Antitrust and Unfair Competition Law

E-briefs, News and Notes: September 2023

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WELCOME to the SEPTEMBER 2023 edition of E-Briefs, News and Notes.

This edition has a variety of content:

  • In SECTION NEWS, we feature:
    • The MONTHLY MESSAGE: Belinda Lee the upcoming 2023 Golden State Institute.
    • Section Announcements:
      • New edition of Competition is now available!  
      • Save The Date for the 2024 UCL Institute on Thursday, January 18 at the City Club Los Angeles.  More details coming soon!
  • E-BRIEFS features three significant cases:
    • The Seventh Circuit vacates a district court’s order dismissing antitrust claims challenging “anti-poach” or “no-poach” clauses in McDonald’s franchise agreement;
    • In a long-awaited decision, the Nevada District Court certifies a class of all fighters who competed in one or more live professional UFC-promoted MMA bouts taking place or broadcast in the U.S.; and
    • The Amazon booksellers antitrust complaint is dismissed with prejudice highlighting the difficulty of pleading Robinson-Patman Act claims.
  • ENFORCEMENT AGENCY PRESS RELEASES highlight the enforcement activities of the Antitrust Division, DOJ, FTC, and California AG’s office.  Reading the press release(s) is a quick way to keep on top of major developments.

Thanks to all the contributors to this edition.  If you have any suggestions for improvement, or an interest in contributing to E-Briefs, please contact Editors Betsy Manifold (Manifold@whafh.com) and James Dallal (JDallal@cpmlegal.com).

Section News

Monthly Message: The 2023 Golden State Institute to be held October 26, 2023

The Section is delighted to be hosting the 33rd Golden State Antitrust & UCL Institute (“GSI”) at the Julia Morgan Ballroom in San Francisco and to celebrate Bonny Sweeney as our 2023 Antitrust Lawyer of the Year on October 26, 2023.

As the Section’s signature event, GSI brings together thought leaders, top enforcement officials, and leading practitioners to discuss important topics in California and federal antitrust and unfair competition law, including:

  • Keynote Speakers: Manish Kumar, Deputy Assistant Attorney General, for Criminal Enforcement, United States Department of Justice and Hetal Doshi, Deputy Assistant Attorney General for Litigation, United States Department of Justice
  • Recent Developments in Antitrust and Unfair Competition Law
  • Big Stakes Trial:  FTC v. Meta/Within
  • Revision and Reform of California’s State Antitrust Laws
  • Artificial Intelligence and Competition Law
  • Ethical Considerations in Complex Antitrust Litigation
  • JUDGES PANEL:  Managing Complex Antitrust and Unfair Competition Litigation
Belinda Lee
Belinda Lee

We are also excited to be introducing our inaugural class of New Lawyers Award recipients at the Celebration Event the evening before GSI on October 25, 2023, at Harborview Restaurant & Bar in San Francisco.

Finally, we also look forward to thanking our more than 150 volunteers who contributed last year to the success of the Antitrust & UCL Section at the Celebration Event.  Our volunteers are the lifeblood of the Section.  Please join us in bringing together all our volunteers and thanking them for contributing to or serving the Section.  Their commitment makes a difference.

Register for GSI, the Antitrust Lawyer of the Year Dinner, and the Celebration Event today.

We look forward to seeing you at all of the 2023 GSI events!

Belinda Lee
Chairperson, GSI Committee

New Edition of Competition is Now Available!

The new edition of Competition is now available and showcases articles from an impressive line-up of antitrust thought leaders who share their views on the topics the California Law Review Commission (CLRC) is currently studying.  The CLRC is currently evaluating whether the Cartwright Act should be revised: to outlaw monopolies by single companies; in the context of technology companies; or in any other fashion.  Organized by topic, the new Competition is a must-read and provides thought-provoking analysis on potential revisions to the Cartwright Act. 

Please see the link to the new Competition on the Section homepage.

Journal Cover

Save the Date for the 2024 UCL Institute!

UCL Institute

The 2024 UCL Institute will be held on Thursday, January 18 at the City Club Los Angeles.  More details coming soon!

E-Briefs

Seventh Circuit Vacates Dismissal of “No-Poach” Antitrust Claims by John A. Carriel
John A. Carriel
John A. Carriel

by John A. Carriel

On August 25, 2023, the Seventh Circuit vacated the Northern District of Illinois’ order dismissing antitrust claims challenging “anti-poach” or “no-poach” clauses in McDonald’s franchise agreements.  Deslandes v. McDonald’s USA, LLC, No. 22-2333, 2023 WL 5496957 (7th Cir. Aug. 25, 2023).

