The U.S. Federal Trade Commission has been given the green light to proceed with its landmark antitrust lawsuit against Amazon.com Inc., though the company did win a small victory after a judge threw out some of the claims against it made by states involved in the case.

The order issued by Judge John H. Chun last week and unsealed on Monday represents a major defeat for Amazon, which has made repeated attempts to have the case against it tossed out of court. With the order, a trial in the case is set to proceed in October 2025, Reuters reported.

Amazon had previously filed a motion to dismiss the September 2023 lawsuit, which was brought by the FTC and the attorneys general of 18 states plus Puerto Rico. In the lawsuit, the complainants allege that the e-commerce giant is abusing its position in the marketplace to inflate prices on and off of its platform, overcharge sellers and stifle competition.

They allege that these tactics allow Amazon to maintain an illegal monopoly, and that it punishes sellers who discount their products outside of its platform. In addition, the lawsuit accuses Amazon of implementing conditions that force sellers to use its own fulfillment services in order to achieve a high ranking on its site’s search results.

“We are pleased with the court’s decision and look forward to moving this case forward,” FTC spokesperson Doug Farrar said in a prepared statement. “The ways Amazon illegally maintains its monopolies and the harm they cause – including suppressed competition and higher prices for shoppers and sellers – will be on full display at trial.”

The lawsuit followed a yearslong investigation into Amazon’s business practices, and is one of the most significant legal challenges the company has faced in its almost 30-year history. It’s accused of breaching numerous federal and state antitrust and consumer protection laws as a result of the rules it imposes on sellers.

In his order, Judge Chun of the U.S. District Court for the Western District of Washington, allowed the federal challenges and many of the state’s claims to proceed. However, he dismissed some of the claims made by Maryland, New Jersey, Oklahoma and Pennsylvania under various antitrust and consumer protection laws.

Despite the defeat, a spokesperson for Amazon insisted that the company would be able to prove its innocence in court when the case proceeds. “The ruling at this early stage requires the court to assume all facts alleged in the complaint are true,” the spokesperson said. “They are not.”

The spokesperson added that the FTC’s case falsely claims that consumers only consider popular websites such as Amazon, eBay, Target.com and Walmart.com when shopping for household products.

“Moving forward, the FTC will have to prove its claims in court and we’re confident those claims will not hold up when the FTC has to prove them with evidence,” he said, adding that the lawsuit would result in shopping being made “more difficult and costly” for consumers.

Rob Enderle of the Enderle Group said the legal challenge to Amazon was almost inevitable as a result of its rise to become a global conglomerate. As companies grow bigger, they come under heavier scrutiny, he said, and practices that are allowed or ignored at smaller firms become problematic once they become much larger.

“Large enterprises get so much power they often lose track of ethical behavior,” Enderle said. “Because they’re powerful enough to do almost anything, they mix up what they can do with what they should do, and that appears to be the case with Amazon.”

The analyst added that the case will likely result in negative consequences for Amazon. “I suspect that the company is about to go through the same learning experience as the likes of IBM and Microsoft, which previously fell foul of regulatory laws due to their market dominance,” he said.

Legal cases against big technology firms are becoming common affairs. The FTC is also suing Meta Platforms Inc. over alleged monopolistic practices, while Apple Inc. and Google LLC are facing similar lawsuits brought by the Department of Justice.

Holger Mueller of Constellation Research Inc. said the lawsuit promises to be a landmark case that will go a long way towards defining what kinds of choices consumers will have going forward, and the rules of the competitive landscape. But he said there’s no way of telling how the case will be resolved, or even if it will ultimately be resolved. For there’s still a chance it might be thrown out, depending on the outcome of the next election.

“The case highlights the extremely belligerent stance of the outgoing Biden administration towards big technology firms, but it’s not clear if the new administration will continue on this course,” Mueller said. “The Biden administration’s appetite to support the FTC’s litigation has never wavered, but it has little to show for those efforts thus far.”

In August, the DOJ did achieve one small victory when a judge ruled that Google’s ubiquitous search engine has been illegally exploiting its dominant market position to stifle competition and innovation.

Photo: Christian Wiediger/Unsplash