tum, attracts more sellers.
14

79.

Sellers have also made the Mru·ketplace eno1mously profitable for Amazon.

15 Amazon's internal documents show that profits from its U.S. Marketplace totaled more than 16

in 2021-neru·ly ■o/o of its total repo1ted net income for that year.

17

B.

Amazon's Online Superstore

18

80.

Shoppers typically reach Amazon using an internet browser or a dedicated

19 Amazon shopping application ("mobile app") on an internet-connected device. Each month in
20 the United States, 126 million people visit Amazon on a mobile device, and more than 42 million
2 1 people access Amazon on a desktop computer.
22

81.

There ru·e more than

different products available for sale on Amazon. To

23 navigate this- - product catalog, Amazon offers a seru-d1 bar. -when shoppers enter a
24 search, Amazon's systems generate a "Seru·ch Results Page" that displays product listings
COMPLAINT - 21
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 26 of 172

1 interspersed with advertisements (discussed in more detail in the next section). Product listings
2 on the Search Results Page typically show a name, picture, price, star rating, shipping speed
3 estimate, and Prime status (or lack thereof) for each item, as shown in Figures 3a (desktop) and
4 3b (mobile).
5
6
7
8
9
10
11
12
13
14
15

Figure 3a. Amazon Search Results Page, Desktop Browser.

16
17
18
19
20
21
22
23
24
COMPLAINT - 22
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 27 of 172

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Figure 3b. Amazon Search Results Page, Mobile App.
82.

If shoppers want to learn more about or purchase an item displayed on the Search

16 Results Page, they must click the product listing, which brings them to the “Detail Page” for that
17 item. An item’s Detail Page typically includes a detailed product description, additional pictures,
18 product dimensions or specifications, and customer-generated ratings and reviews.
19

83.

Importantly, the Detail Page usually includes a “Buy Box.” The Buy Box

20 displays a single offer for that specific item, as shown in Figures 4a (desktop) and 4b (mobile).
21 Shoppers can use the Buy Box to add the displayed item into their online shopping cart (“Add to
22 Cart”) or buy the item immediately (“Buy Now”).
23
24
COMPLAINT - 23
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 28 of 172

1
2
3
4
5
6
7
8
9
10
11

Figure 4a. Product Detail Page with Buy Box Enlarged in Red, Desktop Browser.

12
13
14
15
16
17
18
19
20
21
22
23

Figure 4b. Product Detail Page with Buy Box Enlarged in Red, Mobile App.
84.

An item may be offered by more than one seller on Amazon. When there are

24 multiple offers for a single item, Amazon uses the “Featured Merchant Algorithm” to choose one
COMPLAINT - 24
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 29 of 172

1 offer to display in the Buy Box. Amazon calls this displayed offer the "Featured Offer. " Being
2 chosen as the Featmed Offer is commonly known as "winning" the Buy Box.
Nearly ■%

85.

3

of all purchases on Amazon are made using the "Add to Crut" and

4 "Buy Now" buttons in the Buy Box. As a result, winning the Buy Box is essential to making
5 sales on Amazon.
86.

6

Amazon deliberately steers shoppers away from offers that are not featured in the

7 Buy Box. If a shopper using a computer wants to see an offer from a seller that is not featured in
8 the Buy Box, the shopper must either click a link that identifies only the number of additional
9 offers, which takes the shopper to the "All Offer Display," as shown in Figure 5a, or scroll down
10 the page to see "Other Sellers on Amazon," which includes a list of additional sellers Amazon
11 has selected. Shoppers using Amazon's mobile app must click on a link labeled "Other Sellers
12 on Amazon" to access the All Offer Display, which opens another page that displays multiple
13 offers, as shown in Figure 5b.
14

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Figure 5a. All Offer Display, Desktop Browser.
COMPLAINT - 25
CASE NO. _:_-cv- _ _

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 30 of 172

1
2
3
4
5
6
7
8
9
10
11
12
13
14

Figure 5b. All Offer Display After Clicking “Other Sellers On Amazon,” Mobile App.
87.

Amazon makes it similarly difficult for shoppers to make a purchase when

15 Amazon has removed the Buy Box from an item’s Detail Page. Amazon’s page layout prevents
16 shoppers from adding to a shopping cart or buying any offers directly from the Detail Page, as
17 shown in Figure 6a.
18
19
20
21
22
23
24
COMPLAINT - 26
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 31 of 172

1
2
3
4
5
6
7
8
9

Figure 6a. Detail Page Without Buy Box with “See All Buying Options” Link Enlarged in Red,

10

Desktop Browser.

11
12
13
14
15
16
17
18
19
20

Figure 6b. Detail Page Without Buy Box with “See All Buying Options” Link Enlarged in Red,

21

Mobile App.

22

88.

If there is no Buy Box for an item, then shoppers must navigate to the “All Offer

23 Display” by clicking on a link labeled “See All Buying Options,” shown in Figures 6a (desktop)
24 and 6b (mobile), above.
COMPLAINT - 27
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 32 of 172

89.

Fewer than 1 % of pm-chases on Amazon are made from offers outside the Buy

3

C.

Amazon's Advertising Services

4

90.

In 2014, Amazon sought to "unleash monetization of Amazon web pages,

1
2 Box.

5 devices, and mobile apps"
6

Accordingly, Amazon

7
8
9

11

12
13

91.

In 2021, Amazon recorded adve1tising profits of more than I

14 United States.
15

92.

Each month, adve1tisements on Amazon reach 96% of all Americans between the

16 ages of 25 and 54.
17

93.

Amazon's- - advertisements are shown in connection with specific

18 customer search queries that lead to Seai·ch Results Pages. Historically, Amazon's Search
19 Results Pages displayed mostly organic search results-the results most directly responsive to
20 the search que1y .
21

94.

Today, however, Amazon's Search Results Pages are cluttered with

22 adve1tisements. The

types of advertisements on Amazon' s Seai·ch Results

23 Pages are "Sponsored Brand" adve1t isements, which appeai· above seai·ch results, and
24 "Sponsored Product" adve1tisements, which appeai· within sea1-d1 results, as shown in Figure 7.
COMPLAINT - 28
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 33 of 172

1

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11

Figure 7. Search Results Page with Sponsored Brand and Sponsored Product Advertisements

12

Highlighted in Red, Desktop Browser.

13

95.

These adve1iisements typically occupy the most desirable space on the Search
Since ■ %

14 Results Page

of Amazon shoppers do not

15 click past the first Search Results Page, they often see more Sponsored Brand and Sponsored
16 Product advertisements than organic search results.
17

96.

At the same time, Amazon typically buries organic search results beneath

18 adve1iisements, making them harder to find and less likely to be clicked. In Figure 8a (desktop),
19 no organic search results appear in the fu-st row. The first four results are "Sponsored"
20 adve1tisements, and the fifth is another non-organic result known as a "recoIIllllendation widget."
21 In Figure 8b (mobile), the top two results ru·e "Sponsored" adve1iisements, and the third is a
22 recoIIllllendation widget.
23
24
COMPLAINT - 29
CASE NO. - :- - CV-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 34 of 172

1
2
3
4
5
6
7
8
9

Figure 8a. First Row of Search Results with Sponsored Product Advertisements Highlighted in

10

Red, Desktop Browser.

11
12
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 30
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 35 of 172

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

Figure 8b. Search Results Page with Sponsored Product Advertisements Highlighted in Red,

24

Mobile App.
COMPLAINT - 31
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 36 of 172

1

97.

For shoppers on mobile devices, Sponsored Brand and Sponsored Product

2 advertisements are often the only results visible without scrolling, as shown in Figure 8c.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Figure 8c. Search Results Page Showing Visible Screen, Mobile App.

18
19

D.

Amazon Prime

20

98.

Amazon runs a subscription program called Amazon Prime. Amazon launched

21 Prime in 2005 as a shipping subscription. For an annual fee of $79, subscribers bought unlimited
22 shipping on eligible items, at no per-order cost to shoppers. Amazon today continues to include
23 a shipping service as part of Prime, with an unlimited two-day shipping promise on eligible items
24 at no per-order cost.
COMPLAINT - 32
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 37 of 172

99.

1

Over time, Amazon has expanded Prime from a shipping program to a

2 subscription that is, in Amazon's internal assessment,
It includes a broad combination of products and

3

4 services, including many that are unrelated to online retail shopping, such as: (1) Prime Video, a
5 video-on-demand and streaming se1vice; (2) Amazon Music Prime, an ad-free music streaming
6 se1vice; (3) Prime Gaming, a video gaming se1vice that includes downloadable games, exclusive
7 in-game content, and channel subscriptions and badges 0 11 Twitch, a livestreaming se1vice
8 Amazon acquired for nearly $1 billion in 2014; and (4) RxPass, which provides access to a list of
9 eligible prescription medications, including shipping, for a flat $5 per month fee. Prime
10 subscribers also receive access to exclusive online shopping discounts and promotions such as
11 "Prime Day," a highly publicized annual promotion with exclusive deals for Prime subscribers.
100.

12

Amazon has increased the subscription fee for Prime from the original $79 to

13 nearly double that price, at $139 per year, with a monthly subscription priced at $14.99.
14

101.

Amazon charges a Prime subscription fee primarily to
As Amazon puts it,

15

The Prime subscription fee makes subscribers feel as though they must

16

17 make the subscription fee w01th it by making more purchases on Amazon. A former Amazon
18 employee who was involved in the development of Prime explained that Prime pricing "was
19 never really about the seventy-nine dollars. It was really about changing people's mentality so
20 they wouldn't shop anywhere else."
102.

21

According to Amazon's internal analyses,

24 spends
COMPLAINT - 33
CASE NO. _:_-cv- _ _

each year on Amazon than the average non-Prime Amazon shopper.
FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 38 of 172

1 Conversely, consumers who are not Prime subscribers are

4

As shown in Figures 9a (desktop) and 9b (mobile), Amazon displays a "Prime

103.

5 Badge" to show Prime subscribers which items are eligible for the prepaid unlimited shipping
6 included in the Prime subscription.
7

_

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Figure 9a. Search Results Page with Prime Badges Highlighted in Red, Desktop Browser.

18
19
20
21
22
23
24
COMPLAINT - 34
CASE NO. - .- -cv-- - -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 39 of 172

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

Figure 9b. Search Results Page with Prime Badges Highlighted in Red, Mobile App.
COMPLAINT - 35
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 40 of 172

1

104.

Amazon’s interfaces let Prime subscribers filter their searches to display only

2 Prime-eligible offers. On the top left-hand side of Amazon’s desktop webpage and mobile app,
3 Amazon displays a “Prime” filter. Once a shopper selects the filter, only Prime-eligible offers
4 appear in search results, as shown in Figures 10a (desktop) and 10b (mobile).
5
6
7
8
9
10
11
12

Figure 10a. Search Results Page with Prime Filter Enlarged in Red, Desktop Browser.

13
14
15
16
17
18
19
20
21
22

Figure 10b. Search Results Page with Prime Filter Enlarged in Red, Mobile App.

23

105.

For Amazon, signing up and maintaining as many Prime subscribers as possible is

24 a top priority. In service of this goal, Amazon has even knowingly tricked shoppers into signing
COMPLAINT - 36
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 41 of 172

1 up for Prime and actively thwarted their efforts to cancel their subscriptions. Amazon internally
for its user inte1faces "to mislead or trick users to make

2 admits to using

3 them do something they didn't want to do, like signing up for arecmTing bill,I
At multiple points, Amazon considered

4

5
6

Amazon constmcted a cancellation process so lengthy, arduous,

7

8 and complex that it was internally codenamed the "Iliad Flow," after Homer's 15,693-line epic
9 poem.
106.

As oflate 2021, nearly!

I people in the United States~

% of U.S.

11 households- were emolled in Prime. In some zip codes, more than ■ % of households have a
12 Prime subscriber. Amazon's U.S. Prime subscriber base is larger than the populations of13
14

Amazon projects that by 2024, ■ % of all U.S. households
and that Prime emollment will be

15
16
17
18
19
20
21
22
23
24

Figure 11. Source: Amazon Internal Documents.
COMPLAINT - 37
CASE NO. _:_ -cv-_ _

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 42 of 172

1

107.

In 2021, Prime subscriber purchases accounted for more than ■ % of the

2 purchases by dollar amount on Amazon's U.S. online superstore. And in 2021 alone, U.S.
3 customers paid Amazon more than I

I in Prime subscription fees.

4

E.

Fulfillment By Amazon

5

108.

Amazon sells fulfillment se1vices and facilitates delive1y under the name

6 "Fulfillment by Amazon," which is commonly abbreviated to "FBA." Sellers can use FBA to
7 fulfill orders made on Amazon.
8

109.

"Fulfillment" refers to the process of preparing items for shipping to "fulfill"

9 online orders. Fulfillment involves storing, picking (retrieving from storage), packaging, and
10 preparing items purchased from online retail stores for delive1y. Fulfillment operations generally
11 occur within a specialized warehouse called a "fulfillment center."
12

110.

For most online sellers, fulfillment is a significant business cost.

13

111.

Delive1y is a related but distinct se1vice. "Delive1y" refers to the specific process

14 of transporting a package from a fulfillment center to a customer's chosen address. One
15 company may fulfill an order, then transfer the package to a different company for delive1y. For
16 example, a fulfillment provider may hand a package off to a parcel canier like the U.S. Postal
17 Se1vice, FedEx, or UPS, to complete delivery.
18

112.

Amazon both fulfills and delivers products purchased on its online superstore. In

19 2021, Amazon fulfilled nearly ■ % of all orders made on Amazon across both its Marketplace
20 and Retail business units. Amazon delivers products itself or contracts with a third-party
21 delive1y company to do so. Amazon has estimated that it now makes more deliveries in the
22 United States than any other company.
23

113.

When online shoppers buy an item, they also expect fulfillment and delivery of

24 that item.
COMPLAINT - 38
CASE NO. - :- -cv--

-

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 43 of 172

114.

1

When a seller uses FBA, Amazon charges the seller for storing their items and

2 charges the seller a fee based on the dimensions and weight of the product when it is purchased.
115.

3

Amazon has increased the fulfillment fees it charges to sellers by approximately

4 30% in just two years, from 2020 to 2022.
116.

5

As explained in Part VI.B, below, sellers have little choice but to use FBA. In

6 2020, more than-

sellers used FBA to fulfill more than~

orders in the United

7 States.
8 V.

AMAZON POSSESSES MONOPOLY POWER IN TWO RELEVANT MARKETS

9

117.

Strnctural and direct evidence show that Amazon has monopoly power in two

10 markets: (1) the online superstore market and (2) the market for online marketplace services
11 (together, the "relevant markets").
12

118.

The strnctural evidence of monopoly power in both markets includes Amazon's

13 dominant market shares and the presence of significant baniers to entty, including powerful
14 network effects and strong economies of scale. These markets and their individual bru.Tiers to
15 ent1y are discussed further in Parts V.A and V.B, below.
16

119.

Feedback loops between the two relevant markets further demonstrate the critical

17 impo1iance of scale and network effects in these markets. While the markets for online
18 superstores and online mru.-ketplace services are distinct, an online superstore may operate an
19 online marketplace and offer associated online marketplace services to sellers. As a result, the
20 relationship and feedback loops between the two relevant markets can create powerful baITiers to
21

entty in both markets. Amazon offers an illustration of this dynamic: Amazon's base of

22 shoppers in the online superstore market attracts sellers to buy se1vices from Amazon in the
23 online marketplace se1vices market. Amazon in tum relies on those sellers to increase the
24 breadth and depth of goods offered on Amazon's online superstore, which fuiiher draws
COMPLAINT - 39
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 44 of 172

1 shoppers to Amazon. fu addition, Amazon imposes restrictions on how shoppers can purchase
2 its Prime subscription program to artificially increase barriers to entry in the online superstore
3 and online marketplace services markets. These scale and network effects reinforce Amazon's
4 monopoly power in both relevant markets, as explained in Pait V.C, below.
5

120.

Direct evidence also demonsn·ates Amazon's monopoly power. Amazon has

6 continually exercised its monopoly power and degraded the customer experience-7
Amazon worsens quality and hikes prices for both shoppers and

8

9 sellers, all without denting-and while in fact expanding- its dominance. This and other direct
10 evidence of Amazon's monopoly power are discussed fm1:her in Pali V.D, below.
11

A.

Amazon Has Durable Monopoly Power In The Online Superstore Market

12

121.

Amazon has durable monopoly power in the online superstore market.
1.

13
14

122.

The U.S. online superstore market is a relevant market

The online superstore market is a relevant product market. Online superstores

15 compete to build long-te1m relationships with consumers across multiple purchases of a variety
16 of items. Online superstores do so by offering a distinct set of featmes that reduce time ai1d
17 effo1t for shoppers online, thereby encouraging shoppers to return to those online superstores for
18 a broad swath of goods. Because of these and other features, brick-and-mortai· stores and online
19 stores with a more limited selection are not reasonably interchangeable with online superstores
20 for the same purposes and are thus properly excluded from the online superstore market.
21

123.

The relevant geographic market is the United States.
a.

22
23

124.

Online superstores offer shoppers a unique set offeatures

An online superstore offers an extensive breadth and depth of product selection

24 accessible through an online storefront. "Breadth" refers to product offerings across multiple
COMPLAINT - 40
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 45 of 172

1 categories, such as sporting goods, kitchen goods, apparel, and consumer electronics. “Depth”
2 refers to product selection within a given product category, such as a range of different brands of
3 a product with different price points, levels of quality, sizes, and colors.
4

125.

Consumers incur shopping costs beyond the prices paid for purchased items. For

5 example, when considering a purchase, shoppers must determine which stores carry specific
6 items. Shoppers then often conduct research, including learning about the items’ prices and
7 features, reading consumer reviews, and comparing similar items. Shoppers value stores that
8 reduce search costs and the ability to discover new items that they may not have been initially
9 searching for while shopping. Many consumers also value shopping for different types of goods
10 at a single store to reduce overall shopping costs.
11

126.

Online superstores provide shoppers a unique offering: 24/7 access to a broad and

12 deep product selection accompanied by a distinct set of features that meaningfully reduce the
13 time and effort shoppers expend online. These features include tools to help shoppers quickly
14 search for and identify their desired items, compare different items, and purchase and receive
15 items, all from a single website or app. Online superstores provide these features to develop
16 long-term relationships with shoppers, entice shoppers to buy more products during a single
17 shopping trip, and encourage them to come back again.
18

127.

Several characteristics distinguish online superstores from other forms of retail,

19 including brick-and-mortar stores and online stores with comparatively limited selection.
20

128.

First, online superstores offer a single destination for shoppers to browse a large

21 and diverse selection of goods from multiple brands across a wide range of categories, reducing
22 consumers’ shopping costs and encouraging customers to make an online superstore a preferred
23 destination for a variety of shopping needs.
24
COMPLAINT - 41
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 46 of 172

129.

1

By offering a broad selection, online superstores reduce the shopping costs of

2 visiting multiple stores for goods spanning multiple categories. By offering a deep selection
3 within any given category, online superstores decrease the shopping costs of visiting multiple
4 category-specific or brand-specific stores to identify the best options.
130.

5

The breadth and depth of selection available at online superstores encourages

6 shoppers to return to and shop at those stores more regularly. Shopping regularly at the same
7 online superstore leads to reduced shopping costs by increasing shoppers’ familiarity with an
8 online superstore’s format, features, offerings, and customer service process. Repeated use of an
9 online superstore can also provide confidence about its reputation and quality. Increased
10 familiarity, a positive reputation, and perceived high quality all make it more likely that a
11 shopper will choose an online superstore as a preferred destination for purchasing retail goods
12 online.
13

131.

Industry participants, including Amazon, have long recognized an online

14 superstore’s unique ability to leverage a broad and deep selection of goods to compete for repeat
15 customers. For example, Mr. Bezos explained in his 1999 letter to Amazon shareholders that
16 “[e]ach new product and service we offer makes us more relevant to a wider group of customers
17 and can increase the frequency with which they visit our store. . . . The more frequently
18 customers visit our store, the less time, energy, and marketing investment is required to get them
19 to come back again.”
20

132.

Second, online superstores are not limited to traditional operating hours that

21 constrain brick-and-mortar retailers. Instead, online superstores offer a quick, on-demand
22 shopping experience at all times of the day or night. Online superstores allow shoppers to
23 browse and buy across a wide variety of goods 24 hours a day, 7 days a week, 365 days a year.
24 Shoppers can also pause and resume their shopping session on an online superstore at any time.
COMPLAINT - 42
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 47 of 172

1

133.

Third, shoppers can make purchases on online superstores anywhere they have

2 internet access, through a website or an app on a desktop, tablet, or smaii phone.
3

134.

Fomih, online superstores offer sophisticated filtering and discove1y tools,

4 allowing shoppers to browse and sift through the store's entire catalog quickly and efficiently.
5

135.

