Corporate Counsel Daily, Amazon denied motion for judgment on the pleadings in antitrust suit, (Apr 9, 2025)

By Donielle Tigay Stutland, J.D.

The court rejected Amazon’s argument that the FTC lacks statutory authority to seek a permanent injunction in federal district court without a pending administrative proceeding.

The federal district court in Seattle, Washington denied a motion for judgment on the pleadings in a suit brought by the FTC and 17 states alleging that the Amazon violated federal and state antitrust laws by raising prices, and creating monopolies by, in part, altering organic search results to show paid advertisements or Amazon’s own products and overcharging online sellers. Amazon’s motion argued that the FTC lacks statutory authority to seek a permanent injunction in federal district court without a pending administrative proceeding. The court rejected this argument and denied Amazon’s motion (FTC v. Amazon.Com, Inc., No. 2:23-cv-01495-JHC (W.D. Wash. Apr. 8, 2025)).

Background. The FTC and numerous states accused Amazon of using alleged monopoly power in the online superstore market and market for online marketplace services to engage in anticompetitive practices that suppressed price competition and pushed prices higher across the internet. The government plaintiffs said Amazon created an artificial price floor and penalized sellers that offered lower prices off Amazon. They called this Amazon’s “anti-discounting strategy.” They sued Amazon for allegedly violating Section 2 of the Sherman Act, Section 5(a) of the FTC Act, and state antitrust and consumer protection laws.

The FTC filed a sealed complaint on September 26, 2023, and an amended complaint, which joined Puerto Rico and Vermont, on March 14, 2024. The complaint raised 20 counts, including six counts of violating the FTC Act and the Sherman Act, plus 14 counts of violating various state laws.

On September 30, 2024, the court denied Amazon’s motion to dismiss claims under Section 2 of the Sherman Act and Section 5(a) of the FTC Act, and partially dismissed state law claims. The court also denied the motion to dismiss those counts where the state laws are equivalents of the Sherman Act. These include claims under the laws of Maine, Michigan, Nevada, New Jersey, Oregon, Wisconsin, Connecticut, Oklahoma, and Rhode Island.

Amazon now filed a motion for judgment on the pleadings arguing that the FTC lacks statutory authority to seek a permanent injunction in federal district court without a pending administrative proceeding.

FTC authority. The court began its analysis by noting that the FTC relied on its authority to sue directly in federal district court without a pending administrative proceeding under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b). Additionally, under FTC v. H. N. Singer, Inc., 668 F.2d 1107, 1111 (9th Cir. 1982), the Ninth Circuit held that the second proviso—“Provided further, That in proper cases the Commission may seek, and after proper proof, the court may issue, a permanent injunction”—“gives the Commission the authority to seek, and gives the district court the authority to grant, permanent injunctions in proper cases even though the Commission does not contemplate any administrative proceedings.”

Amazon now argues that Singer is not binding because “a published decision loses its precedential force when subsequent binding precedent has ‘undercut the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable.’” Amazon argues that “Singer is clearly irreconcilable with the Supreme Court’s decision in AMG Cap. Mgmt., LLCv. FTC, 593 U.S. 67 (2021).” In AMG Cap. Mgmt., the FTC sued an individual and his companies for violating Section 5 of the FTC Act in a federal district court without using its own administrative proceedings. In AMG Cap. Mgmt., LLC the Supreme Court looked at whether the words "permanent injunction" within the provision of the FTC Act granted the commission the authority to obtain monetary relief from courts, and concluded that the section in question, when taken as a whole, focuses on injunctive relief rather than monetary relief.

Amazon argued that based on this determination, “holding that subparts 13(b)(1) and (b)(2) are preconditions that apply every time the FTC seeks an injunction (whether preliminary or permanent). And because Section 13(b)(2) contemplates a federal district court’s entry of a preliminary injunction pending an administrative proceeding, Amazon argued that its second proviso cannot be interpreted as a separate grant of power allowing the FTC to seek a permanent injunction in a federal district court without a pending administrative proceeding.”

The court disagreed with Amazon’s reasoning and found that the Supreme Court’s holding that Section 13(b) does not allow courts to award monetary relief does not imply “that subparts 13(b)(1) and (b)(2) are preconditions that apply every time the FTC seeks an injunction.” The court indicated that the Supreme Court expressly left open that interpretative question. The court stressed that "The Supreme Court did not adopt a specific interpretation of Section 13(b)(2)’s second proviso, much less one that is clearly irreconcilable with that in Singer.” The court also pointed to FTC v. Elegant Sols., Inc., in which the Ninth Circuit found that AMG Cap. Mgmt. “does not undermine Singer’s holding” that Section 13(b) “authorizes the FTC to seek, and the district court to grant, permanent injunctions in cases in which the FTC does not contemplate any administrative proceedings.”

The Case is No. 2:23-cv-01495-JHC.

Judge: Chun, J.

Attorneys: Edward H. Takashima for the FTC. Andrew David Lazerow (Covington & Burling LLP) for Amazon.com Inc.

Companies: Amazon.com Inc.

Cases: Antitrust WashingtonNews FederalTradeCommissionNews GCNNews