In Deslandes, plaintiffs (individuals who worked for McDonald’s franchises while the no-poach clauses were in effect and who were unable to take higher-paying offers at other franchises) filed putative class claims challenging the no-poach clauses as unlawful under Section 1 of the Sherman Act (15 U.S.C. § 1).  The no-poach clauses at issue precluded franchise operators from soliciting any person employed by a different McDonald’s or hiring any such person until six months after the last date that person had worked for a different McDonald’s.  Plaintiffs alleged the no-poach clauses were unlawful under the per se rule or the Rule of Reason.  The district court rejected both arguments and dismissed the complaint, reasoning the no-poach clause is: (1) not per se unlawful as it is “not a naked restraint but is ancillary to each franchise agreement—and, as every new restaurant expands output, the restraint is justified”; and (2) not unlawful under the Rule of Reason as plaintiffs failed to allege market power “in the market for restaurant workers’ labor.”  Id. at *1. 

On appeal, plaintiffs argued that the district court erred in both findings.  With respect to the Rule of Reason determination, plaintiffs argued that the relevant economic market for considering market power was the market for “workers at McDonald’s.”  Id.  The Seventh Circuit rejected this reasoning considering, the “mobility of workers—both from one employer to another and from one neighborhood to another—makes it impossible to treat employees at a single chain as a market.”  Id.   As to the per se determination, plaintiffs argued the no-poach clauses are not justified as an “ancillary restraint.”  It is within this line of reasoning the Seventh Circuit found merit. 

An agreement between competitors is not a “naked restraint”—and thus per se unlawful—if it is “ancillary to the success of a cooperative venture.”  Id.  Here, the Seventh Circuit identified two problems with the district court’s finding that the no-poach agreement was ancillary because “each agreement expands the output of burgers and fries.”  Id. at *2.  Namely, such reasoning: (1) treats increased output as “justifying detriments to workers (monopsony pricing)”; and (2) while the franchise agreements as a whole may promote increased output of burgers and fries, there had been no analysis as to whether the no-poach clause in particular had any relation to, or impact, on output.  Id.  As to the second, the Seventh Circuit further explained that a no-poach agreement does not promote output if “it prevents workers from reaping the gains from skills they learned by agreeing to work at lower wages at the outset of their employment.”  Id.  While such an agreement promotes profits, “it does not promote output and so cannot be called ‘ancillary’ in the sense antitrust law uses that term.”  Id. at *3.  Accordingly, the Seventh Circuit reversed and remanded.

Importantly, the Seventh Circuit did not reach a determination as to whether the no-poach clauses were, in fact, naked restraints or ancillary to the agreements.  Rather, it held plaintiffs had identified a plausible antitrust claim and highlighted considerations and “complex questions” that would “require careful economic analysis” at the appropriate juncture—i.e., if or when McDonald’s raised the defense that the no-poach clauses should be classified as ancillary.

Nevada District Judge Certifies Class of MMA Fighters by Anthony Leon

By Anthony Leon

Anthony Leon
Anthony Leon

In a long-awaited 80-page ruling, the Nevada District Court (the Honorable Richard F. Boulware, II) certified a class of all U.S. fighters who competed in one or more live professional UFC-promoted MMA bouts taking place or broadcast in the United States from December 16, 2010, to June 30, 2017.  Le v. Zuffa LLC, No. 2:15-CV-01045, 2023 WL 5085064 (D. Nev. Aug. 9, 2023), ECF No. 839.

Background

Plaintiffs allege that MMA fighters competing in the UFC are not sufficiently paid, especially when compared to the risks they endure.  Unlike boxing, MMA championships are promoter-specific with no independent body sanctioning organization to award championship belts or regulate the rules as to who is declared a champion.  Defendant Zuffa, doing business as the UFC, promotes MMA competitions, owns the UFC trademark, and derives revenues from access to live and taped events, sponsorships, branding, and the advertising of products, and royalties from UFC branded merchandise.  Defendant’s fighters are considered independent contractors, not salaried employees with benefits.  All fighters must sign the same two agreements: the Promotional and Ancillary Rights (PAR), which generally governs the fighters’ relationship with the Defendant, and the Bout Agreement, which affirms event-specific compensation details.  Under the contracts, the timing of bouts and matching of opponents was determined unilaterally by Defendant.  The agreements have: an “exclusion clause” requiring a fighter to fight in only bouts promoted by Defendant; a “cut clause” that allows Defendant to cut a fighter losing a bout; a “retirement clause” that allows Defendant to suspend a fighter’s contract indefinitely; and a “tolling clause” that effectively suspends a fighter.  