Online superstores also have access to data on items consumers have previously

6 searched for and purchased. Online superstores may use this data to offer repeat visitors tailored
7 ai1d personalized shopping experiences that can, for example, include recommendations for
8 future purchases based on past search or purchase behavior.
9

136.

Fifth, online superstores offer research tools, including detailed info1mation on a

10 given item and a large volume of authentic, customer-generated ratings and reviews. Online
11 superstores give shoppers a single point of access to these research tools, including text
12 descriptions, photos, videos, and user reviews. The product detail pages available on online
13 superstores often include far more infonnation than physical packaging can accommodate. For
14 example, a product detail page can include links to user guides and product documentation that
15 would othe1wise only be accessible inside of a product's packaging.
16

13 7.

Sixth, online superstores provide shoppers a fainiliar and convenient checkout

17 experience. Online superstores reduce shopping costs by allowing customers to store personal
18 information like payment details, home addresses, passwords, and other sensitive infonnation.
19 For example, Mr. Bezos
20
21
22

138.

Seventh, online superstores offer shoppers a convenient and consolidated post-

23 purchase experience. Shoppers who buy multiple items from an online superstore can often
24 schedule them to be delivered together, limiting the need to keep track of multiple delive1y times
COMPLAINT - 43
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FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 48 of 172

1 and decreasing packaging. Mr. Bezos
2

3

139.

This combination of features distinguishes online superstores from brick-and-

4 mortar stores and from other online stores with comparatively limited selection. Even though
5 such stores may price certain items comparably with online superstores, shoppers do not
6 seriously consider those stores as reasonable alternatives to online superstores for a significant
7 po1tion of their shopping needs. Online superstores differentiate themselves by offering a
8 pa1ticular shopping experience to the sizeable group of consumers who view that experience as
9 distinct and prefer to shop at online superstores.
b.

brick-and-mortar stores

11

12

Online superstores are not reasonably interchangeable witlt

140.

Online superstores are distinct from, and not reasonably interchangeable with,

13 brick-and-mortar stores. From start to finish, online superstores provide a vastly different
14 shopping experience from physical stores.
15

141.

Unlike online superstores, brick-and-mo1tar stores require shoppers to travel to a

16 specific location. As Mr. Bezos noted in his 2020 letter to Amazon shareholders, "[r]esearch
17 suggests the typical physical store trip takes about an hour" and requires "driving, parking,
18 searching store aisles, waiting in the checkout line, finding your car, and driving home." Mr.
19 Bezos contrasted this experience with shopping on Amazon, where more than a qmuter of all
20 purchases are completed "in three minutes or less," and half of all pm-chases take less than
21 fifteen minutes.
22

142.

Brick-and-mortar stores can display only items that fit on the store 's limited

23 physical shelf space, while online superstores can offer a practically unlimited number of items
24 for sale. As Amazon's then-Vice President of Physical Stores explained in 2018, "whenever you
COMPLAINT - 44
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[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 49 of 172

1 are working offline, you can't have the endless aisle that you have online, and so when you're
2 working offline you really have to curate."
3

143.

Amazon recognizes that its unlimited shelf space appeals to shoppers and

4 distinguishes its online store from brick-and-mortar stores. As Amazon has reminded its

5 shai·eholders eve1y year since 1998, "[w]e brought [shoppers] much more selection than was
6 possible in a physical store ... and presented it in a useful, easy-to-search, and easy-to-browse

7 fonnat in a store open 365 days a year, 24 hours a day."
8

144.

Amazon internally contrasts the benefits of the depth of selection available in its

9 online superstore with the "cleai· gaps" in selection at physical stores. As shown in Figure 12

10 below, an Amazon presentation
11

12
13

14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 45
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Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 50 of 172

13

Figure 12. Amazon Slide

14
15

Source: Amazon Internal Documents.
145.

Brick-and-mortar stores also cannot tailor or personalize a consumer's shopping

16 experience in the same way an online superstore can. Physical stores have the same layout for
17 any shopper browsing their selection at any given time.
18

146.

The process of searching and shopping for items at brick-and-mo1tar stores is

19 much different than the process of searching and shopping on an online superstore. Shoppers on
20 online superstores can use sophisticated digital filtering and search tools to browse and select
2 1 items, instead of physically traveling up and down aisles or asking a store employee for help.
22 Online superstore shoppers can make purchases without waiting in physical checkout lanes. And
23 online superstore purchases typically ship to the shopper's address. On the other hand, shoppers
24 can see products in person before buying at brick-and-m01tar stores and can typically take
COMPLAINT - 46
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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

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1 pm-chased items home immediately. As Amazon's then-Vice President of Physical Stores
2 explained in a 2018 interview, "another thing you can do in offline retail that you can't do online
3 is customers can come in and touch the products themselves ... tty those products first person,
4 get a feel for them, [and] talk to an associate."
5

147.

Online and brick-and-mo1iar stores also involve distinct operations. Because

6 different expe1iise is required to manage an online store, companies that operate both typically
7 mn them through separate divisions. For example,
8
Amazon's CEO, Andy Jassy, has publicly emphasized

9

10 that "[t]he things you think about in physical retail" from an operational perspective, like
11 "lighting," "parking," and "physical merchandising," are "radically different things than you
12 think about in an online retail environment where technology is really driving the entire
13 experience."
14

c.

Online superstores are not reasonably interchangeable with

15

other online stores that lack breadth and depth ofproduct

16

selection

17

148.

Online superstores are also distinct from, and not reasonably interchangeable

18 with, online stores with liinited product selection, including online stores that offer products
19 primai-ily from a single brand. Whether considered individually or collectively, online stores
20 with limited selection are not reasonable substitutes to become a shopper's prefened destination
21 for their online pm-chases for a broad swath of retail goods. Shopping at numerous liinited22 selection online stores increases shopping costs, both for individual shopping needs and in
23 aggregate across a customer's total purchases. Consumers' overall shopping costs would
24
COMPLAINT-47
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Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 52 of 172

1 increase dramatically if they tried to replace online superstores with shopping at multiple
2 limited-selection online stores.
3

149.

Some consumers may prefer to shop at limited-selection online stores for certain

4 items. For example, a consumer may turn to such an online store because it specializes in unique
5 or niche goods not available on an online superstore, because the shopper has particular brand
6 loyalty, because the shopper finds the online store particularly trustworthy and reliable (because,
7 for example, it screens for counterfeit goods or fake reviews), or because the non-superstore
8 offers specialized or expert knowledge about the items it sells.
9

150.

Limited-selection online stores do not provide an experience that is reasonably

10 interchangeable with an online superstore because, individually and collectively, they cannot
11 effectively compete to become a shopper’s preferred destination for online purchases given the
12 increased shopping costs associated with shopping at online stores that lack the breadth and
13 depth of online superstores.
14

151.

Online stores with a limited product selection lack breadth. A shopper who must

15 visit multiple online stores to compile a set of desired goods across different product categories
16 faces higher shopping costs than a shopper who can search for and complete those cross-category
17 purchases at a single online superstore.
18

152.

RainOrShineGolf.com—a retailer of indoor golf simulator equipment—is an

19 illustrative example of an online store that lacks the breadth of an online superstore. Golf
20 simulator equipment such as golf ball launch monitors, mats, nets for hitting balls, and software
21 to analyze performance collectively allow a customer to practice golf indoors. While Rain or
22 Shine Golf and Amazon both sell indoor golf simulator equipment, they offer consumers
23 different shopping experiences and a vastly different overall product due to the difference
24 between the breadth of product selection at each online store. Shoppers may choose Rain or
COMPLAINT - 48
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 53 of 172

1 Shine Golf for occasional category-specific purchases, but due to its limited breadth it could not
2 become a consumer’s preferred destination for a broad swath of other online purchases.
3

153.

Unlike limited-selection online stores, an online superstore offers a single

4 destination for a shopper to browse, buy, and return to for repeat purchases of a much wider
5 array of goods. On an online superstore like Amazon, shopping for a golf simulator may also
6 yield cross-category suggestions for accessories like golf gloves, golf clubs, or golf bag push
7 carts. Moreover, if the need arises or mood strikes, a consumer shopping on an online superstore
8 like Amazon could resupply the correct size of kitchen trash bags they previously purchased and
9 add a new board game that the online superstore recommends based on their prior shopping
10 behavior, all during a single shopping session. By contrast, a consumer who uses Rain or Shine
11 Golf to buy a golf simulator but would also like to make a set of additional purchases would need
12 to visit and do business with numerous other online stores. Those visits would incur the added
13 shopping costs of finding those additional items, completing the various purchase processes with
14 different logins and credentials (if the shopper can remember them), and arranging for multiple
15 deliveries.
16

154.

Many online stores that lack breadth of product selection also lack depth,

17 especially online stores that primarily or exclusively feature their own brands. A shopper forced
18 to visit multiple online stores to find the specific item that matches their needs faces higher
19 shopping costs than a shopper who can compare across a depth of options for that item on an
20 online superstore.
21

155.

Tumi.com is another illustrative example. Shoppers can purchase a range of

22 luggage, backpacks, and bags at Tumi.com, but the items sold at Tumi.com are primarily Tumi’s
23 own brand, limiting the depth of options for any particular item. By contrast, a shopper looking
24 for luggage on an online superstore like Amazon can browse across options from a wide variety
COMPLAINT - 49
CASE NO. _:__-cv-_____

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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 54 of 172

1 of brands that may include Tumi as well as other brands. The shopper can pernse these options
2 by filtering across featmes like brand, price point, size, and colors without incmTing the
3 additional seai-ch costs present in vi.siting all of the online stores operated by each brand.
4

156.

Furthe1more, the breadth and depth of product selection on online superstores

5 increases access to valuable cross-catego1y consumer data. This data amplifies the ability of
6 online superstores to provide shoppers with tailored and personalized shopping experiences. As
7 an online superstore, for example, Amazon recognizes in internal documents that

157.

11

These additional capabilities of online superstores influence consumers' shopping

12 behavior.
13
158.

14

Because limited-selection online stores do not have the same breadth and depth of

15 selection offered by online superstores, they have access to less consumer data: across categories
16 and cannot replicate the personalization fea:tmes of online superstores, reducing the ability of
17 limited-selection online stores to compete with online superstores.
159.

18

Online superstores treat rival online superstores differently than limited-selection

19 stores. For example, Amazon does not allow other online superstores like Walma1t.com to sell
20 through Amazon. Yet Amazon encomages hundreds of thousands of sellers-including well21

known brands that sell through their own online stores or limited-selection online stores- to do

22 so.
23
24
COMPLAINT - 50
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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 55 of 172

d.

1

the online superstore market

2
3

The online perishable grocery category is properly excluded from

160.

Online purchases of perishable grocery products are not part of the online

4 superstore market. Perishable groceries are foods that cannot be safely stored at room
5 temperature, including fresh fruits and vegetables, raw meat, and frozen items. Though some
6 online superstores may also offer online purchases of perishable grocery products, this distinct
7 business line is not part of the relevant market and is excluded from the market share numbers in
8 Part V.A.2, below.
9

161.

Consumers’ experiences when shopping online for perishable groceries differ

10 from their experiences purchasing other retail goods. For example, consumers shopping for
11 online perishable grocery products typically must select a specific time for the perishable grocery
12 products to be delivered, which often also requires the customer to be present at the time of
13 delivery to be able to promptly store those items. Both Walmart.com’s and Amazon’s online
14 perishable grocery businesses require shoppers to choose a delivery window or “time slot.”
15 Neither Walmart.com nor Amazon typically require shoppers to choose time slots when
16 purchasing other products online.
17

162.

The process for packaging and delivering perishable groceries to shoppers who

18 ordered them online also differs from non-perishable grocery orders. Perishable groceries
19 require special handling, often including refrigeration or freezing, as well as quick and careful
20 delivery to avoid damage or rot. As such, perishable grocery delivery requires specialized
21 storage facilities with refrigeration systems that serve a smaller geographic footprint.
22

163.

Competition for online perishable grocery sales is also different from competition

23 between online superstores. Competition for online perishable grocery sales is generally more
24 localized, whereas online superstore competition is nationwide. This difference is because
COMPLAINT - 51
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Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 56 of 172

1 groce1y quality and shelf life are seasonal and regional. For example, perishable frnit may be
2 available only dming certain times and in certain regions. As a result, Amazon- 3
4

e.

5
6

164.

The relevant geographic market is the United States

The United States is the relevant geographic market for the online superstore

7 market. Online superstores that serve consumers shopping for items to be delivered within the
8 United States generally do not compete for those consumers with online superstores that
9 prima1·ily serve consumers shopping for items to be delivered outside of the United States.
10 Consumers shopping online for items to be delivered within the United States generally make
11 pm-chases from market paiticipants' U.S. businesses and U.S.-facing online stores. For example,
12 Amazon operates an online storefront for shoppers in the United States (Amazon.com) separately
13 from its storefront for shoppers in the United Kingdom (Amazon.co.uk). The difference is not
14 ·ust in their URLs; rather, despite being in the same language, they offer different products, at
15 different prices, under different shipping te1ms, and present unique search results and
16 adve1tisements.
17

165.

Online superstores that primarily se1ve shoppers seeking delive1y outside the

18 United States are not reasonable substitutes for shoppers seeking delive1y within the United
19 States because they offer a shopping experience tailored to those other countries, with different
20 cmTencies, prices, customs and border control conditions, and shipping te1ms. In the ordinaiy
21

comse of business, indust1y paiticipants identify competitors for U.S. shoppers separately from

22 competitors that se1ve shoppers seeking items to be delivered to other countries.
23
24
COMPLAINT - 52
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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 57 of 172

2.

1
166.

2

Amazon has a dominant share of the online superstore market

Amazon maintains a dominant market share when compared to other online

3 superstores. Documents and data, both from Amazon and industry analysts, confirm that
4 Amazon’s share of the overall value of goods sold by online superstores is well above 60%—and
5 rising.
6

167.

Amazon’s market share, when considered in conjunction with other

7 characteristics of the online superstore market including its significant barriers to entry (see Parts
8 V.A.3 and V.C, below), demonstrates Amazon’s monopoly power.
9

168.

Gross Merchandise Value (“GMV”) measures the total sales value of goods sold

10 to customers during a given time period and is commonly used to track the market share of
11 online stores. Other financial indicators, such as revenue or net sales, may factor in commission
12 fees or discounts that can vary both within a single store and across different stores. GMV does
13 not. Accordingly, a calculation of Amazon’s GMV captures the total value of goods sold
14 through both its Retail and Marketplace arms. Third-party reports, including those utilized by
15 Amazon, regularly use GMV to compare Amazon to other firms.
16

169.

When measured by GMV, Amazon’s business vastly overshadows that of all

17 other online stores in the United States.
18

170.

Industry analysts and industry participants often track Amazon’s U.S. online store

19 by reference to Walmart, Target, and eBay. According to third-party reports that assess market
20 share across these “top-4 general merchandise platforms,” Amazon has maintained an estimated
21 market share of more than 69% of GMV since 2015, with that share growing over time.
22
23
24
COMPLAINT - 53
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1
2
3
4
5
6
7
8
9
10

Figure 13. Bank of America Global Research.
171.

Other commercially available data, including recently reported statistics from

11 eMarketer Insider Intelligence, a widely cited industry market research firm, confirms Amazon’s
12 sustained dominance across this same set of companies, with an estimated market share of more
13 than 82% of GMV in 2022.
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 54
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Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 59 of 172

1

Share of U.S. eCommerce GMV among Amazon, eBay,
Walma1t, and Target

2

1.5_%
3.8%

1.7_%
4.6%

J .9%

3.2%

3.2%

3.1%

1.5_%

5.3%

6.3%

6.4%

6.7"

19.8%

17.2%

13.2%

10.6%

10.8%

9.5%

8.1%

3

2.9%

4

5

Target
Walmart

6

eBay
■

7

Amazon

8
9
2016

11

12

2017

2018

2019

2020

2021

2022E

Figure 14. Source: eMarketer Insider Intelligence (percentages rounded).

172.

Amazon internally maintains

13
14
15
16
17
Amazon had a-

18

% market share

19 based on U.S. GMV among this set of online stores in 2021.
20

173.

Amazon also

21
22

23
24
COMPLAINT - 55
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Washington, DC 20580
[phone]

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1
2
3
4

5
6

174.

Amazon considers

7
8

9

11

12
Amazon still had a -

13

% share based on U.S. eCollllllerce GMV (excluding

14 online perishable groce1y sales) among this set of online stores in 2021.

3.

15

protected by significant barriers to entry

16
17

Amazon's dominant position in the online superstore market is

176.

Significant barriers limit entiy into the online superstore market including scale

18 economies and network effects, reputational barriers, and shopper switching costs. Feedback
19 loops between online superstores and the online marketplace services market also confribute to a
20 unique barrier to entry, as discussed in Part V.C, below.
21

177.

Scale is a critical factor for success in the online superstore market. Amazon

22 itself has touted its scale as a key differentiator from medium-sized or single-categmy online
23 stores. Mr. Bezos wrote that "[o]nline selling (relative to traditional retailing) is a scale business
24 characterized by high fixed costs and relatively low variable costs. This makes it difficult to be a
COMPLAINT - 56
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FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 61 of 172

1 medium-sized e-commerce company,” and “difficult . . . for single-category e-commerce
2 companies to achieve the scale necessary to succeed.” According to Mr. Bezos, “build[ing] an
3 important and lasting company . . . in e-commerce” simply “isn’t going to work in small
4 volumes.” Economies of scale are a barrier to entry in this market that new firms must overcome
5 in order to enter and compete.
6

178.

The online superstore market is also characterized by network effects, where the

7 value of the service increases as more people use it. Network effects are not intrinsically
8 harmful, but they can present barriers to entry and to competition, reinforcing market power and
9 insulating incumbents.
10

179.

One aspect of the importance of scale and related network effects in the online

11 superstore market stems from user-generated reviews. For example, as Amazon’s shopper base
12 has grown, so too has the number of product ratings and reviews available on its store, a
13 feedback loop that further draws in new shoppers by enabling them to quickly learn more about
14 unfamiliar products or sellers. In other words, by leaving helpful ratings and reviews, Amazon’s
15 shoppers themselves provide immense value to future Amazon shoppers. Amazon benefits from
16 this self-reinforcing dynamic, which would be difficult and expensive for new entrants to
17 reproduce.
18

180.

Another source of network effects in the online superstore market is access to

19 valuable shopper data, which allows online superstores to tailor and personalize shopping
20 experiences. For example, Amazon records information about the items a shopper searches for,
21 views, places in their cart, and pays for, and the mechanism the shopper uses to pay. This type
22 of data allows an online superstore to streamline a shopping experience and target specific
23 products to certain customers. As with other network effects, the more scale an online superstore
24
COMPLAINT - 57
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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 62 of 172

1 gains, the more powerful this effect becomes. Prospective entrants would have to acquire a
2 sufficient shopper base to obtain enough data to offer this level of personalization.
3

181.

The online superstore market also exhibits reputational barriers to entry.

4 Reputational barriers to entry arise when entrants need to establish trust among customers to
5 compete meaningfully against incumbents. Because online superstores allow and encourage
6 repeat purchasing, they are able to develop positive reputations with shoppers that a prospective
7 entrant starting from scratch would need to cultivate.
8

182.

Switching costs also are a barrier to entry in the online superstore market.

9 Mr. Bezos recognized this dynamic and its implications in a speech in 1998, stating that
10 “switching costs long-term . . . should actually be higher in the online world than in the physical
11 world” because “[i]n the online world, businesses have the opportunity to develop very deep
12 relationships with customers, both through accepting preferences of customers and then
13 observing their purchase behavior over time, so that you can get that individualized knowledge
14 of the customer and use that individualized knowledge of the customer to accelerate their
15 discovery process.” For example, Amazon retains shoppers’ payment, shipping, and order
16 history information. Switching to a new online superstore would require reentering payment and
17 shipping information and forgoing the benefits of viewing past order history. Shoppers also
18 develop routines while shopping at online superstores that can be difficult to break, particularly
19 given the additional costs of gaining familiarity with the format, features, and policies of a
20 different store.
21

183.

Finally, as described in detail below in Part VI, Amazon engages in an illegal

22 course of conduct that raises barriers to entry and competition, making it artificially and
23 substantially more costly and time-consuming for would-be competitors to enter the online
24 superstore market.
COMPLAINT - 58
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600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

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1

B.

Amazon Has Durable Monopoly Power In The Online Marketplace Services
Market

2
3

184.

Amazon has durable monopoly power in the online marketplace services market.

4

185.

Online marketplace services include: (a) access to a significant base of shoppers

5 in the United States who use the online marketplace to find and buy goods; (b) an interface for
6 consumer search that allows sellers’ products to be discovered and purchased without shoppers
7 needing to leave the online marketplace; (c) the ability for sellers to set the prices for their goods
8 on the online marketplace; (d) the ability for sellers to create and maintain product detail pages
9 with product information and specifications on the online marketplace; and (e) the ability for
10 sellers to display to potential shoppers on the online marketplace an array of customer-generated
11 ratings and reviews.
1.

