Amazon Faces Class Action Lawsuit Over Third-Party Sellers' Fees

Amazon's Class Action Lawsuit Explained

A federal judge ruled that Amazon must face a class action lawsuit accusing the e-commerce giant of imposing inflated fees on third-party sellers that have been passed along to consumers. U.S. District Judge John Chun allowed the lawsuit to move forward in an early August order, which was unsealed Friday.

Details of the Ruling

• The certified class includes customers who bought more than five items from Amazon’s marketplace after May 2017.
• Several customers initially sued the company in 2021, alleging Amazon restricts third-party sellers from offering lower prices on other platforms. This practice is known as a platform most-favored-nation (PMFN) clause.

In the newly unsealed ruling, Chun rejected Amazon’s suggestion that the plaintiffs failed to show the existence of this policy, finding the company has implemented policies concerning third-party sellers that function as such. “Based on the above evidence, Plaintiffs have presented common evidence that shows, on a more probable than not basis, that a PMFN policy exists,” the judge wrote.

Broader Implications

The arguments in the class action case resemble those brought by the Federal Trade Commission (FTC) and over a dozen states, who sued the tech giant over alleged antitrust violations in 2023. The government accused Amazon of using anti-competitive measures to prevent sellers from offering lower prices, effectively keeping prices higher even on its platform.

The company maintains its practices “benefit consumers and are the essence of competition.” The Hill has sought comments from Amazon regarding the decision.

Chun, who is also overseeing the FTC case, ruled last October that the government's lawsuit against Amazon can go forward but dismissed several state claims.