Plaintiffs allege that the Defendant unlawfully maintained dominance in the market for fighter services in order to suppress fighter wages for cost-cutting purposes, all while increasing its own profit.  Defendant’s alleged monopsony power included excluding competing promoters from the market, imposing restrictive contracts on fighters, and conspiring to fix fighter pay with exclusive contracts – all in violation of Section 2 of the Sherman Act.  After holding evidentiary hearings, the District Court granted Plaintiffs’ motion for class certification as to the Bout Class pursuant to Rule 23(b)(3), but denied certification for the Identity Class.

Certification of the Bout Class

The “Bout Class” is defined as “all persons who competed in one or more live professional UFC-promoted MMA bouts taking place or broadcast in the United States from December 16, 2010, to June 30, 2017.”  Slip Op. at 14.  The Court readily found that the class met the requirements of numerosity, commonality, typicality, and adequacy set forth by Rule 23(a).  The Court noted that joinders from more than 1,200 MMA fighters in the U.S. would be impracticable.  Id. at 14.  In addition, typicality was not affected by the fact that certain MMA fighters may have benefited from the alleged scheme rather than being adversely impacted by it and adequacy was not affected by Defendant’s speculation that current fighters and former fighters may not be interested in the same kind of remedy since all contemplated being compensated for their services during the class period.  Id. at 15, 17-18.  Reviewing the case history, the Court also found superiority.

Predominance Analysis

The Court largely focused its analysis on the predominance requirement of Rule 23(b)(3).

First, the Court sided with Plaintiffs in finding that the Defendant possessed monopsony power in the relevant markets.  Plaintiffs appropriately identified both the relevant input market—the market for Elite Professional MMA Fighter Services, where Defendant and its competitors purchase fighter services to be able to create their product of MMA bout events, and the relevant output market—promotion of live Elite Professional MMA bouts between Professional MMA fighters who compete in one-on-one fights known as bouts.  Plaintiffs adequately showed that Defendant controls, or controlled, a dominant share of the relevant market, which based on expert testimony was roughly 94% to 99%.  There was also “ample evidence that [Defendant] dominated the output market financially” with “market share [that] has been as high as approximately 90%.”  Id. at 29.  Finally, the Court found that in addition to natural barriers to entry to the input market (such as significant fixed costs to event promotion, advertising, marketing, production, and distribution, etc.), Plaintiffs demonstrated that Defendant created artificial barriers that made it “prohibitively expensive and difficult for new entrants in the input (and output) market to effectively compete with [Defendant].”  Id. at 31.  

The Court found that Defendant’s substantial monopsony power in the input market for fighter services was maintained by anticompetitive and exclusionary conduct including exclusionary contracts which effectively “locked up” fighters.  Id at 34-35.  Defendant engaged in “ruthless coercive techniques” that rendered the contracts perpetual.  Id. at 36.  Defendant also systematically acquired, or forced the shutdown of, rival promoters, effectively eliminating any would-be rivals to which fighters might otherwise have switched.  Id. at 40.  Defendant failed to present any meaningful evidence that these acquisitions were procompetitive or contributed to the development of the industry.  Id.

Taking a “holistic look at how the interlocking agreements actually impact competition,” the Court looked at the anticompetitive nature of the contracts, the use of extra contractual coercion techniques, and the intentional horizontal acquisition of prospective market competitors and found that “the totality of these tactics demonstrates Defendant’s willful acquisition, and maintenance, of market dominance through anticompetitive conduct in the relevant input market.”  Id. at 42 (quoting In re Nat’l Football League’s Sunday Ticket, 933 F.3d 1136, 1152-53 (9th Cir. 2019)).

Second, the Court found common questions of law or fact as to the class members, effectively predominating over individualized questions.  Slip Op. at 43.  The contracts were a prerequisite for all class members to be allowed to fight, and therefore involved all class members.  The coercive tactics intentionally and consistently used by Defendant, inducing fighters to re-sign contracts or risk punishment, were also commonly applied to all class members.  Id.  Finally, the impact of the horizontal acquisitions effectively constrained exit options to competitors for all fighters.  Id. at 44.