12
13

186.

Online marketplace services is a relevant market

Online marketplace services is a relevant product market. Online marketplaces

14 offer sellers a distinct set of services. Chief among these services is access to an established
15 online U.S. customer base. Purchasing online marketplace services is not reasonably
16 interchangeable with selling as a vendor to either an online or a brick-and-mortar retail store.
17 Nor are online marketplace services reasonably interchangeable with the offerings of online
18 software-as-a-service providers. Some providers of online marketplace services also offer
19 fulfillment services, which sellers can purchase in addition to online marketplace services.
20

187.

The relevant geographic market for online marketplace services, which provide

21 sellers access to U.S. shoppers, is worldwide.
a.

22
23

188.

Online marketplace services offer sellers a unique set of features

Online marketplace services encompass a suite of services that facilitate sellers

24 making online sales to U.S. shoppers without having to directly operate an online store. The
COMPLAINT - 59
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[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 64 of 172

1 sellers who typically purchase online marketplace services are businesses seeking to sell goods
2 directly to U.S. shoppers by relying on the marketplace to attract shoppers rather than attracting
3 shoppers solely on their own. These sellers use online marketplace services so that U.S.
4 shoppers can find and buy the sellers’ offered items.
5

189.

Access to a large customer base is the most important characteristic of an online

6 marketplace. Amazon advertises to prospective sellers that its marketplace allows them “to
7 reach the hundreds of millions of customers who visit Amazon to shop,” which can “[r]educe the
8 time, effort, and money [they] spend on customer acquisition.” Similarly, Walmart advertises
9 that its marketplace gives sellers access to “a built-in audience of frequent shoppers and loyal
10 customers” and tells sellers that “[y]ou bring great products. We bring millions of customers.”
11 eBay tells sellers that “millions of buyers are waiting.”
12

190.

Industry participants recognize online marketplace services as a distinct retail

13 product. Many industry observers track online marketplaces separately from other types of
14 online commerce.
b.

15

with selling as a vendor

16
17

Online marketplace services are not reasonably interchangeable

191.

Selling products as a vendor to a retail store, whether online or offline, who then

18 sells to shoppers is not reasonably interchangeable with buying online marketplace services.
19

192.

Selling products as a vendor to a retailer involves a pricing and transaction

20 structure different from buying online marketplace services. A vendor generally sells goods to a
21 retailer for a wholesale price. The retailer takes legal title to the goods and can sell them to
22 shoppers. Online marketplace services providers price their services differently, typically
23 including a percentage-based commission fee. The seller retains legal title to the goods and sells
24 those goods directly to shoppers on the online marketplace.
COMPLAINT - 60
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 65 of 172

1

193.

A vendor typically sells goods in batches to retailers, such as in a wholesale

2 relationship. A seller operating through an online marketplace, by contrast, typically sells goods
3 one at a time to online shoppers.
4

194.

Vendor arrangements also exhibit different features and characteristics from

5 online marketplace services. A vendor usually gives up the ability to set the price offered to
6 shoppers, and the retailer typically sets the shopper-facing prices. But sellers who buy online
7 marketplace services retain the ability to set and adjust prices to shoppers. Many merchants
8 prefer purchasing online marketplace services to vending to a retailer so that they can retain the
9 ability to set their own prices to final customers.
10

195.

Selling as a vendor often requires the vendor to give physical control of its goods

11 to the retailer. That reduces the vendor’s ability to decide which goods to offer and when to
12 make goods available. Unlike the retailer model, an online marketplace services provider allows
13 sellers to maintain control over which of its goods will be offered at what times.
14

196.

Selling as a vendor also limits the seller’s access to retail sales data, which is

15 usually controlled by the retailer. Some providers of online marketplace services, including
16 Amazon, provide customer-level sales and shopping data to sellers but not vendors.
17

197.

Industry participants recognize that these are important distinguishing

18 characteristics. For example, Walmart tells sellers that using its marketplace allows them to
19 “[r]emain in control of your business.”
c.

20

with services sold by SaaS providers

21
22

Online marketplace services are not reasonably interchangeable

198.

Software-as-a-service (“SaaS”) providers, including Shopify and BigCommerce,

23 sell software that enables sellers to create and maintain their own direct-to-consumer online
24
COMPLAINT - 61
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 66 of 172

1 stores. Sellers use this software to build and customize their own eCommerce websites. These
2 SaaS providers’ services are not reasonably interchangeable with online marketplace services.
3

199.

SaaS providers, unlike online marketplace service providers, do not provide

4 access to an established U.S. customer base. Rather, merchants that use SaaS providers to
5 establish direct-to-consumer online stores must invest in marketing and promotion to attract U.S.
6 shoppers to their online stores. As Mr. Jassy explained in a 2022 interview, “small and medium
7 sized” sellers use Amazon not because of the “eCommerce software” Amazon provides but
8 “because they get access to a few hundred million customers.”
9

200.

Another difference is that SaaS providers allow their customers to exercise

10 control over branding and marketing in ways marketplaces do not. For instance, SaaS providers
11 typically enable merchants to customize the look of their website and grant them access to all
12 consumer analytics, while allowing merchants to reach out to shoppers directly with sales
13 promotions and new releases.
d.

14

with services that primarily provide access to non-U.S. shoppers

15
16

Online marketplace services are not reasonably interchangeable

201.

Sellers who want to reach U.S. shoppers generally only consider online

17 marketplaces that already possess a significant U.S. customer base and facilitate sales to U.S.
18 shoppers through U.S.-specific marketplaces. Online marketplace service providers typically
19 operate distinct websites focused on customer bases by different geographies; these websites list
20 prices in the local currency and operate differently to ensure compliance with local law.
21

202.

Online marketplaces set different fees across their various geography-specific

22 websites.
23
24
COMPLAINT - 62
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 67 of 172

e.

1

for sales to U.S. shoppers is worldwide

2
3

The relevant geographic market for online marketplace services

203.

Online marketplace services, which provide sellers access to U.S. shoppers, are

4 procured by sellers worldwide. Online marketplace services providers supply such services for
5 sales to U.S. shoppers from anywhere in the world.
2.

6

market

7
8

Amazon has a dominant share of the online marketplace services

204.

Amazon has a durable and dominant share of the online marketplace services

9 market. According to commercially available data sources and as illustrated in Figure 15, below,
10 Amazon has maintained a market share of greater than 66% of marketplace sales, as measured by
11 GMV, across all tracked marketplaces since at least 2018, and that share grew to more than 71%
12 by 2022.
13
14
15
16
17
18
19
20
21
22
23
24

Figure 15. Source: eMarketer Insider Intelligence.
COMPLAINT - 63
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 68 of 172

1

205.

In 2021, sales by sellers on Amazon’s online U.S. Marketplace accounted for an

2 estimated $226 billion in GMV, more than five times the estimated amount sold by sellers on
3 eBay’s online U.S. marketplace and more than thirty-four times the estimated amount sold by
4 sellers on Walmart’s online U.S. marketplace. Amazon’s market share across all tracked retail
5 marketplaces dominates—and is continuing to outgrow—that of eBay and Walmart, as shown in
6 Figure 16 below.
7
8
9
10
11
12
13
14
15
16
17
18

Figure 16. Source: eMarketer Insider Intelligence.

19

3.

20
21

Amazon’s dominant position in the online marketplace services
market is protected by significant barriers to entry

206.

The online marketplace services market exhibits significant barriers to entry,

22 including, for example, scale economies, switching costs, and network effects. Network effects
23 between the online marketplace services and online superstore markets also present a unique
24 barrier, as discussed in Part V.C, below. Moreover, Amazon’s illegal course of conduct has
COMPLAINT - 64
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 69 of 172

1 made entry artificially and significantly more difficult than it would otherwise be, as discussed in
2 Part VI, below.
3

207.

The market for online marketplace services is also characterized by network

4 effects. For example, as an online marketplace serves more sellers, it can collect, analyze, and
5 offer robust aggregated sales data to its sellers, who can use the data to inform their business
6 decisions. A marketplace’s increased ability to offer useful sales data to sellers helps it attract
7 more sellers, which allows the marketplace to collect more data, and so on.
8

208.

As an online marketplace gains sellers, it also becomes more appealing to sellers

9 who offer products that are complements to the products already offered on the marketplace. For
10 example, a seller of cell phone cases may be more interested in selling on a marketplace on
11 which cell phones are also sold.
12

C.

Cumulative Impact Of Scale And Related Network Effects

13
14

Feedback Loops Between The Relevant Markets Further Amplify The

209.

The ability to gain scale is a critical factor in determining who can successfully

15 compete in both relevant markets. The feedback loop between these two relevant markets
16 further amplifies the importance of scale and network effects in these markets, making it more
17 difficult for rivals and potential rivals to enter and compete effectively against incumbents in the
18 relevant markets.
19

210.

Online superstores that also offer online marketplace services operate in both

20 relevant markets and benefit from scale and network effects that flow between—and reinforce
21 market power across—those markets. Though an online superstore does not necessarily need to
22 operate a marketplace, network effects between the two markets create an additional barrier to
23 entry for companies attempting to enter and compete in either market. For online superstores
24 with marketplaces, increasing scale in one market can make it easier to grow in the other, and a
COMPLAINT - 65
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 70 of 172

1 denial of scale in one market can make it harder to grow in the other. By amplifying the
2 impotiance of scale in both markets, these network effects can intensify the hannful impact of
3 conduct that unlawfully deprives rivals of scale, widening the gulf bet\veen films that can and
4 cannot effectively compete.
5

211.

To attract shoppers, an online superstore needs to offer a wide breadth and depth

6 of product selection. Online superstores that operate marketplaces can increase their breadth and
7 depth of product selection by offering products sold by third-party sellers.
8

212.

Similarly, sellers prefer marketplaces where many potential customers ah-eady

9 shop. By reaching a larger customer base, sellers can increase sales.
213.

Prospective entrants to both relevant markets face a chicken-and-egg problem:

11 they need to attract enough sellers to offer sufficient product selection to attract shoppers, but
12 they simultaneously also need to generate enough shopper traffic to attract those sellers.

■

13
14
15

This continuous loop creates a batTier to entiy in both mai·kets and accelerates

16 the growth of films that can overcome it.
17
18
19
20
21
22
23
24
COMPLAINT - 66
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 71 of 172

Figure 17. Example ofthe "Chicken-and-Egg" Barrier to Entry.

11

Source:

12
214.

13

Amazon leverages these network effects. At any given time, Amazon offers more

I different items for purchase on its online superstore.

14

Sellers who buy marketplace

15 services from Amazon provide much of the product selection that helps Amazon attract and keep
16 its shoppers. As more shoppers tum to Amazon for its product selection, more sellers use its
17 platfo1m to gain access to its ever-expanding consumer base, which attracts more shoppers, and
18 so on.
19

215.

Amazon recognizes this feedback loop. An internal Amazon strategy document

20 states that
21
Amazon publicly states that its "wide selection is

22
23 made possible through independent sellers."
24
COMPLAINT - 67
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 72 of 172

1

216.

The interplay between Amazon's shoppers and sellers increases batTiers to new

2 ently and expansion in both relevant markets and limits existing rivals' ability to compete. In
3 this way, scale builds on itself, and is cumulative and self-reinforcing.
4

217.

This feedback loop spins Amazon's "flywheel." Amazon publicly touts its

5 flywheel as a "virtuous cycle." But internally, Amazon
6

7
8

218.

For example, Amazon sti·ategically restli.cts how shoppers can purchase the

9 various se1vices included in its Prime subscription, artificially increasing bani.ers to ently in the
10 online superstore and online marketplace se1vices markets. Amazon has internally considered
11

Amazon fuses together a wide assortment of unrelated

12

13 se1vices ranging from sti·eaming video, music, and gaming to prescription dmgs and more to the
14 lmlimited shipping se1vice included in Prime-and through it, to Amazon's monopoly online
15 superstore.
16

219.

Amazon does not let shoppers subscribe only to the unlimited shipping

17 component of Prime.
18

220.

And while Amazon technically offers Prime Video on a standalone basis, Amazon

19 successfully uses dark patterns and other manipulative design techniques to thwart most shoppers
20 from actually being able to sign up for it.
21

221.

Amazon's restrictive strategy of offering Prime se1vices only on an all-or-nothing

22 basis means that shoppers who want any of those services must effectively buy all of them and
23 maintain a full Prime subscription. Amazon estimates that
24
COMPLAINT - 68
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 73 of 172

1
limiting other superstores' ability to build a

2

3 large customer base.
4

222.

Amazon's restrictive all-or-nothing Prime strategy ru.tificially heightens ently

5 ban-iers because rivals and potential rivals cannot compete for shoppers- including the ■
6

Prime subscribers described above- solely on the merits of their online superstores or

7 marketplace se1vices. fustead, they must enter multiple unrelated industries to attract Prime
8 subscribers away from Amazon or incur substantially increased costs to convince P11me
9 subscribers to sign up for a second shipping subscription or othe1wise pay for shipping a second
10 time. This substantial expense significantly consti·ains the number of finns who have any
11 meaningful chance to compete against Amazon and raises the costs of any that even tty. This
12 tactic blocks lower-priced rivals from competing head-to-head with Amazon to attract many
13 shoppers. Even fums that have inti·oduced compru.·able subscription se1vices at a fraction of the
14 price have stiuggled to make serious inroads. Amazon's restrictive strategy a1tificially heightens
15 ban-iers to ent1y, suc.h that an equally or even a more efficient or innovative rival would be
16 unable to fully compete by offering a better online superstore or better online marketplace
17 se1v1ces.
18

223.

Amazon internally acknowledges that

19
20
21
22
23
24 So, Amazon deliberately restricts how shoppers can access vru.-ious components of Prime, despite
COMPLAINT - 69
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 74 of 172

1 knowing that offering additional choices for consumers would lead to more competition and
2 better prices.
3

225.

This cmTent restrictive stmcture of Prime reflects a deliberate strategy by Amazon

4 to artificia lly increase bani.ers to entiy and competition. As one fonner Amazon executive
5 explained in recalling Amazon's motivation for adding non-shipping services to Prime, "[a]ny
6 competitor might launch a Prime shipping clone, or they could potentially build a new Netflix7 type service, but it was unlikely that any one of them would be able to do both."
8

226.

In 2021, Amazon

9

11
12
13
14
As Mr. Bezos put it

15

16 publicly, Amazon "monetize[s] [Prime Video] content in an unusual way .. .. When we win a
17 Golden Globe, it helps us sell more shoes."
18
19
To date, Amazon

20

choosing to limit consumer choice and maintain artificially

21
22 heightened baITiers to entiy.
23

227.

Amazon has also pursued a set of anticompetitive tactics-discussed fmiher in

24 Section VI, below- to unlawfully deny its rivals access to both shoppers and sellers, ru.iificially
COMPLAINT - 70
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 75 of 172

1 stunting their growth by starving them of the feedback loops across the relevant markets that
2 would benefit shoppers and sellers alike.
3

D.

Direct Evidence Further Demonstrates Amazon's Monopoly Power

4

228.

Direct evidence demonstrates that Amazon has monopoly power. Amazon's

5 ability to profitably do the following without losing sufficient business to change its behavior
6 illustrates its monopoly power: (a) degrade the quality of its shopper-facing search results and
7
8

9
and (c) raise the prices it charges sellers to acc.ess the full suite of
11 Amazon's marketplace seller services and fulfillment se1vices. In addition, Amazon' s unlawful
12 conduct is fuiiher direct evidence confuming Amazon's monopoly power in both markets.
13

1.

Amazon has

14

15
16
17
18
19
20
21
22
23
24
COMPLAINT - 71
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 76 of 172

1
2
3
4

231.

In theo1y, relevant adve1tisements can be useful to shoppers in some instances.

5 Impo1tantly, Amazon
6
7
8
9
10
11

12
13

14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 72
CASENO. : -cv-

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 77 of 172

1
2

3
4 executive repo1iedly compared Amazon's adve1tising and search divisions to the parable of the
5 scorpion and the frog: it was in the adve1tising division's nature as the proverbial "scorpion" to
6 poison organic search results.

7

234.

8
9
10
11

12

, Amazon- -

13

14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 73
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 78 of 172

1
2

3
Moreover, because Amazon's anti-

4

5 discounting conduct punishes sellers who offer lower prices at rival online stores with lower
6 fees, many sellers set their price on Amazon- high fees and all- as the price floor across the
7 internet.
8

237.

9
According to public reports,
11 Amazon engineers found that "[w]hen sponsored ads were prominently displayed, there was a
12 small, statistically detectable sho1t-te1m decline in the number of customers who ended up
13 making a purchase."
While fewer shoppers were finding what they wanted,

14

15 adve1tisements were making more money- "[a] lot of it."
16

238.

17
18
19
20
21 degrading shoppers' experiences, Amazon continues to have double digit growth in overall sales,
22 not losing meaningful numbers of shoppers to rivals.
23

239.

24
COMPLAINT - 74
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 79 of 172

1
2

3

240.

Amazon's ability to profitably worsen its se1vice for customers is a hallmark of

4 monopoly power.

2.

5

third-party competitors of Amazon's private label products

6

7

Amazon degrades its search quality by stacking the deck against

241.

Amazon fmther degrades the quality of its search results by bmying organic

8 content under recollllllendation widgets, such as the "expe1t recollllllendation" widget, which
9 display Amazon's private label products over other products sold on Amazon.
242.

A recollllllendation widget is a discrete po1tion of Amazon's website or mobile

11 app that lets customers scroll through a set of recommended products. Previously, such widgets
12 were limited to displays like an area on a product' s Detail Page indicating what "customers also
13 bought," or an area suggesting shoppers may want to replenish items they had previously
14 purchased, like paper towels.
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 75
CASE NO. - - -cv-

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 80 of 172

1
2

3
4

5
6

7
8
9

11

12
13
14

Rather than competing to secure recommendations based on quality,

15 Amazon intentionally warped its own algorithms to hide helpful, objective, expert reviews from
16 its shoppers. One Amazon executive repo1iedly said that "[f]or a lot of people on the team, it
17 was not an Amazonian thing to do," explaining that "Li]ust putting our badges on those products
18 when we didn't necessarily earn them seemed a little bit against the customer, as well as anti19 competitive."
20

247.

21
22
23
24
COMPLAINT - 76
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 81 of 172

1
2
3

248.

In competitive markets, the possibility of losing business to rivals would tend to

4 pressure a company to create more value for its customers, shoppers and sellers alike. But
5 Amazon's unchecked dominance allows it to degrade its service without ceding-and indeed
6 while expanding-its business. The fact that Amazon's degradation of its search results through
7 biased widgets did not cause Amazon to lose sufficient business or to change its behavior further
8 demonstrates its monopoly power.

3.

9
249.

Amazon increases prices to sellers without losing meaningful business

Amazon's monopoly power also allows it to charge higher prices and provide

11 lower quality se1vices to sellers. As explained in Pait IV, above, Amazon charges sellers selling
12 fees, refenal fees, fulfillment fees, and adve1tising fees. The total price Amazon charges a seller
13 has skyrocketed without a conespondingly large loss of business.
14

250.

Before Amazon decided to prioritize adve1tisements as a way to generate revenue,

15 sellers were able to access prominent and valuable search page placement by paying just
16 Amazon's refe1Tal and sales fees. Now, adve1tised products on Amazon are 46 times more likely
17 to be clicked on when compared with products that are not adveitised. Adve1tisements are now
18 no longer a discretiona1y purchase but instead a necessaiy cost of doing business. Therefore,
19 sellers must not only pay Amazon's refe1Tal fee but must also now pay for adve1tising in order to
20 reach shoppers.
21

251.

Amazon has also hiked average fulfillment fees to sellers, which jumped

22 approximately 30% between 2020 and 2022. Amazon has made these fees, too, a prerequisite to
23 being a successful seller on Amazon. As described in Pait VI.B below, Amazon effectively
24
COMPLAINT - 77
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 82 of 172

1 forces sellers to pmchase its fulfillment services to access the full reach of Amazon's
2 marketplace se1v ices that Prime eligibility unlocks.
3

252.

By effectively requiring sellers to pay for search placements through adve1iising

4 and for Prime's shipping costs through FBA, Amazon has dramatically increased the percentage
5 cut it takes out of seller revenues, also known as Amazon's "take rate." Amazon' s average take
6 rate for sellers who use FBA

% in 2014 to

% in 2022 for

7 essentially the same se1vices. Amazon now takes nearly one out of eve1y two dollars of sales
8 from sellers who use its fulfillment se1vices, many of whom are small businesses with ah-eady
9 thin margins. By compai·ison,

The fact that such

10 low-margin sellers remain on Amazon even as Amazon takes an ever-greater cut of their
11 revenues shows Amazon 's monopoly power.
12

253.

