Amazon must face part of online retailer's pricing lawsuit, US judge rules

​Amazon.com has fallen short in its bid to dismiss a lawsuit that accused the e-commerce giant of hurting competition in the online superstore market, causing rival Zulily to lose sales and consumers to pay higher prices.

Seattle-based U.S. District Judge John Chun in a ruling, opens new tab on Dec. 31 said Zulily can proceed with claims that some of Amazon’s business practices could violate U.S. antitrust law.

Zulily’s lawsuit challenged Amazon’s “anti-discounting” policies that it said barred retailers from offering lower prices than those at Amazon.

The lawsuit said Amazon illegally used contracts and other means to restrict hundreds of thousands of third-party merchants from allowing Zulily and other sites like it to sell their goods more cheaply.

Chun dismissed part of the December 2023 complaint, ruling that Zulily had not shown that third-party retailers and wholesale suppliers were participating in a price-fixing conspiracy. He also dismissed a claim that Amazon violated a Washington state consumer protection law.

Amazon had asked the judge to dismiss the entire lawsuit. The company has denied any wrongdoing.
Amazon declined to comment on Thursday. Lawyers for Zulily did not immediately respond to a request for comment.

Zulily's lawsuit said its wholsesale suppliers could not afford to run afoul of Amazon pricing rules, and that Amazon set out to destroy the company as it emerged as a rival online superstore.

Amazon countered that matching rivals’ prices was a “classic form of price competition.” Amazon also disputed that Zulily qualified as a web superstore. It had urged Chun to rule that Zulily had no legal standing to file a lawsuit in the first place.
Days after the lawsuit was filed, Zulily closed up and entered an asset liquidation agreement. Zulily has since sold its intellectual property rights to its name.

Chun gave Zulily until Jan. 31 to file an amended complaint.

The case is Zulily Inc v. Amazon.com Inc, U.S. District Court for the Western District of Washington, No. 2:23-cv-01900-JHC.