Third, the Court found that Plaintiffs met their burden of establishing impact to the putative class from the alleged antitrust injury.  The Court found Plaintiffs’ expert, Dr. Singer, to be “sound and reliable” at the class certification stage.  Singer’s expert report used regression analysis to indicate that the wage share of bout class members is negatively and significantly correlated with Defendant’s “foreclosure share.”  Slip. Op. at 44-46.  The Court discounted Defendant’s “many critiques of Plaintiffs’ model” and found that Defendant’s model failed “to actually grapple with the underlying assumptions of Plaintiffs’ model in any way that would undermine Plaintiffs’ assumptions or render Dr. Singer’s model incapable of proving impact or damages on a class-wide basis.”  Id.  Based upon the totality of the evidence, Plaintiffs established that common questions predominate as to the impact of Defendant’s foreclosure of the MMA market and that Bout Class members suffered economic injury as a result of Defendant’s anti-competitive conduct.  Id. at 47-48.

Here, Dr. Singers’ multivariate regression found that foreclosing a substantial share of the relevant input market had the impact of suppressing the amount of revenue share paid to fighters.  Id. at 51.  Specifically, as Defendant increasingly dominated the MMA market, fighters’ wages were suppressed.  The Court found that Plaintiffs demonstrated that this impact predominated over the specific situations or injury of individual class members.  Resorting to separate regression models, Dr. Singer opined that a rise or fall in compensation was and is common across class members.  Id. at 62-63.  The Court found that the common questions predominate over individualized questions under either standard: the de minimis rule or the more capacious rule established by Olean.  Id. at 66.

Fourth, to show damages calculations that rely on common evidence, which can be determined without excessive difficulty and attributed to their theory of liability, Plaintiffs offered four different models.  The first two are based on benchmark models from former competitors Strikeforce & Bellator.  The Court found that “the revenue share Bellator and Strikeforce paid to their fighters is a reasonable measure of calculating the but-for damages of Defendant’s fighters.”  Id. at 68.  Applying these benchmarks to Defendant’s event revenue for the Class Period, Plaintiffs estimate damages to be between $811 million (Bellator benchmark) and $1.4 billion (Strikeforce benchmark).  Alternatively, Plaintiffs presented two adequate and reasonable damages models derived from their impact regression analysis, estimating damages between $811 million and $1.6 billion.  Id. at 70.  The Court found that Plaintiffs can identify, through either of the four presented models, damages directly derived and arising from the alleged antitrust conduct alone.  Id. at 71.

Consequently, the Court concluded that Plaintiffs have sufficiently established predominance under Rule 23(b)(3).

Certification Denied for the Identity Class

The “Identity Class” is defined as “Each and every UFC Fighter whose Identity was expropriated or exploited by the UFC, including in UFC Licensed Merchandise and/or UFC Promotional Materials in the United States from December 16, 2010 to June 30, 2017.”  Id. at 75.  The Court concluded that the Identity Class failed to satisfy the commonality requirement of Rule 23(b)(3).  “Because of the multiplicity of potential revenue streams encompassed in the Identity Class, the lack of evidence as to what funding streams applied to which fighters, the lack of evidence creating a measurable connection between the alleged antitrust conduct of Defendant and the suppressed identity compensation, as well as the lack of evidence entitling fighters to any of these revenue streams, . . . common questions of fact will not predominate as to the Identity Class.”  Id. at 78.

On August 23, 2023, Defendant petitioned the Ninth Circuit to permit an interlocutory appeal of the certification order, mainly contesting the existence of commonality.  No party will leave the Octagon without a proper fight.

Books and Antitrust: Bookends & Beginnings v. Amazon et al. by Travis West

By Travis West

Travis West
Travis West

On August 25, 2023, District Judge Gregory Woods for the Southern District of New York adopted the Report and Recommendation (“R&R”) issued by Magistrate Judge Valerie Figueredo recommending that a proposed class action antitrust complaint be dismissed.  Bookends & Beginnings LLC v. Amazon.com, Inc., No. 1:21-cv-02584-GHW-VF (S.D.N.Y. Aug. 25, 2023), ECF No. 206.  Magistrate Judge Figueredo had previously recommended that the initial complaint be dismissed; the second amended complaint (“SAC”) likewise failed to survive a motion to dismiss.  Bookends & Beginnings LLC v. Amazon.com, Inc., No. 1:21-cv-02584-GHW-VF (S.D.N.Y. Aug. 3, 2023), ECF No. 203.