Sellers note that because they depend on Amazon, they effectively have no choice

13 but to submit to Amazon's growing demands. As a third-party seller put it
14

The seller continued, stating that

15
According to a public aiiicle, another seller stated that "[t]or some products, we

16

17 realized that we need to pay for ads but we'll never profit at our cunent prices." As a result, that
18 seller had to raise prices to pay for advertising on Amazon.
19

254.

Amazon also recognizes that sellers believe "that it has become more difficult

20 over time to be profitable on Amazon."
One of the only ways left for sellers

21

22 to eke out a profit is to raise the prices paid by shoppers. A seller succinctly explained this
23 dynamic:
24
COMPLAINT - 78
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 83 of 172

1
2

3
4

255.

Amazon has hiked its fees even as it has failed to adequately protect sellers '

5 commercially sensitive data, exposing this data to theft and appropriation. futemally, Amazon
6 recognized

7
8
9
10
11

12
13
14
fudeed, seller fonuns on Amazon are rife with

15

16 complaints about issues ranging from abrnpt and arbitrary account suspensions to sellers having
17 their invento1y unexpectedly seized with no recourse. One seller explained that they could not
18 leave Amazon because "[w]e have nowhere else to go and Amazon knows it." According to an
19 internal Amazon study, Amazon's sellers live "in constant fear" of Amazon ai·bitrarily
20 interfering with their ability to sell on Amazon, which "put[s] their businesses and livelihoods at
21

risk." Amazon's ability to profitably hike fees while maintaining its iron grip over sellers is

22 fmther evidence of its monopoly power.
23
24
COMPLAINT - 79
CASE NO. - :- -cv-- -

FEDERAL TRADE COMMISSION
600 Pennsylvania A venue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 84 of 172

1 VI.

AMAZON IS ENGAGED IN A COURSE OF CONDUCT THAT ILLEGALLY

2

MAINTAINS ITS MONOPOLIES IN BOTH RELEVANT MARKETS

3

257.

Amazon illegally maintains its monopolies through an interrelated course of

4 conduct that blocks competition. First, Amazon deploys a series of anticompetitive practices that
5 suppress price competition and push prices higher across much of the internet by creating an
6 artificial price floor and penalizing sellers that offer lower prices off Amazon. Second, Amazon
7 coerces sellers into using its fulfillment service to obtain Prime eligibility and successfully sell
8 on Amazon. Each of these tactics—independently and collectively—prevents Amazon’s rivals
9 from gaining scale and maintains Amazon’s monopolies.
10

258.

Amazon first ensures that no other online rival can gain scale through offering

11 prices lower than those listed on Amazon. Amazon accomplishes this anticompetitive goal
12 through an interwoven set of algorithmic and contractual tactics, all of which rely on Amazon’s
13 massive web-crawling apparatus that constantly tracks online prices. Amazon’s anti-discounting
14 punishments tame price cutters into price followers, effectively halting real price competition.
15 This conduct imposes costs on shoppers and sellers alike. Shoppers pay inflated prices on and
16 off Amazon, as sellers must effectively submit to Amazon’s high fees by raising prices even on
17 non-Amazon sites. Rivals no longer compete to offer sellers lower fees, since Amazon’s anti18 discounting conduct prevents sellers from passing those savings on to shoppers.
19

259.

For sellers, Amazon conditions access to Prime eligibility on sellers’ use of

20 Amazon’s proprietary fulfillment service, FBA. Amazon’s coercion makes it more difficult and
21 more expensive for sellers to sell on other marketplaces, which in turn makes it more difficult for
22 rivals to attract sellers and compete with Amazon on product selection. The result is a feedback
23 loop that continues to inhibit the growth of rivals and starve them of scale while maintaining and
24 expanding Amazon’s dominant positions.
COMPLAINT - 80
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 85 of 172

1

260.

Each element of Amazon’s course of conduct mutually reinforces its monopolies

2 in both relevant markets. For example, Amazon’s anti-discounting scheme stifles price
3 competition. That same scheme also reinforces the exclusionary effects of Amazon’s use of
4 Prime eligibility to force sellers to use FBA, by making it even less profitable for sellers to sell
5 on other marketplaces. This feedback loop fuels a flywheel of anticompetitive harm, amplifying
6 the aggregate effects and further widening the gulf between Amazon and everyone else.
7

261.

Because Amazon suppresses meaningful competition on price and product

8 selection, shoppers lack viable alternatives, further forcing sellers to submit to Amazon’s
9 exclusionary tactics to reach those customers, and further allowing Amazon to accelerate and
10 expand its dominance. Together, Amazon’s conduct blocks off competition, shopper traffic, and
11 seller business in the interrelated relevant markets.
12

A.

Exclusionary Anti-Discounting Conduct That Stifles Price Competition

13
14

Amazon Maintains Its Monopolies In Both Relevant Markets Through

262.

A core Amazon strategy is to limit one of the most fundamental avenues of

15 competition: price competition. Amazon understands the importance of maintaining the
16 perception among shoppers that it has the lowest prices. But in reality, Amazon relentlessly
17 stifles actual price competition by punishing sellers who offer lower prices anywhere other than
18 Amazon and disciplining rivals that undercut Amazon’s prices.
19

263.

Amazon uses a variety of tactics to execute its anti-discounting strategy. At the

20 foundation is Amazon’s sprawling price-surveillance group, the
21 which constantly crawls the internet for prices. Using this price-surveillance team, Amazon
22 punishes third-party Marketplace sellers who offer lower prices on other online stores. Amazon
23 imposes additional contractual obligations suppressing price competition on its most important
24 sellers, backed up by the threat of even stronger penalties—including total banishment from
COMPLAINT - 81
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 86 of 172

1 Amazon’s Marketplace. Amazon also deters rivals from even attempting to compete with
2 Amazon’s first-party Retail business on price by ensuring that rivals’ price cuts do not result in
3 greater scale, only lower margins.
4

264.

Combined, Amazon’s conduct quashes one of the most direct ways to compete

5 with Amazon in both relevant markets: by offering lower prices. In an open, competitive
6 environment, rival online superstores could attract more business by offering shoppers lower
7 prices, and rival online marketplaces could attract sellers by charging them lower fees, allowing
8 sellers to pass those savings on to shoppers via lower prices. Amazon suppresses this price
9 competition by wielding its monopoly power to prevent sellers and retailers from offering lower
10 prices off Amazon.
11

265.

Without the ability to attract shoppers or sellers through lower prices, rivals are

12 unable to gain a critical mass of either shoppers or sellers despite needing both to compete
13 against Amazon. Further, by punishing sellers when there are lower prices off Amazon and
14 disciplining rivals that try to compete on price, Amazon teaches shoppers not to look for lower
15 prices off Amazon. Less comparison shopping again hinders rivals from gaining a larger
16 consumer base. Amazon’s anti-discounting strategy therefore denies rivals the ability to gain
17 scale, cements Amazon’s dominance in both relevant markets, and ultimately keeps prices higher
18 than they would be in a competitive market.
1.

19

scheme

20
21

Amazon engages in price surveillance to support its anti-discounting

266.

The foundation of Amazon’s anti-discounting scheme is an extensive price-

22 tracking operation housed within
23
24
COMPLAINT - 82
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 87 of 172

1
2
3

267.

Amazon’s

268.

Amazon

4
5
6
7
8
9
10
11
2.

12

when Amazon detects lower prices on other online stores

13
14

Amazon maintains its monopolies by punishing third-party sellers

269.

Using its vast surveillance network, Amazon systematically punishes sellers when

15 Amazon detects a lower price on other online stores. Amazon does this in two ways. One way
16 Amazon punishes sellers is by disqualifying a seller’s offer from appearing in the Buy Box when
17 Amazon finds a lower price on another online store for an item being sold by a seller on
18 Amazon. For many sellers, losing the Buy Box—and even the ability to qualify for the Buy
19 Box—is an existential threat to their business. Amazon has amassed and maintains a huge
20 shopper base, making Amazon a vital sales channel for many sellers. The second way Amazon
21 punishes sellers is by imposing contractual obligations on certain important sellers, backed up
22 with the threat of even stronger penalties, including total banishment from Amazon’s
23 Marketplace.
24
COMPLAINT - 83
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 88 of 172

1

270.

As a result of Amazon’s threats and punishments, even rival platforms that charge

2 sellers less than Amazon for marketplace services would not be able to draw shoppers through
3 lower prices.
4

271.

Amazon not only suppresses the ability of sellers and retailers to offer lower

5 prices elsewhere, but its conduct effectively elevates prices even off Amazon. Because Amazon
6 has steadily hiked the fees it charges sellers while also prohibiting them from discounting on
7 other websites, sellers must often use their inflated Amazon prices as an artificial price floor
8 everywhere. As a result, Amazon’s conduct causes online shoppers to face artificially higher
9 prices even when shopping somewhere other than Amazon.
a.

10

Amazon

11
12

Amazon penalizes sellers when Amazon finds lower prices off

272.

Amazon’s anti-discounting strategy has taken several forms. Amazon originally

13 included a clause in its Business Solutions Agreement—a contract every seller must agree to—
14 that explicitly prohibited sellers from offering lower prices elsewhere. From at least as early as
15

until March 2019, this contract required each seller to “maintain [price] parity” between

16 Amazon and other online sales channels. This meant that a seller could not offer lower prices on
17 other online stores without breaching their Amazon contract, even when their selling costs were
18 lower on those stores.
19

273.

After European competition authorities launched multiple investigations into

20 Amazon’s price parity clauses, Amazon dropped this requirement in Europe in August 2013.
21

274.

In December 2018, U.S. Senator Richard Blumenthal sent public letters to the

22 Federal Trade Commission and the U.S. Department of Justice expressing “deep[] concern[] that
23 the price parity provisions in Amazon’s contracts with third-party sellers could stifle market
24 competition and artificially inflate prices on consumer goods.” Three months later, Amazon
COMPLAINT - 84
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 89 of 172

1 quietly stopped its practice of applying this particular contractual price parity provision to all
2 sellers.
3

275.

Despite making this particular change, Amazon never abandoned its strategy of

4 preventing sellers from offering lower prices elsewhere. Instead, Amazon
5
6
7

276.

An internal Amazon document written weeks after Amazon dropped its

8 contractual price parity requirement acknowledged that Amazon intended to use

to

9 enforce its “expectations and policies,” which “ha[d] not changed.” Whether done contractually
10 or algorithmically, Amazon requires sellers to keep prices off Amazon as high or higher than
11 prices on Amazon. Amazon uses
12
“not only trivial but a trick and an attempt to garner goodwill with policymakers

13

14 amid increasing competition concerns.”
15

277.

16
If Amazon disqualifies every

17

18 offer for a given product from winning the Buy Box, Amazon removes the Buy Box itself from
19 the product’s Detail Page.
20

278.

21
22
23
24
COMPLAINT - 85
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 90 of 172

1
2
3

279.

4
5
6
7
8

280.

9
10
11
12
13
14
15

281.

Today, Amazon tells sellers that they will be punished if Amazon detects a lower

16 price on any other online store. In 2022, for example, Amazon explained to thousands of sellers
17 that a “pre-requisite” to “win[ning] the ‘Buy Box’” is to ensure that lower prices are never
18 available off Amazon.
19

282.

20
21
22
23
24

283.

Today, Amazon
by wielding a suite of penalties to bury products

including:

(a) demoting them in search results;
COMPLAINT - 86
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 91 of 172

1

(b)

2

(c)

3

(d)

4

and

284.
Amazon itself recognizes that removing a seller from the Buy Box causes

5

6 their sales to “tank.” Offers outside of the Buy Box comprise less than % of all purchases on
7 Amazon.
8

285.

Amazon’s penalties effectively deter sellers from offering prices elsewhere that

9 are lower than their prices on Amazon, even where their costs are lower through other online
10 sales channels. That in turn limits the ability of other online superstores to offer prices lower
11 than those on Amazon, hindering the growth of would-be rivals and denying them the scale
12 necessary to compete.
b.

13

sellers from discounting elsewhere

14
15

Amazon continues to contractually prohibit its most important

286.

Amazon places additional limits on certain sellers’ ability to sell products at lower

16 prices on other online stores. These restrictions are embedded in the “Amazon’s Standards for
17 Brands” (“ASB”) program.
18

287.

Amazon applies ASB to brands, brand licensees, and brand representatives that

19 use Amazon’s Marketplace (“ASB sellers”), regardless of whether their brand is a long20 established household name or an upstart few people would recognize.
21
22

288.

ASB sellers are an especially important type of seller to Amazon for two reasons.

23 First, ASB sellers constitute
24
COMPLAINT - 87
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 92 of 172

1

In 2021,

% of Amazon Marketplace sales were by ASB sellers, and Amazon

2 projected they would sell more than
3

289.

of products on Amazon in 2022.

Second, because of their close relationship with the brands they sell, ASB sellers

4 have more influence over brand prices and selection across channels than “resellers,” which lack
5 such a relationship. As a founding member of the team responsible for ASB explained,
6
7
8

290.

Amazon implemented ASB in September 2018 through an amendment to the

9 Business Solutions Agreement. All sellers, including ASB sellers, must agree to Amazon’s
10 Business Solutions Agreement in order to sell on Amazon’s Marketplace. The ASB restrictions
11 are therefore binding contractual obligations that Amazon imposes on ASB sellers.
12

291.

Through ASB,

292.

Amazon also

13
14
15
16
17
18
19
20
21

293.

22
23
24
COMPLAINT - 88
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 93 of 172

1
2
3
4
5

294.

Amazon threatens an ASB seller’s “privileges”—including the “privilege” to

6 “operate as a seller in the Amazon store altogether”—if the ASB seller violates any part of ASB.
7 In other words, Amazon threatens not just to kick ASB sellers’ offers out of the Buy Box but to
8 boot them out of Amazon’s Marketplace altogether if
9
10
11

295.

In addition to revoking some ASB sellers’ selling privileges in full by shutting

12 down their seller accounts, Amazon also
under the guise of ASB policy

13
14 enforcement, Amazon
15
16

296.

17
18
19
20
21

297.

22
23
24
COMPLAINT - 89
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 94 of 172

1
2
3
4
5
6

298.

7
8

299.

In 2019, Amazon

300.

In late 2021,

301.

Amazon

302.

The Amazon team responsible for ASB has

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 90
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 95 of 172

1
2
3
4
5
6

303.

7
8
9
10

304.

—are thus additional elements working across

ASB—

11 Amazon’s business in tandem with Amazon’s other strategies that punish off-Amazon
12 discounting, stifle competition, impede the growth of potential competitors, hike prices, and
13 degrade quality for consumers in the relevant markets.
c.

14

Amazon’s anti-discounting strategy prevents rivals and sellers

15

from offering lower prices and deprives rivals of scale necessary

16

to compete

17

305.

By suppressing competition in the online superstore and marketplace services

18 markets, Amazon’s anti-discounting strategy artificially inflates prices. Shoppers and sellers pay
19 more, and Amazon reaps the benefits.
20

306.

Amazon’s one-two punch of high fees and seller threats forces sellers to use their

21 inflated Amazon prices as a price floor everywhere else they sell online. As a result of
22 Amazon’s conduct, shoppers often have no choice but to pay at least the price in Amazon’s Buy
23 Box even when they buy online somewhere other than Amazon.
24
COMPLAINT - 91
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 96 of 172

1

307.

Sellers generally price their goods to at least cover their costs, including fees

2 charged by online marketplace services providers (such as those discussed in Part IV, above).
3 Thus, the seller’s shopper-facing price depends on the amount of fees charged by different
4 marketplaces.
5

308.

As discussed in Part V.D.3, above, the cost of doing business is higher on

6 Amazon than on other marketplaces—and Amazon has steadily hiked the fees it charges sellers,
7
8

309.

Because Amazon has steeply raised its fees, sellers need to charge higher prices

9 on Amazon than they would on a less-costly marketplace to make the same per-unit profit.
10 Amazon’s high fees should present other online superstores with an opportunity that would make
11 shoppers, sellers, and themselves better off: if those superstores can offer sellers lower fees,
12 sellers could offer shoppers lower prices while making the same or a higher profit margin, which
13 should cause shoppers and sellers alike to flock to the less-costly online store.
14

310.

Amazon has destroyed this competitive dynamic by algorithmically forcing

15 sellers to ensure that their prices off Amazon are no lower than their prices on Amazon,
16 regardless of the relative costs. Similar anticompetitive effects flow from ASB, which
17 contractually prevents brands from offering lower prices elsewhere online even when it would be
18 profitable for them to do so, including on their own websites.
19

311.

Amazon internally recognizes that

20
21
22
23
24
COMPLAINT - 92
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 97 of 172

312.

1
2

For instance, one seller told Amazon that

3
4
5

Sellers have also complained to Amazon

6

7 “that [Buy Box disqualification] encourages Sellers to raise their prices on competitor websites.”
8

313.

One Amazon seller

314.

Another seller

315.

Amazon understands that its anti-discounting strategy generally does not have the

9
10
11
12
13
14

15 effect of lowering prices on Amazon because sellers must pay the high fees charged by Amazon.
16 A 2017 Amazon internal memo observed that Buy Box disqualification “has not led Sellers to
17 lower their prices” and “has not motivated Sellers to reduce prices.”
“it has become

18

19 more difficult over time [for sellers] to be profitable on Amazon.” As discussed in Part V.D.3,
20 above, the fees Amazon charges sellers have ballooned
21
316.

22

The primary and intended effect of Amazon’s anti-discounting strategy is that

23 sellers do not offer lower prices off Amazon even if other online marketplaces offer sellers lower
24 costs.
COMPLAINT - 93
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 98 of 172

1

317.

This effect is intensified for sellers subject to ASB. While Amazon’s algorithmic

2 anti-discounting punishment focuses on individual products, Amazon’s enforcement of ASB
3 threatens an ASB seller’s ability to sell anything at all as a third-party seller on Amazon’s
4 Marketplace. ASB’s threatened contractual punishments could therefore effectively cut off a
5 huge channel for sellers. In that way, ASB is broader in scope than any particular instance of
6 Amazon’s algorithmic third-party punishment, making it even more likely that Amazon’s
7 punitive program deeply chills discounting by ASB sellers off Amazon.
8

318.

9
10
11
The force and fear of Amazon’s tactics are so strong that actual punishment is

12

13 often not necessary. The threat alone can be enough.
14

319.

For example,

15
16
17 Amazon’s anti-discounting punishments also limit the extent to which sellers sell on other online
18 marketplaces, where sellers can control the final prices offered to customers.
19
20
21
22
23

320.

Amazon’s anti-discounting conduct reverberates throughout both relevant markets

24 because of Amazon’s dominance in each market. For example,
COMPLAINT - 94
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 99 of 172

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 100 of 172

3.

1

with its first-party anti-discounting algorithm

2
3

Amazon maintains its monopolies by suppressing price competition

325.

For Retail products that Amazon prices and sells itself, Amazon deploys a similar

4 anti-discounting program that it implements through another pricing algorithm. While the exact
5 mechanism differs from the mechanisms Amazon uses to punish sellers, the means, motive, and
6 effects are all the same. Amazon uses its extensive surveillance network to block price
7 competition by detecting and deterring discounting, artificially inflating prices on and off
8 Amazon, and depriving rivals of the ability to gain scale by offering lower prices.
a.

9

discipline rivals from lowering their prices

10
11

Amazon’s first-party anti-discounting algorithm is designed to

326.

Amazon designed and implemented a first-party anti-discounting algorithm to

12 deter other online stores from offering lower prices than those of Amazon’s Retail products.
13 Amazon recognizes the importance of maintaining the perception that it has lower prices than
14 competitors. Behind closed doors, however, Amazon executives actively
15
16

327.

Amazon’s former

328.

Instead,

17
18
19
20
21
22
23
“prices will go up.”

24
COMPLAINT - 96
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 101 of 172

1

329.

When using its first-party anti-discounting algorithm, Amazon disciplines rivals

330.

In effect, Amazon deters rivals from even attempting to compete with Amazon’s

2 by
3
4
5
6
7
8
9
10

11 first-party Retail business on price because rivals quickly learn that their price cuts do not result
12 in greater market share or scale, only lower margins.
13

331.

In an open and competitive market, rivals can compete to attract business by

14 offering lower prices to shoppers. Instead, Amazon has committed to its first-party anti15 discounting pricing strategy because that strategy deters rivals from price competition and
16 prevents rivals from drawing business and gaining market share. Amazon’s algorithmic process
17 unfolds over and over to discipline rivals who dare to lower their prices, conveying to them that
18 they will not gain business through competing on price. As a result, Amazon has successfully
19 taught its rivals that lower prices are unlikely to result in increased sales—the opposite of what
20 should happen in a well-functioning market.
21

332.

By relentlessly disciplining rivals, Amazon forecloses the give and take that is

22 typical in a competitive market and limits rivals’ ability to gain customers by undercutting
23 Amazon’s prices. The result is that rivals’ growth is stunted, and shopper prices are pushed
24 higher than they would be in a world without Amazon’s anti-discounting scheme. According to
COMPLAINT - 97
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 102 of 172

Amazon’s first-party anti-discounting algorithm has “work[ed]”

1
2

b.

