Federal Court Grants Amazon Partial Dismissal Of US FTC's Antitrust Lawsuit

Amazon has won a partial dismissal of a lawsuit filed by the U.S. Federal Trade Commission (FTC), which has accused the e-commerce giant of maintaining illegal monopolies. However, the specifics of the federal court ruling in Seattle, issued on Monday, remain unclear.

The FTC alleges in its lawsuit that Amazon employs anti-competitive tactics to maintain dominance among online marketplaces and superstores. In December, Amazon sought to dismiss the case, stating that the FTC had provided no evidence of consumer harm. U.S. District Judge John Chun of the Western District of Washington presided over the case, Reuters reported.

In 2023, the FTC claimed that Amazon.com was using an algorithm that pushed up the prices paid by U.S. households by more than $1 billion, but the e-commerce platform said that it stopped using the program in 2019.

In a sealed ruling, Judge Chun granted a partial motion to dismiss, allowing the FTC to pursue any claims not permanently dismissed. The case will be tried in two parts, as the judge denied Amazon's request to combine the FTC's evidence of alleged violations with proposed remedies in the same trial.

According to the FTC, Amazon stifles competition by forcing sellers to utilize its advertising and fulfillment services. In a motion to dismiss, Amazon stated that its price-matching and Prime shipping services are beneficial to consumers and enhance its competitiveness against brick-and-mortar retailers.

The case is one of five top lawsuits targeting Big Tech by antitrust regulators at the FTC and the Department of Justice. Apple and Meta are facing lawsuits, while Alphabet, Google's parent company, is battling two cases.

The Amazon lawsuit is particularly significant for FTC Chair Lina Khan, who has long been advocating against the e-commerce giant's power. In 2017, she authored an academic paper highlighting concerns regarding the company's structure and practices in relation to anti-competitive behavior.

Meanwhile, Amazon recently announced that more than 800,000 warehouse workers in the United States will receive an average pay raise of $1.50 per hour starting September, along with complimentary Prime subscriptions beginning next year.

With this pay increase, the company's starting wages for front-line employees increased to $22 an hour, up from the previous $20.50.

The move came as the online retail giant and one of the largest private employers in the U.S. has been under fire for unsafe working conditions in its warehouses, especially during the company's annual Prime Day event and the holiday season.

Amazon had also announced wage hikes for contract delivery drivers to around $22 an hour as part of its $2.1 billion investment this year in a third-party logistics program.