In the SAC, the plaintiff, a bookseller, alleged that Amazon and the five largest book publishers in the United States had conspired to artificially inflate the wholesale price for print trade books.  Booksellers purchase books from the book publishers at a discounted rate from the retail price.  The plaintiff alleged that the five book publishers collectively agreed to sell their books to Amazon at a steep discount that was below the standard discount and to provide other favorable terms to Amazon.  The R&R, which is heavily redacted, is light on some of the details of the arrangement but it appears that the terms were such that the plaintiff alleged that the only reason each publisher would accept such terms is that they knew every other publisher agreed to the same terms.  Essentially, the complaint alleged a hub-spoke-and-rim agreement that provided Amazon a discriminatory discount on print trade books and raised the list price and wholesale price paid to the publishers by the plaintiff. 

In evaluating the complaint, the R&R first considered whether the plaintiff had alleged antitrust standing, which it had failed to do in the first complaint.  In the SAC, the plaintiff made clear that the defendants’ actions had forced it to pay higher wholesale prices, which sufficed for antitrust injury. 

Next, the magistrate judge analyzed the Robinson-Patman Act claims.  The Robinson-Patman Act prohibits price discrimination between different purchasers of commodities of like grade and quality if the effect of the discrimination is to lessen competition.  The defendants challenged the claim on several grounds.  First, they argued that the plaintiff had failed to demonstrate that the purchases at issue were contemporaneous with Amazon’s purchases.  The magistrate judge swiftly dismissed that criticism, noting that the plaintiffs were not required to allege the exact dates to prove the purchases were contemporaneous.  Next, the defendants argued that the alleged discriminatory pricing did not affect competition.  The magistrate judge found that because the SAC contained detailed allegations about the relative size of the discount Amazon received compared to the plaintiff, it had shown direct evidence of discriminatory discounts.

Although the plaintiff had adequately pled a prima facie case under the Robinson-Patman Act, the magistrate judge found that the claim should be dismissed because both the meeting-competition defense applied and because the plaintiff had failed to plausibly plead facts from which to infer that the pricing differential was not the result of materially different contract terms.  Under the meeting-competition defense, a seller’s price reduction does not violate the Robinson-Patman Act if it is made in good faith to meet the equally low price of a competitor. It applied here because the plaintiff had failed to plausibly allege the existence of a conspiracy among the publishers to fix the price of print trade books.  The magistrate judge also found that there were materially different contract terms because the plaintiff had failed to allege that both it and Amazon had entered into multi-year contracts. 

The magistrate judge also rejected Plaintiffs’ claim under Section 2(f) of the Robinson-Patman Act.  Section 2(f) prohibits a favored purchaser from knowingly inducing or receiving a discriminatory price.  The plaintiff failed to demonstrate that Amazon knew it was receiving a discriminatory lower price as its evidence did not support any inference that Amazon knew the price was discriminatory. 

After dismissing the Robinson-Patman Act claims, the magistrate judge turned to the Sherman Act claims.  The magistrate judge rejected the plaintiff’s Section 1 argument that the distribution agreements constituted direct evidence of a horizontal conspiracy since the plaintiff failed to show other evidence of collusion.  As a result, the agreements were merely treated as parallel conduct.  The magistrate judge also rejected the plaintiff’s circumstantial evidence argument.  The magistrate judge found that the circumstances did not suggest publishers acted against their independent self-interest because Amazon constituted such a large portion of their sales that different pricing made sense and there was no fear that raising prices would harm each publisher because the market was so concentrated that it was likely the other publishers would follow suit.  The magistrate judge also disagreed that the defendants had a common motive to collude and that their prior collusive conduct in the Apple e-books litigation was relevant.  Likewise, there were no allegations of high-level interfirm communications and no support for a theory that market concentration made collusion more likely.  The magistrate judge also rejected a vertical restraint theory as the plaintiff failed to show that the publishers’ conduct caused higher prices. 

Finally, the magistrate judge rejected the Section 2 monopolization claim because the plaintiff had failed to adequately plead a conspiracy or that Amazon had used its market power to extract discriminatory lower prices in violation of the Robinson-Patman Act. 

The Order adopting the magistrate judge’s Report was the second time that the plaintiff’s claims had been rejected.  Perhaps recognizing the futility of a third amended complaint, the plaintiff did not oppose dismissal of the complaint with prejudice.

This case may illustrate the difficulty in bringing Robinson-Patman Act claims, given that non-discriminatory rationales are often available.  The FTC, which has indicated it would like to bring more Robinson-Patman Act challenges, may likewise face an uphill battle. 