3

Amazon’s first-party anti-discounting algorithm has stopped
other online stores from competing through offering lower prices

4
333.

5

Though the different elements of Amazon’s anti-discounting strategy often work

6 in tandem to stifle competition (as discussed in Part VI.A.4, below), Amazon’s first-party anti7 discounting algorithm has, on its own, deterred other online stores from competing through
8 lower prices.
334.

9

For example, Amazon’s first-party anti-discounting scheme successfully deterred

10 price competition in 2017 when

introduced a

11
12
13
14
15
335.

16
17 induce

Amazon concluded that its first-party anti-discounting strategy ultimately helped
to stop competing on price through its pickup discount program. In an internal

18 planning and strategy document, Amazon determined that its first-party anti-discounting
19 algorithm created a
20
21

336.

In response to Amazon’s anti-discounting conduct,

22
Amazon estimated that

23
24
COMPLAINT - 98
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 103 of 172

1

337.

At one point in 2019, after enduring years of Amazon’s algorithmic disciplining,

2
3
4
5
6
7
8
4.

9

their collective anticompetitive effect

10
11

Amazon combines its various anti-discounting programs to maximize

338.

Amazon uses all of its various anti-discounting programs—and the combined

12 power of its Marketplace and Retail arms—to limit price competition and comparison shopping
13 for the hundreds of billions of dollars in goods sold annually in the relevant markets. This
14 suppression of price competition and comparison shopping also artificially contributes to
15 converting more shoppers into Prime subscribers.
16

339.

Amazon’s seller-disciplining tactics and first-party anti-discounting algorithm are

17 each powerful on their own (as explained in Parts VI.A.2.c and VI.A.3.b, respectively), but the
18 whole of their combined anticompetitive impact is significantly greater than the sum of their
19 individual effects.
20

340.

In 2016, Amazon used various elements of its anti-discounting strategy to

21 hamstring

a new online superstore that planned to compete against Amazon by

22 offering shoppers and sellers lower prices. Amazon feared that
23
Amazon predicted that

24
COMPLAINT - 99
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 104 of 172

In Amazon’s

1
2 estimation
3
4

341.

Amazon responded to

launch by activating the combined might of its

5 Marketplace and Retail businesses. With respect to the Marketplace business, Amazon
6
7

On the Retail front,

8
9

342.

The combined force of Amazon’s anti-discounting schemes worked. Less than

10 three months after

launched,

was forced to

11
12
13
14
15

343.

More recently, Amazon used the same combination of its anti-discounting

16 strategies to target

a potential entrant to the online superstore market specializing in

17 homeware, children’s products, and women’s clothing. Until recently,

primary strategy

18 was to offer shoppers deep discounts on various products during limited time “flash sales.”
19

endeavored to offer the “lowest price online” during those sales. This meant beating

20 Amazon’s prices.
21

344.

In late 2019,

rolled out a

initiative that displayed its

22 lower price alongside the higher prices of identical products on Amazon or Walmart.com. This
23 is a classic form of price competition that should flourish in a competitive market.
24
COMPLAINT - 100
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 105 of 172

1

345.

To Amazon, this price competition was intolerable—and so it set out to destroy it.

2
In 2019, for example, Amazon’s

3

4 estimated U.S. sales volume was approximately 100 times greater than
5
6
7
8

346.

Amazon activated its Marketplace arm against

9 seller punishments quickly stopped many

by punishing sellers. Its

suppliers that were also Amazon sellers from

10 offering lower prices on
11
12
13
14
15
16
17

347.

Amazon also swung its Retail business into action, applying its first-party anti-

18 discounting algorithm to
19
20
21
22

348.

After Amazon began using the combined force of its Marketplace and Retail anti-

23 discounting strategies
24
COMPLAINT - 101
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 106 of 172

1
2
3
4

349.

Facing the full brunt of Amazon’s anti-discounting conduct,
After a few months,

5
6
7
8

350.

In sum, Amazon’s monopolistic anti-discounting conduct blocks critical avenues

9 of competition in both relevant markets through its anti-discounting practices. Amazon’s
10 conduct denies rivals scale, stifles innovation, deadens price competition, reduces output, and
11 deprives the American public of lower prices.
12

B.

Sellers To Use Amazon’s Fulfillment Service

13
14

Amazon Maintains Its Monopolies In Both Relevant Markets By Coercing

351.

Amazon maintains its monopolies in both relevant markets by coercing sellers to

15 use FBA, thereby denying rival online marketplace services providers and superstores the ability
16 to gain the scale needed to compete meaningfully against Amazon in both relevant markets.
17

352.

Prime eligibility is a basic prerequisite for sellers to fully access Amazon’s

18 substantial base of shoppers, making it a critical aspect of the marketplace services Amazon
19 offers to sellers. When a seller’s product is Prime eligible, it receives the Prime badge. For
20 sellers, this designation boosts their chance of winning the Buy Box and making significant
21 sales, while sellers who forgo Prime eligibility effectively disappear from Amazon’s storefront.
22 For shoppers that are Prime subscribers, the Prime badge denotes that a purchase of the product
23 will not include additional shipping and handling costs, often making these products more
24 attractive.
COMPLAINT - 102
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 107 of 172

1

353.

Amazon exploits sellers’ demand for access to Prime eligibility by generally

2 conditioning that access on use of Amazon’s proprietary fulfillment service, FBA, even though
3 other fulfillment options could provide comparable or better service.
4

354.

Sellers who use FBA must relinquish physical control over their products and

5 place them in Amazon’s fulfillment centers, which principally can be used to serve only Amazon
6 customers. As a result, a seller who wants to sell both to Amazon and non-Amazon customers
7 must maintain a separate supply of inventory dedicated exclusively to non-Amazon customers
8 and engage a separate fulfillment provider to serve those non-Amazon customers.
9

355.

Absent Amazon’s restrictions, many sellers would prefer to use an independent

10 fulfillment provider that would allow them to more easily fulfill orders placed on both Amazon
11 and non-Amazon marketplaces. That, in turn, would increase the ability of rival online
12 marketplace services providers to compete for sellers’ business and increase the ability of rival
13 online superstores with marketplaces to compete by offering greater product selection to
14 shoppers. Conditioning a product’s Prime eligibility on its seller’s use of FBA maintains
15 Amazon’s monopoly in both relevant markets in two main ways. First, it raises the cost of
16 multihoming, forcing sellers who sell through more than one online superstore to bear the
17 increased costs of using multiple fulfillment providers. Second, it forecloses independent
18 fulfillment providers from competing to fulfill Prime orders on Amazon, depriving those
19 independent providers of an important source of business and scale needed to build out an
20 efficient fulfillment network. Because fewer sellers can cost-effectively multihome, rivals and
21 potential rivals to Amazon are deprived of product selection.
22

356.

In the relevant online superstore and online marketplace services markets where

23 scale and network effects insulate incumbents from competition, the effects of Amazon’s
24 conduct continuously compound as it diminishes sellers’ incentive and ability to multihome.
COMPLAINT - 103
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 108 of 172

1

357.

Amazon’s conduct constrains its rivals’ ability to compete, harming shoppers and

2 competition in both relevant markets and entrenching Amazon’s monopoly. By making it more
3 expensive for sellers to sell the same product on multiple online superstores and marketplaces,
4 Amazon artificially limits rivals’ ability to gain sufficient growth, momentum, and scale to draw
5 a critical mass of shoppers and meaningfully compete.
1.

6

Amazon’s storefront

7
8

Sellers who forgo Prime eligibility effectively disappear from

358.

In 2021, over

U.S. consumers, or approximately

% of U.S.

9 households, subscribed to Amazon Prime. Prime subscribers account for an overwhelming share
10 of all purchases on Amazon—more than

% of all purchases by dollar value in 2021. Prime

11 subscribers also disproportionately purchase Prime-eligible offers. For example, more than

%

12 of the items U.S. Prime subscribers purchased in the third quarter of 2021 were Prime eligible.
13 In the first quarter of 2021, U.S. Prime subscribers bought nearly

Prime-eligible products

14 for every one non-Prime-eligible product they purchased.
15

359.

For many sellers, having Prime-eligible products is a prerequisite to making

16 significant sales on Amazon. The Prime designation makes sellers’ products more
17 discoverable—and therefore likely to be purchased—
18
19
20
21
22

360.

Overall, Prime eligibility alone regularly

a seller’s sales on Amazon.

23 Meanwhile, sellers who forgo Prime eligibility effectively disappear from Amazon’s storefront.
24 Amazon relegates non-Prime-eligible products to a near-invisible, second-rate version of
COMPLAINT - 104
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 109 of 172

1 Amazon’s Marketplace. Without Prime eligibility,
2
Ready access to online shoppers is a

3

4 critical aspect of online marketplace services, but Amazon effectively conditions access to a
5 substantial portion of its shoppers on sellers also buying FBA services.
2.

6
361.

7

Amazon requires sellers to use FBA to obtain Prime eligibility

Amazon requires sellers to use FBA for their products to obtain Prime eligibility,

8 even though many sellers would prefer to use an alternative fulfillment method. As the former
9 head of FBA put it,
10
362.

11

Mr. Bezos explained in his 2014 letter to Amazon shareholders that “FBA is so

12 important because it is glue that inextricably links Marketplace and Prime. Thanks to FBA,
13 Marketplace and Prime are no longer two things. . . . Their economics . . . are now happily and
14 deeply intertwined.”
363.

15

One internal Amazon study found that

16
According to another internal study,

17
18

In other

19
20 words,
21
22
23
24
COMPLAINT - 105
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 110 of 172

3.

1

By forcing sellers to use FBA for their products to be Prime eligible,

2

Amazon raises sellers’ costs of selling on multiple marketplaces,

3

stifling competition in both relevant markets

4

364.

By tying Prime eligibility to FBA, Amazon restricts sellers’ choices about which

5 fulfillment provider they use, stifling multihoming and thus harming competition in both the
6 online marketplace services and online superstore markets. Many sellers would prefer to use a
7 single fulfillment network for all their online orders, on and off Amazon. Indeed, as Amazon’s
8 Vice President of Worldwide Selling Partner Services reportedly recognized recently, “[a] seller
9 doesn’t want to have two sets of supply-chain services, one that’s for Amazon and one that’s for
10 someone else.” By forcing sellers to use FBA for their products to be Prime eligible, Amazon
11 functionally forecloses that option for sellers.
12

365.

Without Amazon’s coercion, sellers could more easily offer their products to

13 shoppers via multiple outlets, including other online superstores and marketplaces. They could
14 also use a single fulfillment provider of their choice and pass associated savings on to their
15 customers across all online sales channels, including Amazon. Amazon’s rivals, in turn, could
16 gain scale by attracting new sellers to their marketplaces and offering new selection to shoppers.
17 Amazon fears that world, and so it uses Prime eligibility to foreclose it from coming to pass.
18

366.

Amazon’s conduct blocks competition for sellers and the ability of online

19 superstores to gain those sellers’ product selection in two interrelated ways. First, Amazon
20 forces sellers who want to make Prime-eligible offers on Amazon and to sell through other sales
21 channels to use two duplicative fulfillment operations instead of saving costs by consolidating
22 inventory with a single fulfillment provider. Second, Amazon forecloses a significant volume of
23 orders from independent fulfillment providers by making FBA effectively the only fulfillment
24 option available for Prime-eligible orders. By essentially forcing sellers to use FBA, Amazon
COMPLAINT - 106
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 111 of 172

1 deprives independent fulfillment companies of an important source of scale that is necessary to
2 develop efficient fulfillment networks. Sellers are less likely to commit inventory to independent
3 fulfillment providers that do not have the scale to efficiently serve their needs, and without cost
4 effective and efficient fulfillment operations, sellers are less likely to sell across multiple online
5 marketplaces. Thus, Amazon’s tying of Prime eligibility to FBA usage raises the cost of
6 multihoming, making it harder and more expensive for sellers to sell on alternative online
7 marketplaces and more difficult for online superstores to attract sellers and expand their product
8 selection.
9

367.

These twin mechanisms harm competition in the online retail fulfillment services

10 market while also stifling competition in both relevant markets. They do so by raising the costs
11 Amazon sellers must incur to do business with other online superstores and online marketplace
12 services providers. Some sellers cope by simply not selling anywhere other than Amazon.
13 Others are pressured to pass on higher costs in the form of higher prices, slower shipping speeds,
14 or both. As a result, by tying Prime eligibility to FBA, Amazon reduces product selection
15 available to Amazon’s rivals, thereby degrading quality for shoppers and raising sellers’ costs,
16 which can lead to price increases for shoppers.
a.

17

inventory to sell across multiple sales channels

18
19

Amazon raises sellers’ costs by forcing them to split their

368.

Because Amazon forces sellers to use FBA to receive Prime eligibility, sellers

20 who do not want to sell solely through Amazon must split their physical inventory by putting
21 inventory for Amazon orders into FBA and inventory for non-Amazon orders in a different
22 fulfillment network, such as one operated by an independent fulfillment provider.
23

369.

Splitting inventory among multiple fulfillment networks raises the costs for sellers

24 to offer products for sale through multiple sales channels by, among other things:
COMPLAINT - 107
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 112 of 172

(a)

1
2

(b)

3
4

(c)

5
6

(d)

7
8

(e)

9
10

and

11
(f)

12
13
14
15

370.

For these reasons, many sellers would prefer to commit all of their inventory to a

16 single independent fulfillment provider of sufficient scale to facilitate sales across Amazon and
17 non-Amazon sales channels.
18

371.

Amazon recognizes that

19
20
21
22

372.
By

23
24
COMPLAINT - 108
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 113 of 172

1 foreclosing these sellers from using a single independent fulfillment provider, Amazon
2 effectively forces these sellers to sell exclusively on Amazon.
3

373.

For sellers who do offer their products across multiple online sales channels,

4 Amazon’s tying Prime eligibility to FBA imposes unnecessary and additional costs that can lead
5 to higher product prices, reduced seller profitability, and fewer sales. This, in turn, reduces
6 sellers’ incentives to offer their products and invest resources into selling on multiple online
7 superstores by purchasing services from multiple online marketplaces.
8

374.

Because most sellers must sell Prime-eligible products on Amazon to be

9 successful, tying Prime eligibility to FBA increases sellers’ costs by forcing them to use multiple
10 fulfillment providers to sell off Amazon. Amazon’s conduct hinders other online marketplaces’
11 ability to attract sellers and impedes online superstores’ ability to offer enough product selection
12 to compete meaningfully with Amazon. This conduct also artificially contributes to converting
13 more shoppers into Prime subscribers.
b.

14

competition and the growth of independent fulfillment providers

15
16

Forcing sellers to use FBA to obtain Prime eligibility impedes

375.

Amazon’s coercive conduct that forces sellers to use FBA forecloses significant

17 volumes of business from independent fulfillment providers that could facilitate seller
18 multihoming across multiple online marketplaces and superstores.
19

376.

By forcing sellers to purchase FBA to ensure that their products are Prime

20 eligible, Amazon artificially walls off a massive volume of Prime-eligible orders from
21 competition, instead funneling it solely into FBA. In so doing, Amazon harms competition in the
22 market for online retail fulfillment services. Amazon’s foreclosure of competition in the online
23 retail fulfillment services market helps maintain Amazon’s monopolies in the online marketplace
24 services and online superstore markets.
COMPLAINT - 109
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 114 of 172

1

377.

Online retail fulfillment services include storing, picking (i.e., retrieving from

2 storage), packaging, and preparing items purchased by shoppers online for delivery. Sellers
3 purchase online retail fulfillment services to complete online orders placed by shoppers.
4

378.

Online retail fulfillment services are discrete and separate from online

5 marketplace services. Online marketplace services enable sellers to offer items for sale to online
6 shoppers, whereas online retail fulfillment services are focused on physically storing and
7 preparing items for delivery to shoppers.
8

379.

These services are offered to sellers at distinct prices and pricing structures

9 compared to online marketplace services. For example, Amazon charges sellers that use its
10 “Professional” plan to access its Marketplace on a monthly basis whether or not any sale is
11 made. But Amazon’s fulfillment fees are based on the item’s size and weight, as well as how
12 long Amazon had to store it before fulfilling the order.
13

380.

Demand for online retail fulfillment services is separate from demand for online

14 marketplace services. Sellers often choose to purchase these services separately. And online
15 retail fulfillment services are frequently provided by distinct suppliers.
16

381.

Providers of online retail fulfillment services must have fulfillment facilities in

17 the United States to timely and reliably serve U.S.-based shoppers. Online retail fulfillment
18 services providers that do not have U.S. fulfillment facilities generally are not substitutable for
19 U.S. online retail fulfillment providers.
20

382.

Amazon, through FBA, is by far the largest U.S. supplier of online retail

21 fulfillment services. In 2020, Amazon fulfilled orders for over

items using more than

22 200 U.S. fulfillment centers.
23

383.

As the sheer size of Amazon’s fulfillment operations suggests, the online retail

24 fulfillment services market benefits from economies of scale. Online retail fulfillment service
COMPLAINT - 110
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 115 of 172

1 providers can ship products faster and cheaper when they can place products closer to the end2 consumer by having a large network of fulfillment centers. These speed and cost savings may be
3 shared with shoppers via faster deliveries and cheaper products.
4

384.

Amazon recognizes that
Amazon measured

5
6
7
8

385.

Independent fulfillment providers, too, benefit from large fulfillment volumes that

9 can help them scale and reduce costs. But by tying Prime eligibility to FBA use, Amazon
10 effectively removes the opportunity for online fulfillment providers to compete for Prime order
11 volumes—locking in those volumes for FBA alone.
12

386.

This foreclosure denies independent fulfillment providers an important source of

13 scale that may contribute to their growth, allow them to take advantage of volume-based cost
14 savings, and help them build the infrastructure necessary to efficiently fulfill orders for products
15 sold online.
16

387.

Unlike Amazon’s FBA, independent fulfillment providers are agnostic about the

17 channel from which sales originate. These independent logistics firms let sellers offer products
18 seamlessly across multiple marketplaces and online superstores.
19

388.

In contrast to independent fulfillment providers, Amazon’s FBA service only

20 fulfills orders placed on Amazon’s Marketplace. Sellers cannot use FBA to fulfill orders off
21 Amazon. To fulfill orders off Amazon, sellers can pay an additional fee for a separate Amazon
22 fulfillment service.
23
24
COMPLAINT - 111
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 116 of 172

389.

1

In a competitive world, the growth of independent fulfillment providers could

2 erode Amazon’s monopoly power in the relevant markets. Successful independent fulfillment
3 providers could foster competition among marketplaces by breaking down the barrier to
4 efficiently selling across marketplaces. That, in turn, could open up rival online superstores’ and
5 online marketplace services providers’ ability to attract sellers’ business and product selection.
390.

6

Amazon’s former head of Global Fulfillment Services internally voiced

7
Another executive

8
9
10
11
12
391.

13

Following conversations with sellers, other Amazon executives confirmed

14
Amazon’s

15
16 former head of Global Fulfillment Services
17
392.

18
19 than

Prime-eligible fulfillment volumes are significant. In 2020, FBA fulfilled more
units, which, if shipped individually, would account for nearly

boxes for

20 every person in the United States. Conditioning Prime eligibility on FBA enrollment has locked
21 in massive volumes of shipments exclusively to Amazon, allowing it to scale its fulfillment
22 network into the behemoth it is today.
23

393.

Independent fulfillment providers’ operations remain far smaller than FBA.

24 These providers fulfill orders for only a few thousand, and often only a few hundred, sellers.
COMPLAINT - 112
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 117 of 172

1 Had independent fulfillment providers been able to compete for Amazon order volumes, they
2 could have won significant business from Amazon’s third-party sellers.
3

394.

Amazon ensures that independent fulfillment providers will stay artificially small

4 by requiring that sellers who want Prime-eligible products use FBA for fulfillment. As a result,
5 Amazon makes some providers’ services comparatively more expensive because they are unable
6 to take full advantage of the economies of scale. Amazon locks in the scale for itself through
7 tying Prime eligibility to use of FBA, and sellers have fewer choices for fulfillment providers.
c.

8

Prime eligibility on sellers’ use of FBA

9
10

Amazon unlawfully maintains its monopolies by conditioning

395.

Through these twin mechanisms—(1) raising the costs for sellers of using

11 multiple sales channels and (2) artificially stunting the growth of independent fulfillment
12 providers—Amazon maintains its monopolies in the online superstore and online marketplace
13 services markets by denying rivals the ability to gain the scale needed to compete meaningfully
14 against Amazon.
15

396.

16
Some sellers on Amazon that might otherwise also sell off

17

18 Amazon choose not to due to the associated logistics and administrative costs, while other sellers
19 offer only certain products to other online stores. Sellers must effectively accept Amazon’s
20 burdensome terms, and Amazon’s rivals are thus deprived of the opportunity to meaningfully
21 compete for sellers. By tying a product’s Prime eligibility to the seller’s use of FBA for that
22 product, Amazon suppresses competition for sellers’ product selection and for online shoppers.
23
24
COMPLAINT - 113
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 118 of 172

4.

