The Open Markets Institute lauds the D.C. Court of Appeals’ decision today in D.C. v. Amazon, reversing the trial court’s erroneous dismissal of the District’s complaint.

The District of Columbia alleged that Amazon illegally monopolized and restrained trade in the online retail marketplace.

AMAZON COURT DECISION

Although Amazon charges third-party sellers substantial commissions and fees that amount to a tax of as high as 50% of the retail price, the corporation prohibits sellers from offering discounted prices on lower-cost rival platforms and their own sites. In other words, online sellers must incorporate the Amazon tax into their prices wherever they market their goods.

Further, Amazon compels suppliers to guarantee its profit margins on the sales of their goods. This conduct robs merchants and suppliers of pricing freedom, unfairly impedes the growth of competitors, and ultimately raises prices for consumers.

In line with the amicus brief filed by the Open Markets Institute in support of the District, the Court of Appeals ruled that a corporation does not need to control 100% of a market to be a monopolist under the antitrust laws. The court wrote, “Although there is no magic number, it is well established that an entity can exert monopoly power over market price with less than full market share.”