Agency Updates

This feature includes excerpts from selected press releases issued by the Antitrust Division, USDOJ, the Federal Trade Commission and the California Attorney General’s Office.  It does not include all press releases issued by those offices.  This appears to be a truly transitional time in antitrust enforcement and reading the press releases can be very helpful to stay on top of changes.

Antitrust Division, US Department Of Justice

For all Antitrust Division, DOJ press releases, visit https://www.justice.gov/atr/press-releases

Highlights include the following:

Fraud Charges Added Against Health Care Staffing Executive in Las Vegas

DOJ Press Release, Thursday, September 7, 2023

A federal grand jury in Las Vegas returned a superseding indictment yesterday charging a health care staffing executive with conspiring to fix the wages of Las Vegas nurses — and then fraudulently concealing that conspiracy and the government’s investigation so that he could sell his company for over $10 million. The superseding indictment charges Lopez and other unnamed co-conspirators with agreeing to suppress and eliminate competition for the services of nurses between March 2016 and May 2019.

 â€œWage fixing hurts workers,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Antitrust Division will aggressively investigate and prosecute wage-fixing conspiracies and any fraudulent conduct aimed at keeping the illicit profits of such conspiracies.”

Federal Trade Commission

For all FTC press release, visit https://www.ftc.gov/news-events/news/press-releases.

FTC Sues Amazon for Illegally Maintaining Monopoly Power

Amazon’s ongoing pattern of illegal conduct blocks competition, allowing it to wield monopoly power to inflate prices, degrade quality, and stifle innovation for consumers and businesses

FTC Press Release, September 26, 2023

The Federal Trade Commission and 17 state attorneys general today sued Amazon.com, Inc. alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.  

The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging. By stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance. Amazon’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers. 

*       *     *     *

The FTC and states allege Amazon’s anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. These tactics include:

  • Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
  • Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.

Amazon’s illegal, exclusionary conduct makes it impossible for competitors to gain a foothold. With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach. This includes:

  • Degrading the customer experience by replacing relevant, organic search results with paid advertisements—and deliberately increasing junk ads that worsen search quality and frustrate both shoppers seeking products and sellers who are promised a return on their advertising purchase.
  • Biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality. 
  • Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.  

The FTC, along with its state partners, are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition. Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin joined the Commission’s lawsuit.

FTC and DOJ Announce Additional Workshops on the 2023 Draft Merger Guidelines

FTC Press Release, September 27, 2023

The Federal Trade Commission and Justice Department announced today that they plan to hold two additional workshops to facilitate public dialogue on the 2023 Draft Merger Guidelines. Each of the two remaining workshops will be held in-person at an academic institution. 

The second workshop, co-hosted with the MIT Economics Department and the Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School, will take place at the Harvard Kennedy School on October 5 from 1:30 p.m. to 4:45 p.m. ET. 

The third workshop, co-hosted with the University of Chicago Law School, Coase Sandor Institute for Law and Economics, will take place on November 3 from 9 a.m. to 4:45 p.m. CT. 

California Department Of Justice

For all California Department of Justice press releases, visit https://oag.ca.gov/media/news.

California Attorney General Rob Bonta issued the following statement in support of the Federal Trade Commission’s federal lawsuit against Amazon

September 26, 2023 Press Release

“The Biden-Harris Administration has taken numerous actions to protect competition in the marketplace and lower costs for consumers. Today’s lawsuit by the FTC and 17 states against Amazon is a continuation of those important efforts. I welcome the FTC and sister states to this fight against Amazon. Misuse of monopoly power on the backs of consumers and workers deserves no place in our economy.” 

Background on Attorney General Bonta’s Amazon Lawsuit:

  • On September 14, 2022, Attorney General Bonta announced filing a lawsuit against Amazon in the Superior Court of California, County of San Francisco. The complaint alleges that Amazon violated California’s Unfair Competition Law and Cartwright Act by requiring merchants to enter into agreements that severely penalize them if their products are offered for a lower price off-Amazon.
  • On March 30, 2023, Attorney General Bonta secured a favorable court ruling, which blocked Amazon’s request that California’s lawsuit against the company be dismissed.
  • On April 14, 2023, Attorney General Bonta announced that the Superior Court decided to unredact portions of California’s complaint, revealing additional evidence that Amazon is blocking price competition in violation of state antitrust laws.
  • Trial in California’s case is currently set for 2026.


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