1

Amazon’s use of Seller Fulfilled Prime underscores the harms to

2

competition caused by Amazon’s conditioning Prime eligibility on use

3

of FBA

4

397.

Amazon’s fear of a world in which unrestricted seller choice leads to increased

5 competition is grounded in experience. For a period of time, Amazon temporarily allowed
6 sellers to use their own fulfillment solution for Prime-eligible orders. When Amazon realized it
7 had lowered a barrier to competition, it quickly reversed course.
8

398.

In 2015, Amazon briefly experimented with allowing a small subset of sellers to

9 fulfill Prime-eligible orders without using FBA. That year, Amazon launched a program it later
10 called Seller Fulfilled Prime (“SFP”), which was
SFP let

11

12 sellers make Prime-eligible offers without purchasing FBA services. Though SFP was popular
13 with sellers, Amazon shuttered SFP enrollment in 2019
14
15

399.

From SFP’s launch, Amazon

400.

SFP was an immediate hit among sellers. In the program’s first full year, Amazon

16
17
18

19 onboarded more than

sellers. At its peak, approximately

sellers had enrolled in

20 SFP. Yet even these enrollment numbers understate seller demand for SFP, because Amazon
21
22

401.

Sellers enrolled in SFP

23
24
COMPLAINT - 114
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 119 of 172

1

402.

Mr. Bezos highlighted SFP in his 2015 letter to shareholders, explaining that

2 Amazon had “invited sellers . . . to be part of the Prime program and ship their own orders at
3 Prime speed directly.” Mr. Bezos described SFP as a win-win for sellers and shoppers, writing,
4 “[t]hose [enrolled] sellers have already seen a significant bump in sales, and the program has led
5 to hundreds of thousands of additional items that are available to Prime customers via free two6 day or next-day shipping.” Though SFP was benefitting at least some shoppers and sellers,
7 internally certain Amazon executives
Amazon executives

8

These executives

9
10
11
12

403.

Amazon

404.

A few months later,

13
14
15
16
17
18
19
20
21
But Amazon decided to prioritize excluding rivals and foreclosing

22

23 competition, even if it came at a cost to Amazon’s customers.
24
COMPLAINT - 115
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 120 of 172

1

405.

Some Amazon employees had suggested

2
3
4
Amazon wanted to

5

6 minimize any potential backlash from SFP sellers, so in 2019 Amazon let sellers already in SFP
7 remain while blocking all new enrollment. Critically, Amazon communicated to those sellers
8 who were already in SFP that it expected them to fulfill orders themselves, rather than using
9 independent fulfillment providers.
10
11

406.

Some sellers who still participate in SFP report frustrations with Amazon’s

12 administration of the program, including concerns that Amazon holds SFP sellers to stricter
13 delivery benchmarks than FBA. And despite Amazon’s promise that SFP products will receive
14 the Prime badge, Amazon does not consistently display the Prime badge on SFP products.
15 Amazon’s search filter that allows shoppers to view only Prime-eligible products suppresses
16 Prime offers fulfilled through SFP.
17

407.

Sellers continue to want Prime eligibility uncoupled from the coerced purchase of

18 FBA services.
19
20
21

408.

Conditioning Prime eligibility on FBA usage—and thus preventing sellers from

22 using independent fulfillment providers—is not necessary to ensure Prime subscribers receive
23 quality shipping. Amazon’s internal analyses showed that
24
COMPLAINT - 116
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 121 of 172

For example,

1
2
3

Had Amazon genuinely cared about

4

5 improving shipping speeds, it would have encouraged SFP sellers to use independent fulfillment
6 providers instead of shuttering SFP to deliberately impede those providers’ growth.
7

409.

Amazon recently announced plans to reopen SFP enrollment. According to

8 Amazon, to enroll in the program, sellers would need to meet rigorous pre-qualification criteria
9 to enroll in a 30-day SFP trial, after which Amazon will determine whether they may participate
10 in SFP. Amazon’s communications about upcoming changes to the SFP program continue to
11 indicate that sellers would need to fulfill Prime orders themselves, without using independent
12 fulfillment providers. As of this filing, SFP enrollment remains closed.
13

C.

Exclusionary Effect

14
15

Amazon’s Anticompetitive Tactics Work Together To Amplify Their Overall

410.

The cumulative impact of Amazon’s unlawful conduct is greater than the sum of

16 its parts.
17

411.

While each anticompetitive tactic independently violates the antitrust laws, all

18 work together in mutually reinforcing ways to stifle even an equally or more efficient
19 competitor’s ability to respond to any one of them. As a result, the interrelated nature of
20 Amazon’s overall course of conduct amplifies the exclusionary effects of each individual aspect,
21 further entrenching Amazon’s monopoly power in and across both relevant markets.
22

412.

Both relevant markets exhibit network effects and scale economies that render

23 gaining scale and competitive momentum especially critical. Yet each element of Amazon’s
24 course of conduct works together to artificially limit rivals’ ability to grow, gather momentum,
COMPLAINT - 117
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 122 of 172

1 and gain sufficient scale to meaningfully compete against Amazon. Consequently, in these
2 relevant markets, the combined exclusionary effect of Amazon’s conduct is especially pernicious
3 and acute.
4

413.

The various elements of Amazon’s anti-discounting conduct—algorithmically

5 punishing sellers for offering lower prices elsewhere, contractually restraining ASB sellers, and
6 systematically disciplining rivals via its first-party anti-discounting algorithm—work together to
7 suppress competition in both relevant markets, thereby preventing even an equally or more
8 efficient rival from attracting a critical mass of either shoppers or sellers.
9

414.

Amazon’s requirement that sellers use FBA to obtain Prime eligibility for their

10 products amplifies those effects. By further limiting sellers’ alternatives to Amazon, Amazon’s
11 coercive fulfillment conduct intensifies the exclusionary effect of its anti-discounting conduct.
12 In a world where rivals and potential rivals were not artificially prevented from gaining the scale
13 needed to meaningfully compete against Amazon, Amazon’s seller punishments would pose less
14 of a threat to sellers’ survival. But Amazon’s coercive FBA conduct works in tandem with its
15 anti-discounting conduct to foreclose that world. The resulting lack of comparable alternatives
16 to Amazon intensifies the severity of Amazon’s anti-discounting punishments, giving those
17 punishments—and even the threat of those punishments—greater force.
18

415.

Amazon’s anti-discounting conduct, in turn, amplifies the exclusionary effects of

19 tying Prime eligibility to sellers’ use of FBA. Amazon’s FBA conduct alone prevents sellers
20 from using alternatives to FBA to fulfill Prime-eligible orders on Amazon and lowers the
21 attractiveness of selling off Amazon because it raises sellers’ costs, which are often passed on to
22 shoppers. Amazon’s anti-discounting conduct further reduces the appeal of selling off Amazon
23 by threatening sellers with the risk of losing their Amazon sales if Amazon detects a lower price
24 elsewhere and suppressing the effectiveness of marketplaces’ attempts to compete on price by
COMPLAINT - 118
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 123 of 172

1 lowering their fees to sellers. As a result, sellers are further deterred from bringing additional
2 selection to rival marketplaces, prices for products on rival marketplaces are higher, and
3 independent fulfillment providers are artificially stunted. Collectively, this impedes an equally
4 or more efficient rival from being able to meaningfully compete with Amazon.
5 VII.

AMAZON

6
7

416.

8
9
10
11

417.

Project Nessie is an algorithm

12 Aware that this scheme belies its public claim that it “seek[s] to be Earth’s most customer-centric
13 company,”
14
15
16

418.

17
18
19

A.

Project Nessie

20
21

419.

22
23
24
COMPLAINT - 119
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 124 of 172

1
2
3
4
5

420.

Amazon used these findings to create Project Nessie, an algorithmic tool

6
7
8
9

(discussed in Part VI.A.3, above),

10
11
12
13
14

421.

15
16
17
18
19

422.

20
21
22
23
24
COMPLAINT - 120
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 125 of 172

1

423.

2
3
4
5
6
7
8
9

424.

Amazon used Project Nessie to

10
11
12

425.

13
14
15
16
17

B.

Amazon Has

Project Nessie

426.

Amazon typically ran Project Nessie

18
19
20
21
22

427.

23
24
COMPLAINT - 121
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 126 of 172

1
2
3

428.

4
5

429.

6
7
8

430.

9
10
11

431.

12
13
14
15
16
17

432.

18
19
20
21 VIII. AMAZON’S CONDUCT HARMS COMPETITION AND CONSUMERS
22

433.

Amazon’s unfair and monopolistic conduct has broken the competitive process.

23 Amazon’s anticompetitive conduct closes off each major avenue of competition—including
24 price, product selection, quality, and innovation—in both relevant markets. Amazon’s
COMPLAINT - 122
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 127 of 172

1 monopolistic conduct also harms consumers in both markets, shoppers and sellers alike, by
2 depriving them of the benefits of open, fair competition and allowing Amazon to exploit its
3 monopoly power without facing the competitive checks of a free enterprise system.
4

434.

The presence of scale economies and network effects in both relevant markets

5 means that a firm must be able to gain scale in order to compete effectively. But Amazon has
6 artificially suppressed rivals’ ability to attract business, gain momentum, and grow.
7

435.

Amazon’s conduct interrupts, impedes, and distorts the normal give-and-take of a

8 healthy market by blocking off every major avenue of competition—including price, product
9 selection, quality, and innovation—that rivals and potential rivals would ordinarily use to
10 compete on the merits for shoppers’ and sellers’ business in the relevant markets for online
11 superstores and online marketplace services.
12

436.

For example, Amazon’s anti-discounting conduct leverages both its first-party

13 Retail and its third-party Marketplace business units to suppress competition. Amazon’s first14 party anti-discounting algorithm disciplines rivals from undercutting Amazon’s prices, and
15 Amazon punishes third-party sellers for offering lower prices on other platforms. Without the
16 ability to attract either shoppers or sellers through lower prices, rivals are unable to gain a critical
17 mass of customers and meaningfully compete against Amazon. At the same time, Amazon’s
18 coercive fulfillment conduct both artificially stunts the growth of independent fulfillment
19 providers and artificially raises the costs that sellers face when seeking to multihome. This limits
20 seller multihoming and thereby suppresses Amazon’s rivals’ ability to compete for sellers by
21 offering better terms and for shoppers by offering additional product selection.
22

437.

Together, Amazon’s exclusionary course of conduct works to suppress

23 competition in both relevant markets, foreclosing even an innovative, high-quality rival or
24 potential rival from competing on the merits.
COMPLAINT - 123
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 128 of 172

1

438.

Amazon’s conduct also harms consumers in both relevant markets. For example,

2 Amazon’s conduct has artificially inflated prices for both shoppers and sellers, degraded the
3 quality of online superstores for shoppers and of online marketplace services for sellers, reduced
4 output in both relevant markets, hindered shoppers from comparison-shopping for the best deals,
5 suppressed the flow of useful price and quality information to shoppers, stifled sellers’ ability to
6 gain additional business by offering lower prices, restricted sellers’ freedom to choose to
7 multihome across their preferred sales channels, reduced consumer choice for both shoppers and
8 sellers by yielding a less diverse set of competitive options, and stripped consumers in both
9 relevant markets of the benefits of innovation.
10

439.

Amazon’s anticompetitive conduct is not reasonably necessary to achieve any

11 cognizable procompetitive benefits. The anticompetitive harm from those practices outweighs
12 any procompetitive benefits, and Amazon could reasonably achieve any procompetitive goals
13 through less restrictive alternatives.
14

440.

Amazon’s unlawful conduct has caused cumulative and compounding harm over

15 time. Through its years-long course of illegal conduct, Amazon has deeply entrenched its
16 monopolies in both relevant markets and further widened the gulf between Amazon and
17 everyone else. Particularly given the importance of scale economies and network effects in these
18 markets, Amazon’s conduct has yielded a distorted and stunted competitive landscape.
19

441.

Left unchecked, Amazon will continue to harm competition and maintain its

20 monopoly power over the online superstore market and the market for online marketplace
21 services, causing myriad and widespread harms to shoppers, sellers, and the public—and
22 depriving Americans of the benefits of fair and free competition.
23
24
COMPLAINT - 124
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 129 of 172

1 IX.

VIOLATIONS ALLEGED

2

COUNT I

3

MONOPOLY MAINTENANCE OF THE ONLINE SUPERSTORE MARKET

4

(15 U.S.C. § 45(a))

5

442.

Plaintiff FTC re-alleges and incorporates by reference the allegations in

6 paragraphs 1-441 above.
7

443.

At all relevant times, Amazon has had monopoly power in the online superstore

8 market in the United States.
9

444.

Amazon has willfully maintained its monopoly power through its course of

10 anticompetitive and exclusionary conduct, including Amazon’s anti-discounting practices, which
11 stifle price competition and tend to create an artificial price floor, and Amazon’s practice of
12 coercing sellers who want their products to be Prime eligible into using Fulfillment by Amazon,
13 which makes it more difficult and more expensive for rivals to offer increased product selection.
14

445.

Although each of these acts is anticompetitive in its own right, these interrelated

15 and independent actions have had a cumulative and synergistic effect that has harmed
16 competition and the competitive process.
17

446.

There is no valid procompetitive justification for Amazon’s anticompetitive and

18 exclusionary conduct in the online superstore market.
19

447.

Amazon’s anticompetitive and exclusionary conduct constitutes unlawful

20 monopoly maintenance, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and
21 Section 2 of the Sherman Act, 15 U.S.C. § 2.
22
23
24
COMPLAINT - 125
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 130 of 172

1

COUNT II

2

MONOPOLY MAINTENANCE OF THE

3

ONLINE MARKETPLACE SERVICES MARKET

4

(15 U.S.C. § 45(a))

5

448.

Plaintiff FTC re-alleges and incorporates by reference the allegations in

6 paragraphs 1-447 above.
7

449.

At all relevant times, Amazon has had monopoly power in the worldwide market

8 for online marketplace services for U.S. customers.
9

450.

Amazon has willfully maintained its monopoly power through its course of

10 anticompetitive and exclusionary conduct, including Amazon’s anti-discounting practices, which
11 stifle price competition and tend to create an artificial price floor, and Amazon’s practice of
12 coercing sellers who want their products to be Prime eligible into using Fulfillment by Amazon,
13 which makes it more difficult and more expensive for rivals to offer increased product selection.
14

451.

Although each of these acts is anticompetitive in its own right, these interrelated

15 and independent actions have had a cumulative and synergistic effect that has harmed
16 competition and the competitive process.
17

452.

There is no valid procompetitive justification for Amazon’s anticompetitive and

18 exclusionary conduct in the online marketplace services market.
19

453.

Amazon’s anticompetitive and exclusionary conduct constitutes unlawful

20 monopoly maintenance, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and
21 Section 2 of the Sherman Act, 15 U.S.C. § 2.
22
23
24
COMPLAINT - 126
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 131 of 172

1

COUNT III

2

UNFAIR METHOD OF COMPETITION

3

(15 U.S.C. § 45(a))
454.

4

Plaintiff FTC re-alleges and incorporates by reference the allegations in

5 paragraphs 1-453 above.
455.

6

Amazon’s course of conduct—including Amazon’s anti-discounting practices,

7 which stifle price competition and tend to create an artificial price floor, and Amazon’s practice
8 of coercing sellers who want their products to be Prime eligible into using Fulfillment by
9 Amazon, which makes it more difficult and more expensive for rivals to offer increased product
10 selection—is anticompetitive and exclusionary, and constitutes an unfair method of competition
11 in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
456.

12

There is no valid and cognizable justification for Amazon’s anticompetitive and

13 exclusionary conduct.
14

COUNT IV

15

UNFAIR METHOD OF COMPETITION

16

(15 U.S.C. § 45(a))
457.

17

Plaintiff FTC re-alleges and incorporates by reference the allegations in

18 paragraphs 1-456 above.
19

458.

Amazon has engaged in an unfair method of competition, called Project Nessie,

459.

Amazon designed and used its Project Nessie pricing system

20 that
21
22
23
24
COMPLAINT - 127
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 132 of 172

1

460.

Amazon’s Project Nessie pricing system

2
3

461.

4
5

462.

Amazon’s use of its Project Nessie pricing system is an unfair method of

6 competition in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
7

463.

There is no valid and cognizable justification for Amazon’s use of Project Nessie.

8

COUNT V

9

MONOPOLY MAINTENANCE OF THE ONLINE SUPERSTORE MARKET

10

(15 U.S.C. § 2)

11

464.

State Plaintiffs re-allege and incorporate by reference the allegations in

12 paragraphs 1-463 above.
13

465.

At all relevant times, Amazon has had monopoly power in the online superstore

14 market in the United States.
15

466.

Amazon has willfully maintained its monopoly power through its course of

16 anticompetitive and exclusionary conduct, including Amazon’s anti-discounting practices, which
17 stifle price competition and tend to create an artificial price floor, and Amazon’s practice of
18 coercing sellers who want their products to be Prime eligible into using Fulfillment by Amazon,
19 which makes it more difficult and more expensive for rivals to offer increased product selection.
20

467.

Although each of these acts is anticompetitive in its own right, these interrelated

21 and independent actions have had a cumulative and synergistic effect that has harmed
22 competition and the competitive process.
23
24
COMPLAINT - 128
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 133 of 172

1

468.

Amazon’s conduct has harmed and continues to harm competition, and Plaintiff

2 States have therefore suffered and continue to suffer harm to their general economies and to their
3 residents.
4

469.

There is no valid procompetitive justification for Amazon’s anticompetitive and

5 exclusionary conduct in the online superstore market.
6

470.

Amazon’s anticompetitive and exclusionary conduct constitutes unlawful

7 monopoly maintenance, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2.
8

COUNT VI

9

MONOPOLY MAINTENANCE OF THE

10

ONLINE MARKETPLACE SERVICES MARKET

11

(15 U.S.C. § 2)

12

471.

State Plaintiffs re-allege and incorporate by reference the allegations in

13 paragraphs 1-470 above.
14

472.

At all relevant times, Amazon has had monopoly power in the worldwide market

15 for online marketplace services for U.S. customers.
16

473.

Amazon has willfully maintained its monopoly power through its course of

17 anticompetitive and exclusionary conduct, including Amazon’s anti-discounting practices, which
18 stifle price competition and tend to create an artificial price floor, and Amazon’s practice of
19 coercing sellers who want their products to be Prime eligible into using Fulfillment by Amazon,
20 which makes it more difficult and more expensive for rivals to offer increased product selection.
21

474.

Although each of these acts is anticompetitive in its own right, these interrelated

22 and independent actions have had a cumulative and synergistic effect that has harmed
23 competition and the competitive process.
24
COMPLAINT - 129
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 134 of 172

1

475.

Amazon’s conduct has harmed and continues to harm competition, and Plaintiff

2 States have therefore suffered and continue to suffer harm to their general economies and to their
3 residents.
4

476.

There is no valid procompetitive justification for Amazon’s anticompetitive and

5 exclusionary conduct in the online marketplace services market.
6

477.

Amazon’s anticompetitive and exclusionary conduct constitutes unlawful

7 monopoly maintenance, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2.
8

COUNT VII

9

VIOLATIONS OF CONNECTICUT STATE LAW

10

478.

The State of Connecticut repeats and re-alleges and incorporates by reference

11 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
12

479.

Amazon’s actions alleged in the Complaint violate the Connecticut Antitrust Act

13 (“CAA”), General Statutes § 35-24 et seq.
14

480.

Amazon’s actions alleged in the Complaint constitute monopolization of a part of

15 trade or commerce within the state in violation of Conn. Gen. Stat. § 35-27.
16

481.

The State of Connecticut seeks all remedies available under CAA, including,

17 without limitation, the following:
18

(a) Injunctive and other equitable relief, pursuant to Conn. Gen. Stat. § 35-34;

19

(b) Costs and attorney’s fees, pursuant to Conn. Gen. Stat. § 35-34; and

20

(c) Other remedies as the Court may deem appropriate under the facts and
circumstances of the case.

21
22

482.

Amazon’s actions as alleged herein also constitute unfair methods of competition

23 and/or unfair or deceptive acts or practices in trade or commerce in violation of the Connecticut
24 Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110b et seq.
COMPLAINT - 130
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 135 of 172

1

483.

The State of Connecticut seeks all remedies available under CUTPA, including,

2 without limitation, the following:
3

(a) Disgorgement, pursuant to Conn. Gen. Stat. § 42-110m;

4

(b) Injunctive and other equitable relief, pursuant to Conn. Gen. Stat. § 42-110m;

5

(c) Costs and attorney’s fees, pursuant to Conn. Gen. Stat. § 42-110m; and

6

(d) Other remedies as the Court may deem appropriate under the facts and
circumstances of the case.

7
8

COUNT VIII

9

VIOLATIONS OF MAINE STATE LAW

10

484.

