Amazon asks judge to dismiss FTC antitrust lawsuit

Amazon asked a federal court on Friday to dismiss a US government antitrust lawsuit which accuses the company of using illegal strategies to boost profits at its online retail empire, including an algorithm that allegedly pushed up prices by more than $1 billion.

In its motion to dismiss, Amazon said the Federal Trade Commission, in a lawsuit filed in September, confused “common retail practices” with anticompetitive conduct and failed to identify harm to consumers.

“Amazon promptly matches rivals’ discounts, features competitively priced deals rather than overpriced ones, and ensures best-in class delivery for its Prime subscribers,” the company said in asking for the lawsuit to be “dismissed in its entirety.”

The FTC lawsuit was one of four that the Trump and Biden administrations have filed since 2020 against the companies that dominate the internet.

The Biden team has primarily focused on ordinary consumer items like housing, food and airline tickets.

The FTC lawsuit said Amazon, which has 1 billion items in its online superstore, created a “secret algorithm” named Project Nessie to identify products for which it can raise prices without losing customers. The FTC said Amazon used Project Nessie to extract more than $1 billion from Americans.

In its filing, Amazon said Nessie was discontinued in 2019 and that the company matches other companies’ lowest prices.

The FTC was also critical of Amazon’s decision to require sellers under the company’s Prime feature to use its logistics and delivery services even though many preferred to use a cheaper service or one that would also serve customers on other platforms.

Amazon said that using Amazon’s fulfillment services was voluntary, including for products sold under its Prime service.

Amazon’s average fees for sellers using its fulfillment services increased from 27% in 2014 to 39.5% in 2018, the FTC said.

Amazon also argued that it competed with other online superstores like Walmart and Target, and a range of stores with specialized marketssuch as Best Buy, Home Depot, Kroger, Costco, Staples, Walgreens, Nike and Apple.

“The complaint’s ‘online superstore’ market is implausible because it suggests, for example, that consumers would not consider buying a low-priced TV on Bestbuy.com only because Best Buy does not also sell shoes,” Amazon argued.