Plaintiff State of Maine repeats and re-alleges and incorporates by reference each

11 and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
12

485.

The aforementioned acts of Amazon violate Section 1102 of the Maine

13 Monopolies and Profiteering Law, 10 M.R.S.A. § 1102.
14

486.

Further, the State of Maine seeks and is entitled to injunctive relief, costs of suit,

15 including necessary and reasonable investigative costs, reasonable experts’ fees and reasonable
16 attorney fees under 10 M.R.S.A. § 1104.
17

COUNT IX

18

VIOLATIONS OF MARYLAND STATE LAW

19

487.

Plaintiff State of Maryland repeats and re-alleges and incorporates by reference

20 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
21

488.

The aforementioned acts of Amazon violate the Maryland Antitrust Act, MD

22 Commercial Law Code, Ann. § 11-201 et seq.
23

489.

Further, Section 11-209(b)(3) provides that the Court may exercise all equitable

24 powers necessary to remove the effects of any violation, including injunction, restitution, and
COMPLAINT - 131
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 136 of 172

1 divestiture. Plaintiff State of Maryland is entitled to costs and reasonable attorney’s fees. MD
2 Commercial Law Code, Ann. §§ 11-209(a)(4), 11-209(b)(3).
3

COUNT X

4

VIOLATIONS OF MICHIGAN STATE LAW

5

490.

Plaintiff State of Michigan repeats and re-alleges and incorporates by reference

6 each and every paragraph and allegation of the Complaint as if fully set forth herein.
7

491.

The acts alleged in the Complaint violate the Michigan Antitrust Reform Act,

8 Mich. Comp. Laws § 445.771, et seq.
9

492.

The acts alleged in the Complaint constitute the establishment, maintenance, or

10 use of a monopoly, or an attempt to establish a monopoly, of trade or commerce in a relevant
11 market by Amazon, for the purpose of excluding or limiting competition or controlling, fixing, or
12 maintaining prices, pursuant to Mich. Comp. Laws § 445.773.
13

493.

Michigan seeks equitable and injunctive relief as authorized by Mich. Comp.

14 Laws § 445.777, including, without limitation, the following:
15

(a) Injunctive or other equitable relief;

16

(b) Costs and fees incurred by Michigan in this suit; and

17

(c) Other remedies as the Court finds necessary to redress and prevent recurrence

18

of each of Amazon’s violations.

19
20
21
22
23
24
COMPLAINT - 132
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 137 of 172

1

COUNT XI

2

VIOLATIONS OF THE NEVADA UNFAIR TRADE PRACTICES ACT

3

494.

Plaintiff State of Nevada repeats and re-alleges and incorporates by reference

4 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
5

495.

As repeatedly alleged supra, Amazon’s monopolistic and anticompetitive conduct

6 produced, and continues to produce, harm to businesses and consumers across the Plaintiff
7 States, including in Nevada. Accordingly, the aforementioned acts and practices by Amazon
8 were, and continue to be, prohibited acts under the Nevada Unfair Trade Practices Act, as
9 provided in Nev. Rev. Stat. § 598A.060.
10

496.

To remedy Amazon’s violations of the Nevada Unfair Trade Practices Act,

11 Plaintiff State of Nevada seeks the following relief:
12

(a) Injunctive relief to permanently prevent and restrain Amazon’s monopolistic

13

and anticompetitive conduct, pursuant Nev. Rev. Stat. § 598A.070(c)(1);
(b) Equitable relief, and specifically disgorgement, pursuant to Nev. Rev. Stat.

14

§ 598A.070(c)(4); and

15

(c) Any other equitable relief the Court considers appropriate and has the

16

discretion to award pursuant to Nev. Rev. Stat. § 598A.090(4).

17
18

COUNT XII

19

VIOLATION OF THE NEW JERSEY ANTITRUST ACT

20

(MONOPOLY MAINTENANCE)

21

497.

Plaintiff State of New Jersey repeats and realleges and incorporates by reference

22 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
23

498.

The New Jersey Antitrust Act, N.J.S.A. 56:9-4(a), states:

24
COMPLAINT - 133
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 138 of 172

2

It shall be unlawful for any person to monopolize, or attempt to monopolize, or to
combine or conspire with any person or persons, to monopolize trade or
commerce in any relevant market within this State.

3

499.

1

In the operation of its business, Amazon engaged in numerous commercial

4 practices that violate the New Jersey Antitrust Act, N.J.S.A. 56:9-1 to -19, including
5 monopolizing or attempting to monopolize trade or commerce in the online superstore market
6 and the market for online marketplace services within the State of New Jersey, in violation of
7 N.J.S.A. 56:9-4.
8

500.

Each violation of the New Jersey Antitrust Act by Amazon constitutes a separate

9 unlawful practice and violation, under N.J.S.A. 56:9-16.
10

501.

Plaintiff State of New Jersey seeks all remedies available under the New Jersey

11 Antitrust Act, N.J.S.A. 56:9-1 to -19, including, without limitation, the following:
(a) Injunctive and other equitable relief, pursuant to N.J.S.A. 56:9-7 and N.J.S.A.

12

56:9-10(a);

13
14

(b) Costs and attorney’s fees, pursuant to N.J.S.A. 56:9-12; and

15

(c) Other remedies as the Court may deem appropriate and the interests of justice
may require.

16
17

COUNT XIII

18

VIOLATION OF THE NEW JERSEY CONSUMER FRAUD ACT (“CFA”)

19

(COMMERCIAL PRACTICES IN VIOLATION OF STATE AND FEDERAL LAW)

20

502.

Plaintiff State of New Jersey repeats and realleges and incorporates by reference

21 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
22

503.

23

In an action brought by the Attorney General, any commercial practice that
violates State or federal law is conclusively presumed to be an unlawful practice
under [N.J.S.A. 56:8-2] . . . .

24

The CFA, N.J.S.A. 56:8-4(b), states:

COMPLAINT - 134
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 139 of 172

1

504.

In the operation of its business, Amazon engaged in numerous commercial

2 practices that violate the New Jersey Antitrust Act, including, but not limited to, N.J.S.A. 56:9-4,
3 monopolizing, or attempting to monopolize a part of trade or commerce within the state.
4

505.

In the operation of its business, Amazon engaged in monopolization, or attempted

5 monopolization of a part of trade or commerce, in violation of Section 2 of the Sherman Act, 15
6 U.S.C. § 2.
7

506.

Each violation of New Jersey and/or federal law by Amazon, on or after August 5,

8 2022, constitutes a separate unlawful practice and violation of the CFA, N.J.S.A. 56:8-2, under
9 N.J.S.A. 56:8-4(b).
10

507.

Plaintiff State of New Jersey seeks all remedies available under the CFA, N.J.S.A.

11 56:8-1 to -227, including, without limitation, the following:
(a) Disgorgement of all profits Amazon derived as a result of the conduct alleged

12

herein, pursuant to N.J.S.A. 56:8-8;

13
14

(b) Injunctive and other equitable relief, pursuant to N.J.S.A. 56:8-8;

15

(c) Costs and attorney’s fees, pursuant to N.J.S.A. 56:8-11 and N.J.S.A. 56:8-19;
and

16

(d) Other remedies as the Court may deem appropriate and the interests of justice

17

may require.

18
19

COUNT XIV

20

VIOLATION OF THE NEW JERSEY CFA BY DEFENDANT

21

(UNCONSCIONABLE COMMERCIAL PRACTICES BY DEFENDANT)

22

508.

Plaintiff State of New Jersey repeats and realleges and incorporates by reference

23 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
24

509.

The CFA, N.J.S.A. 56:8-2, prohibits:

COMPLAINT - 135
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 140 of 172

4

The act, use or employment by any person of any unconscionable commercial
practice, deception, fraud, false pretense, false promise, misrepresentation, or the
knowing concealment, suppression, or omission of any material fact with intent
that others rely upon such concealment, suppression or omission, in connection
with the sale or advertisement of any merchandise or real estate, or with the
subsequent performance of such person as aforesaid, whether or not any person
has in fact been misled, deceived or damaged thereby . . . .

5

510.

1
2
3

The CFA defines “sale” as including “any sale, rental or distribution, offer for

6 sale, rental or distribution or attempt directly or indirectly to sell, rent or distribute . . . .”
7 N.J.S.A. 56:8-1(e).
8

511.

The CFA defines “merchandise” as “any objects, wares, goods, commodities,

9 services or anything offered, directly or indirectly to the public for sale.” N.J.S.A. 56:8-1(c).
10

512.

At all relevant times, Amazon has engaged in the advertisement, offer for sale,

11 and sale of merchandise within the meaning of N.J.S.A. 56:8-1(c).
12

513.

In the operation of its businesses, Amazon engaged in unconscionable

13 commercial practices and deception, and made misrepresentations, in violation of N.J.S.A. 56:814 2, including, but not limited to, the following:
(a) Raising, maintaining and stabilizing the prices of products in its online

15

superstore market at artificially high levels;

16

(b) Representing that it “seek[s] to be the Earth’s most customer-centric

17
18

company” and creating and perpetuating a reputation for having low or the

19

lowest prices,
to the detriment of consumers and for reasons unrelated to cost,

20

supply, and demand; and

21

(c) Depriving consumers of diversity of selection and free and open markets.

22
23

514.

Each unconscionable commercial practice, misrepresentation, and act of

24 deception constitutes a separate violation under the CFA, N.J.S.A. 56:8-2.
COMPLAINT - 136
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 141 of 172

1

515.

Plaintiff State of New Jersey seeks all remedies available under the CFA, N.J.S.A.

2 56:8-1 to -227, including, without limitation, the following:
3

(a) Injunctive and other equitable relief, pursuant to N.J.S.A. 56:8-8;

4

(b) Costs and attorney’s fees, pursuant to N.J.S.A. 56:8-11 and N.J.S.A. 56:8-19;
and

5

(c) Other remedies as the Court may deem appropriate and the interests of justice

6

may require.

7
8

COUNT XV

9

VIOLATIONS OF NEW YORK STATE LAW

10

516.

Plaintiff State of New York repeats and re-alleges and incorporates by reference

11 each and every paragraph and allegation of this Complaint as if fully set forth herein.
12

517.

Amazon’s aforementioned acts and practices alleged in the Complaint violate

13 Section 63(12) of New York’s Executive Law, in that Amazon engaged in repeated and/or
14 persistent illegal acts—violations of Section 2 of the Sherman Act and Section 5 of the FTC
15 Act—in the carrying on, conducting, or transaction of business within the meaning and intent of
16 Executive Law Section 63(12).
17

COUNT XVI

18

VIOLATIONS OF OKLAHOMA STATE LAW

19

518.

Plaintiff State of Oklahoma repeats and re-alleges and incorporates by reference

20 each and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
21

519.

Amazon was at all times relevant hereto engaged in trade and commerce within

22 the State of Oklahoma.
23

520.

The acts alleged in the Complaint constitute violations of the Oklahoma Antitrust

24 Reform Act, 79 O.S. §§ 201, et seq.
COMPLAINT - 137
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 142 of 172

(a) The acts alleged in the Complaint constitute unlawful monopolization of a

1
2

part of trade or commerce in a relevant market within the State of Oklahoma

3

pursuant to 79 O.S. § 203.

4

521.

Plaintiff State of Oklahoma seeks relief under the Oklahoma Antitrust Reform

5 Act, 79 O.S. §§ 201, et seq., including, without limitation, the following:
6

(a) Injunctive and other equitable relief pursuant to 79 O.S. § 205;

7

(b) Disgorgement and restitution pursuant to 79 O.S. § 205;

8

(c) Costs and attorney’s fees pursuant to 79 O.S. § 205; and

9

(d) Other remedies as the Court may deem appropriate under the facts and
circumstances of the case.

10
11

522.

The acts alleged in the Complaint also constitute violations of the Oklahoma

12 Consumer Protection Act, 15 O.S. §§ 751, et seq.
13

(a) Amazon is a person within the meaning of 15 O.S. § 752;

14

(b) The acts alleged in the Complaint occurred in connection with consumer
transactions within the meaning of 15 O.S. § 752; and

15

(c) The acts alleged in the Complaint constitute unfair or deceptive trade

16
17

practices, within the meaning of 15 O.S. § 752, and were committed in

18

violation of 15 O.S. § 753.

19

523.

Plaintiff State of Oklahoma seeks relief under the Oklahoma Consumer

20 Protection Act, 15 O.S. §§ 751, et seq., including, without limitation, the following:
21

(a) Injunctive and other equitable relief pursuant to 15 O.S. § 756.1;

22

(b) Disgorgement and restitution pursuant to 79 O.S. § 756.1;

23

(c) Costs and attorney’s fees pursuant to 15 O.S. § 761.1; and

24
COMPLAINT - 138
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 143 of 172

(d) Other remedies as the Court may deem appropriate under the facts and

1

circumstances of the case.

2
3

COUNT XVII

4

VIOLATIONS OF OREGON STATE LAW

5

524.

Plaintiff State of Oregon, acting by and through its Attorney General, Ellen

6 Rosenblum (the “State of Oregon”), repeats and re-alleges and incorporates by reference each
7 and every preceding paragraph and allegation of this Complaint as if fully set forth herein.
8

525.

The acts alleged in the Complaint also constitute violations of the Oregon

9 Antitrust Law, Oregon Revised Statutes (“ORS”) 646.705 to ORS 646.836. These violations had
10 impacts within the State of Oregon and substantially affected the people of Oregon.
11

526.

The State of Oregon appears in its sovereign or quasi-sovereign capacities and

12 under its statutory, common law, and equitable powers pursuant to Section 4 of the Sherman Act,
13 15 U.S.C. § 4, Section 16 of the Clayton Act, 15 U.S.C. § 26, and the Oregon Antitrust Law
14 including ORS 646.760 and ORS 646.770. The State of Oregon seeks equitable and injunctive
15 relief under federal law and the Oregon Antitrust Law, including, without limitation, the
16 following:
17
18
19
20
21

(a) Equitable relief pursuant to federal law including Section 4 of the Sherman
Act, 15 U.S.C. § 4, and pursuant to state law including ORS 646.770;
(b) Injunctive relief pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26,
ORS 646.760, and ORS 646.770;
(c) The cost of suit, including expert witness fees, costs of investigation, and

22

attorney’s fees, pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26,

23

ORS 646.760, and ORS 646.770; and

24
COMPLAINT - 139
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 144 of 172

(d) Other remedies as the Court may deem appropriate under the facts and

1

circumstances of the case.

2
3

COUNT XVIII

4

VIOLATIONS OF PENNSYLVANIA STATE LAW

5

A.

Pennsylvania’s Unfair Trade Practices And Consumer Protection Law

6

527.

Plaintiff Commonwealth of Pennsylvania repeats and re-alleges and incorporates

7 by reference each and every paragraph and allegation of this Complaint as if fully set forth
8 herein.
528.

9

Amazon’s lines of business ranging from online retail, media, cloud computing,

10 grocery stores, advertising and logistics and operational services are offered to consumers
11 through their substantial online presence as well as physical locations in the case of grocery
12 stores. By engaging in the conduct more fully described herein with respect to these products
13 and services, Amazon is engaging in trade or commerce that has directly or indirectly harmed the
14 Commonwealth of Pennsylvania and Pennsylvania consumers within the meaning of 73 P.S.
15 § 201-2(3) of the Pennsylvania Unfair Trade Practices and Consumer Protection Law
16 (“PUTPCPL”).
529.

17

The Pennsylvania Attorney General has reason to believe that Amazon is using or

18 is about to use any method, act or practice in violation of 73 P.S. § 201-3 and it is in the public
19 interest to prevent and restrain the use of such methods, acts or practices under 73 P.S. § 201-4.
1.

20

Unfair methods of competition and unfair acts or practices under
PUTPCPL

21
530.

22

Plaintiff Commonwealth of Pennsylvania repeats and re-alleges and incorporates

23 by reference each and every paragraph and allegation of the Complaint as if fully set forth
24 herein.
COMPLAINT - 140
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 145 of 172

1

531.

Regardless of the nature or quality of Amazon’s aforementioned acts or practices

2 on the competitive process or competition, Amazon’s conduct has been otherwise unfair or
3 unconscionable because they offend public policy as established by statutes, the common law, or
4 otherwise, are immoral, unethical, oppressive, unscrupulous, or substantially injurious to the
5 Commonwealth of Pennsylvania and consumers.
6

532.

Amazon’s unfair conduct has resulted in the Commonwealth and consumers being

7 substantially injured by paying more for products than they otherwise would have in a free and
8 open market.
9

533.

Amazon’s impairment of choice and the competitive process has had the

10 following effects: (1) competition in the online superstore market and the market for online
11 marketplace services has been restrained, suppressed and eliminated throughout Pennsylvania;
12 (2) online superstore market prices and the market for online marketplace services prices have
13 been raised, maintained and stabilized at artificially-high levels throughout Pennsylvania; (3)
14 Commonwealth of Pennsylvania and consumers have been deprived of free and open markets;
15 and (4) Commonwealth of Pennsylvania and consumers have paid supra-competitive, artificially
16 inflated prices for online superstore products and online marketplace services.
17

534.

Amazon’s impairment of choice and the competitive process have caused the

18 Commonwealth of Pennsylvania and consumers to suffer and to continue to suffer loss of money
19 by means of Amazon’s use or employment of unfair methods of competition and/or unfair acts or
20 practices as set forth above.
21

535.

Amazon’s conduct more fully described herein is unlawful pursuant to 73 P.S.

22 § 201-3.
23

536.

The aforesaid methods, acts or practices constitute unfair methods of competition

24 and/or unfair acts or practices within their meaning under Section 2(4) of the PUTPCPL,
COMPLAINT - 141
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 146 of 172

1 including, but not limited to, “Engaging in any other fraudulent or deceptive conduct which
2 creates a likelihood of confusion or of misunderstanding” in violation of 73 P.S. § 201-2(4)(xxi).
3

537.

The above-described conduct created the likelihood of confusion and

4 misunderstanding and exploited unfair advantage of the Commonwealth of Pennsylvania and
5 consumers seeking to exercise a meaningful choice in markets expected to be free of impairment
6 to the competitive process and thus constitutes an unfair method of competition through one or
7 more of the following:
(a) Violating Section 2 of the Sherman Act, 15 U.S.C. § 2, through willfully

8

maintaining its monopoly power over the online superstore market as set forth

9

in the preceding counts;

10
11

(b) Violating Section 2 of the Sherman Act, 15 U.S.C. § 2, through willfully

12

maintaining its monopoly power over the market for online marketplace

13

services as set forth in the preceding counts;

14

(c) Violating Section 5 of the Federal Trade Commission Act, 15 U.S.C § 45(a);

15

(d) Violating Pennsylvania antitrust common law through willfully maintaining
its monopoly power over the online superstore market;

16
17

(e) Violating Pennsylvania antitrust common law through willfully maintaining

18

its monopoly power over the market for online marketplace services; and/or
(f) Engaging in any conduct which causes substantial injury to consumers.

19
20

538.

The above-described conduct substantially injured consumers and the

21 Commonwealth of Pennsylvania.
22

539.

The Commonwealth seeks entry of a permanent injunction restraining Amazon’s

23 unlawful conduct and mandating corrective measures pursuant to 73 P. S. § 201-4.
24
COMPLAINT - 142
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 147 of 172

540.

1

The Commonwealth also requests that the Court direct Amazon to restore to the

2 Commonwealth on behalf of all victims the ill-gotten gains acquired from their inflated pricing
3 during the period of time Amazon’s unlawful conduct took place, pursuant to 73 P. S. § 201-4.1.
2.

4
541.

5

Deceptive acts or practices under PUTPCPL

Plaintiff Commonwealth of Pennsylvania repeats and re-alleges and incorporates

6 by reference each and every paragraph and allegation of the Complaint as if fully set forth
7 herein.
8

542.

Amazon deceptively misrepresented to the Commonwealth of Pennsylvania and

9 consumers that Amazon’s pricing in the online superstore market and the market for online
10 marketplace services was competitive and fair.
11

543.

Amazon deceptively concealed from, or otherwise misled, the Commonwealth of

12 Pennsylvania and consumers as to the actual characteristics of the marketplace being other than
13 competitive and fair.
14

544.

Regardless of the nature or quality of Amazon’s aforementioned acts or practices

15 on the competitive process or competition, Amazon’s conduct has had the tendency or capacity
16 to deceive.
17

545.

Amazon’s deceptive conduct has resulted in the Commonwealth and consumers

18 being substantially injured by paying more for products than they otherwise would have in a free,
19 open, fair, and competitive market.
20

546.

Amazon’s deceptive misrepresentations and failure to disclose material facts have

21 had the following effects: (1) competition in the online superstore market and the market for
22 online marketplace services has been restrained, suppressed and eliminated throughout
23 Pennsylvania; (2) prices for products in the online superstore market and the market for online
24 marketplace services prices have been raised, maintained and stabilized at artificially-high levels
COMPLAINT - 143
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 148 of 172

1 throughout Pennsylvania; (3) Commonwealth of Pennsylvania and consumers have been
2 deprived of free and open markets; and (4) Commonwealth of Pennsylvania and consumers have
3 paid supra-competitive, artificially inflated prices for products in the online superstore market
4 and the market for online marketplace services.
5

547.

Amazon’s impairment of choice and the competitive process has caused the

6 Commonwealth of Pennsylvania and consumers to suffer and to continue to suffer loss of money
7 by means of Amazon’s use or employment of unfair methods of competition and/or unfair acts or
8 practices as set forth above.
9

548.

Amazon’s conduct more fully described herein is unlawful pursuant to 73 P. S.

10 § 201-3.
11

549.

The aforesaid methods, acts or practices constitute deceptive acts or practices

12 within their meaning under Section 2 (4) of the PUTPCPL, including, but not limited to:
(a) “Representing that goods or services have sponsorship, approval,

13
14

characteristics, ingredients, uses, benefits or quantities that they do not have or

15

that a person has a sponsorship, approval, status, affiliation or connection that

16

he does not have” in violation of 73 P.S. § 201-2(4)(v);
(b) “Representing that goods or services are of a particular standard, quality or

17
18

grade, or that goods are of a particular style or model, if they are of another”

19

in violation of 73 P.S. § 201-2(4)(vii);
(c) “Engaging in any other fraudulent or deceptive conduct which creates a

20
21

likelihood of confusion or of misunderstanding” in violation of 73 P.S. § 201-

22

2(4)(xxi).

23

550.

The above-described conduct created the likelihood of confusion and

24 misunderstanding and exploited the deception and lack of disclosure as to the actual
COMPLAINT - 144
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 149 of 172

1 characteristics of the marketplace to the Commonwealth of Pennsylvania and consumers seeking
2 to exercise a meaningful choice in markets expected to be free, open, fair, and competitive and
3 thus constitutes a deceptive act or practice.
551.

4

The Commonwealth seeks entry of a permanent injunction restraining Amazon’s

5 unlawful conduct and mandating corrective measures pursuant to 73 P. S. § 201-4.
552.

6

The Commonwealth also requests that the Court direct Amazon to restore to the

7 Commonwealth on behalf of all victims the ill-gotten gains acquired from their inflated pricing
8 during the period of time Amazon’s unlawful conduct took place, pursuant to 73 P. S. § 201-4.1.
9
10

B.

Common Law Doctrine Against Monopolization

553.

Plaintiff Commonwealth of Pennsylvania repeats and re-alleges and incorporates

11 by reference each and every paragraph and allegation of the Complaint as if fully set forth
12 herein.
13

554.

The conduct to maintain Amazon’s monopolies as set forth in the preceding

14 counts constitutes monopolization in violation of Pennsylvania antitrust common law.
15

555.

Amazon’s conduct in maintaining its monopolies had the following effects: (1)

16 competition in the online superstore market and the market for online marketplace services has
17 been restrained, suppressed and eliminated throughout Pennsylvania; (2) online superstore
18 market prices have been raised, maintained and stabilized at artificially-high levels throughout
19 Pennsylvania; (3) Commonwealth of Pennsylvania and Pennsylvania consumers have been
20 deprived of free and open markets; and (4) Commonwealth of Pennsylvania and Pennsylvania
21 consumers have paid supra-competitive, artificially inflated prices for online superstore products
22 and online marketplace services.
23

556.

The Commonwealth seeks all available equitable relief under Pennsylvania

24 common law.
COMPLAINT - 145
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 150 of 172

1

COUNT XIX

2

VIOLATIONS OF RHODE ISLAND LAW
557.

3

Plaintiff State of Rhode Island repeats and re-alleges and incorporates by

4 reference each and every preceding paragraph and allegation in the Complaint as if fully set forth
5 herein.
6

558.

Amazon’s actions as alleged herein violate the Rhode Island Antitrust Act, R.I.

7 Gen. Laws § 6-36-1, et seq.
8

559.

Plaintiff State of Rhode Island seeks all remedies available under the Rhode

9 Island Antitrust Act, R.I. Gen. Laws §§ 6-36-10, 6-36-11 and 6-36-12 and seeks relief, including
10 but not limited to injunctive relief, equitable monetary relief, fees, costs, and such other relief as
11 this Court deems just and equitable.
12

560.

Amazon’s actions as alleged herein constitute unfair methods of competition and

13 unfair or deceptive acts or practices as defined in the Rhode Island Deceptive Trade Practices
14 Act, R.I. Gen. Laws § 6-13.3-1, et seq.
15

561.

The State of Rhode Island brings this action pursuant to R.I. Gen. Laws § 6-13.1-

16 5, and seeks relief, including but not limited to injunctive relief, equitable monetary relief, fees,
17 costs, and such other relief as this Court deems just and equitable.
18

COUNT XX

19

VIOLATIONS OF WISCONSIN STATE LAW

20

562.

Plaintiff State of Wisconsin repeats and re-alleges and incorporates by reference

21 each and every paragraph and allegation in this Complaint as if fully set forth herein.
22

563.

The aforementioned practices by Defendant are in violation of Wisconsin’s

23 Antitrust Act, Wis. Stat. Ch. § 133.03 et seq. These violations substantially affect the people of
24 Wisconsin and have impacts within the State of Wisconsin.
COMPLAINT - 146
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 151 of 172

564.

1

Plaintiff State of Wisconsin, through its Attorney General and under its antitrust

2 enforcement authority in Wis. Stat. Ch. 133, is entitled to all remedies available under Wis. Stat.
3 §§ 133.03, 133.16, 133.17, and 133.18.
4 X.

REQUEST FOR RELIEF

5

WHEREFORE Plaintiffs request that this Court, as authorized by 15 U.S.C. § 53(b); 15

6 U.S.C. § 26; Conn. Gen. Stat. §§ 35-32(a) and 42-110m; 10 M.R.S.A. § 1104; Maryland
7 Commercial Law Code Ann. § 11-209; Mich. Comp. Laws § 445.777; Nev. Rev. Stat.
8 §§ 598A.070 and 598A.160; N.J.S.A. 56:8-8, 56:8-11, 56:8-19, 56:9-6, 56:9-7, 56:9-10(a), and
9 56:9-12; New York Executive Law § 63(12); Oklahoma Statutes §§ 79-203 and 15-756.1;
10 Oregon Revised Statutes 646.760 and 646.770; Pennsylvania Unfair Trade Practices and
11 Consumer Protection Law, 73 P.S. § 201-4, Pennsylvania common law antitrust doctrine, and the
12 Commonwealth Attorneys Act, 71 P.S. § 732-204(c); R.I. Gen. Laws § 6-36-10; Wis. Stat.
13 §§ 133.03, 133.16, and 133.17; and its own equitable powers, enter final judgment against
14 Amazon, declaring, ordering, and adjudging:
15

1.

that Amazon’s conduct violates Section 5(a) of the FTC Act, 15 U.S.C. § 45(a);

16

2.

that Amazon’s conduct violates Section 2 of the Sherman Act, 15 U.S.C. § 2;

17

3.

that Amazon’s conduct violates the Connecticut Antitrust Act, General Statutes

18

§ 35-24 et seq., and the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat.

19

§ 42-110b et seq.;

20

4.

Profiteering Law, 10 M.R.S.A. § 1102;

21
22
23

that Amazon’s conduct violates Section 1102 of the Maine Monopolies and

5.

that Amazon’s conduct violates the Maryland Antitrust Act, Maryland
Commercial Law Code Ann. § 11-201 et seq.;

24
COMPLAINT - 147
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 152 of 172

1

6.

Laws § 445.771 et seq.;

2
3

7.

that Amazon’s conduct violates the Nevada Unfair Trade Practices Act, Nev. Rev.
Stat. § 598A.060;

4
5

that Amazon’s conduct violates the Michigan Antitrust Reform Act, Mich. Comp.

8.

that Amazon’s conduct violates N.J.S.A. 56:8-1 to –227, and N.J.S.A. 56:9-1 to –
19;

6
7

9.

that Amazon’s conduct violates New York Executive Law § 63(12);

8

10.

that Amazon’s conduct violates the Oklahoma Antitrust Reform Act, 79 O.S.
§§ 201, et seq., and the Oklahoma Consumer Protection Act, 15 O.S. §§ 751, et

9

seq.;

10
11

11.

Statutes 646.705 to 646.836;

12
13

that Amazon’s conduct violates the Oregon Antitrust Law, Oregon Revised

12.

that Amazon’s conduct violates the Pennsylvania Unfair Trade Practices and

14

Consumer Protection Law, 73 P.S. § 201-3, and Pennsylvania common law

15

antitrust doctrine;

16

13.

that Amazon’s conduct violates the Rhode Island Antitrust Act, R.I. Gen. Laws
§ 6-36-1, et seq.;

17
18

14.

that Amazon’s conduct violates Wis. Stat. § 133.03 et seq.;

19

15.

that Amazon is permanently enjoined from engaging in its unlawful conduct;

20

16.

that Amazon is permanently enjoined from engaging in similar or related conduct,
or any conduct with the same or similar purpose and effect;

21
22

17.

any preliminary or permanent equitable relief, including but not limited to

23

structural relief, necessary to redress and prevent recurrence of Amazon’s

24

violations of the law, as alleged herein;
COMPLAINT - 148
CASE NO. _:__-cv-_____

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 153 of 172

1

18.

any preliminary or permanent equitable relief, including but not limited to

2

structural relief, necessary to restore fair competition and remedy the harm to

3

competition caused by Amazon’s violations of the law;

4

19.

applicable law;

5
6

20.

that the Court grant Plaintiff States the costs of suit, including all available fees
and costs; and

7
8

that the Court grant Plaintiff States equitable monetary relief pursuant to all

21.

that the Court grant any additional relief the Court finds just and proper.

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 149

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 154 of 172

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 155 of 172

Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: [phone] (Musser)
[phone] (Takashima)
Email: [e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

1
2
3
4
5
6
7
8
9
10
11
12

Attorneys for Plaintiff
Federal Trade Commission

13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 151

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 156 of 172

1 FOR PLAINTIFF STATE OF NEW YORK:
2
LETITIA JAMES
Attorney General

3
4

Christopher D’Angelo
Chief Deputy Attorney General,
Economic Justice Division

5
6

18

Elinor R. Hoffmann
(pro hac vice forthcoming)
Chief, Antitrust Bureau
[e-mail]
Amy McFarlane
(pro hac vice forthcoming)
Deputy Chief, Antitrust Bureau
[e-mail]
Michael Jo
(pro hac vice forthcoming)
Assistant Attorney General, Antitrust Bureau
[e-mail]
Tal Elmatad
(pro hac vice forthcoming)
Assistant Attorney General, Antitrust Bureau
[e-mail]
James Yoon
(pro hac vice forthcoming)
Assistant Attorney General, Antitrust Bureau
[e-mail]
New York State Office of the Attorney General
28 Liberty Street
New York, NY 10005
[phone]

19

Attorneys for Plaintiff State of New York

7
8
9
10
11
12
13
14
15
16
17

20
21
22
23
24
COMPLAINT - 152

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 157 of 172

1 FOR PLAINTIFF STATE OF CONNECTICUT:
2
WILLIAM TONG
Attorney General

3
4

12

Nicole Demers
(pro hac vice forthcoming)
Deputy Associate Attorney General
[e-mail]
Jeremy Pearlman
Associate Attorney General
[e-mail]
Rahul A. Darwar
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]
Office of the Attorney General of Connecticut
165 Capitol Avenue
Hartford, CT 06016
Tel: [phone]
Email: [e-mail]

13

Attorneys for Plaintiff State of Connecticut

5
6
7
8
9
10
11

14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 153

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 158 of 172

1 FOR PLAINTIFF COMMONWEALTH OF PENNSYLVANIA:
2
MICHELLE A. HENRY
Attorney General of Pennsylvania

3
4

Tracy W. Wertz
(pro hac vice forthcoming)
Chief Deputy Attorney General
[e-mail]
Jennifer A. Thomson
(pro hac vice forthcoming)
Senior Deputy Attorney General
[e-mail]
Norman A. Marden
Senior Deputy Attorney General
[e-mail]
Brandon Sprecher
(pro hac vice forthcoming)
Deputy Attorney General
[e-mail]

5
6
7
8
9
10
11
12

Pennsylvania Office of Attorney General
Strawberry Square, 14th Floor
Harrisburg, PA 17120
Tel: [phone]

13
14
15

Attorneys for Plaintiff Commonwealth of
Pennsylvania

16
17
18
19
20
21
22
23
24
COMPLAINT - 154

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 159 of 172

1 FOR PLAINTIFF STATE OF DELAWARE:
2
KATHLEEN JENNINGS
Attorney General

3
4

Michael A. Undorf
(pro hac vice forthcoming)
Deputy Attorney General
[e-mail]
[phone]

5
6
7

Brian Canfield
(pro hac vice forthcoming)
Deputy Attorney General
[e-mail]
[phone]

8
9
10

Delaware Department of Justice
820 N. French St., 5th Floor
Wilmington, DE 19801

11
12

Attorneys for Plaintiff State of Delaware
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 155

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 160 of 172

1 FOR PLAINTIFF STATE OF MAINE: 
2
AARON M. FREY
Attorney General

Christina M. Moylan 
(pro hac vice forthcoming)
Assistant Attorney General 
Chief, Consumer Protection Division 
[e-mail]

3
4
5
6
7

Michael Devine
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]

8
9

Office of the Maine Attorney General 
6 State House Station
Augusta, ME 04333-0006
[phone]

10
11
12

Attorneys for Plaintiff State of Maine
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 156

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 161 of 172

1 FOR PLAINTIFF STATE OF MARYLAND:
2
ANTHONY G. BROWN
Attorney General

3
4

Schonette J. Walker
Assistant Attorney General
Chief, Antitrust Division
[e-mail]

5
6

Gary Honick
(pro hac vice forthcoming)
Assistant Attorney General
Deputy Chief, Antitrust Division
[e-mail]

7
8
9

Byron Warren
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]

10
11
12

14

Office of the Maryland Attorney General
200 St. Paul Place
Baltimore, MD 21202
[phone]

15

Attorneys for Plaintiff State of Maryland

13

16
17
18
19
20
21
22
23
24
COMPLAINT - 157

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 162 of 172

1 FOR PLAINTIFF COMMONWEALTH OF MASSACHUSETTS:
2
ANDREA JOY CAMPBELL
Attorney General

3
4

MICHAEL MACKENZIE
(pro hac vice forthcoming)
Deputy Chief, Antitrust Division
WILLIAM MATLACK
Chief, Antitrust Division
Office of the Massachusetts Attorney General
One Ashburton Place, 18th Floor
Boston, Massachusetts 02108
[phone]
[e-mail]

5
6
7
8
9

Attorneys for the Commonwealth of
Massachusetts

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
COMPLAINT - 158

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 163 of 172

1 FOR PLAINTIFF STATE OF MICHIGAN:
2
DANA NESSEL
Attorney General

3
4

Jason Evans
(pro hac vice forthcoming)
Division Chief, Corporate Oversight Division
Assistant Attorney General
[e-mail]
Scott Mertens
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]
Jonathan Comish
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]

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9
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11

Michigan Department of Attorney General
525 West Ottawa Street
Lansing, MI 48933
Phone: [phone]
Email: [e-mail]

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14

Attorneys for Plaintiff State of Michigan
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COMPLAINT - 159

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 164 of 172

1 FOR PLAINTIFF STATE OF MINNESOTA:
2
KEITH ELLISON
Attorney General

3
4

JESSICA WHITNEY
JAMES W. CANADAY
Deputy Attorneys General

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6

ZACH BIESANZ
(pro hac vice forthcoming)
Senior Enforcement Counsel
SARAH DOKTORI
(pro hac vice forthcoming)
Assistant Attorney General
Office of the Minnesota Attorney General
445 Minnesota Street, Suite 1400
Saint Paul, Minnesota 55101
[phone]
[e-mail]

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12

Attorneys for Plaintiff State of Minnesota
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COMPLAINT - 160

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 165 of 172

1 FOR PLAINTIFF STATE OF NEVADA:
2
AARON D. FORD
Attorney General

3
4

ERNEST D. FIGUEROA
Consumer Advocate

5

Lucas J. Tucker (NV Bar No. 10252)
(pro hac vice forthcoming)
Senior Deputy Attorney General
[e-mail]
Mark J. Krueger (NV Bar No. 7410)
Chief Deputy Attorney General
[e-mail]
Whitney F. Digesti (NV Bar No. 13012)
Senior Deputy Attorney General
[e-mail]
Office of the Nevada Attorney General
100 N. Carson St.
Carson City, Nevada 89701
Tel: [phone]

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13

Attorneys for Plaintiff State of Nevada
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COMPLAINT - 161

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 166 of 172

1 PLAINTIFF STATE OF NEW HAMPSHIRE:
2

By its attorney,

3

JOHN M. FORMELLA
Attorney General

4
Alexandra C. Sosnowski
(pro hac vice forthcoming)
Assistant Attorney General
Consumer Protection and Antitrust Bureau
New Hampshire Department of Justice
Office of the Attorney General
33 Capitol St.
Concord, NH 03301
[e-mail]
[phone]

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9

Attorneys for Plaintiff State of New Hampshire

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COMPLAINT - 162

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 167 of 172

1 FOR PLAINTIFF STATE OF NEW JERSEY:
2
MATTHEW J. PLATKIN
Attorney General of New Jersey

3

Ana Atta-Alla
(pro hac vice forthcoming)
Deputy Attorney General
[e-mail]
Isabella Pitt
(pro hac vice forthcoming)
Assistant Section Chief – Antitrust
[e-mail]

4
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8

New Jersey Office of the Attorney General
124 Halsey Street, 5th Floor
Newark, NJ 07101
[phone]

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10
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Attorneys for Plaintiff State of New Jersey
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14
15
16
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COMPLAINT - 163

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 168 of 172

1 FOR PLAINTIFF STATE OF NEW MEXICO:
2
RAÚL TORREZ
Attorney General

3
4

Jeffrey Herrera
(pro hac vice forthcoming)
Assistant Attorney General
[e-mail]
Julie Meade
(pro hac vice forthcoming)
Division Director, Consumer and
Environmental Protection Division
[e-mail]
New Mexico Office of the Attorney General
408 Galisteo St.
Santa Fe, NM 87501
Tel: [phone]

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7
8
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10
11

Attorneys for Plaintiff State of New Mexico
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13
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24
COMPLAINT - 164

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 169 of 172

1 FOR PLAINTIFF STATE OF OKLAHOMA:
2
GENTNER DRUMMOND
Attorney General

3
4

Caleb J. Smith, OBA No. 33613
(pro hac vice forthcoming)
Assistant Attorney General
Consumer Protection Unit
Office of the Oklahoma Attorney General
15 West 6th Street
Suite 1000
Tulsa, OK 74119
Tel. [phone]
Fax [phone]
Email: [e-mail]

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8
9
10

Attorneys for Plaintiff State of Oklahoma
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22
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24
COMPLAINT - 165

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 170 of 172

1 FOR PLAINTIFF STATE OF OREGON:
2
ELLEN F. ROSENBLUM
Attorney General

3
4

s/ Timothy D. Smith
TIMOTHY D. SMITH, WSBA No. 44583
Senior Assistant Attorney General
Antitrust and False Claims Unit
Oregon Department of Justice
100 SW Market St
Portland, OR 97201
[phone]
[e-mail]

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6
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8
9

Attorneys for Plaintiff State of Oregon
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11
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22
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24
COMPLAINT - 166

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 171 of 172

1 FOR PLAINTIFF STATE OF RHODE ISLAND:
2
PETER F. NERONHA
Attorney General

3
4

STEPHEN N. PROVAZZA (RI Bar No.
10435) (pro hac vice forthcoming)
Special Assistant Attorney General
Chief, Consumer and Economic Justice Unit
Department of the Attorney General
150 South Main Street
Providence, RI 02903
[e-mail]
[phone]

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6
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8
9

Attorneys for Plaintiff State of Rhode Island
10
11
12
13
14
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20
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22
23
24
COMPLAINT - 167

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]

Case 2:23-cv-01495 Document 1 Filed 09/26/23 Page 172 of 172

1 FOR PLAINTIFF STATE OF WISCONSIN:
2
JOSHUA L. KAUL
Attorney General

3
4

GWENDOLYN J. COOLEY
(pro hac vice forthcoming)
Assistant Attorney General
Wisconsin Department of Justice
Post Office Box 7857
Madison, Wisconsin 53707-7857
[phone]
[phone] (Fax)
[e-mail]

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6
7
8
9

Attorneys for Plaintiff State of Wisconsin
10
11
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24
COMPLAINT - 168

25 CASE NO. _:__-cv-_____
26

FEDERAL TRADE COMMISSION
600 Pennsylvania Avenue, NW
Washington, DC 20580
[phone]