Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 1 of 18
`
`The Honorable John H. Chun
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`ELIZABETH DE COSTER, et al., on behalf
`of themselves and all others similarly situated,
`
`Case No. 2:21-cv-00693-JHC
`
`v.
`
`Plaintiffs,
`
`DEFENDANT AMAZON.COM, INC.’S
`REPLY IN SUPPORT OF MOTION TO
`DISMISS
`
`AMAZON.COM, INC., a corporation,
`
`ORAL ARGUMENT REQUESTED
`
`Defendant.
`
`NOTE ON MOTION CALENDAR:
`June 24, 2024
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:21-CV-00693-JHC)
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
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`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 2 of 18
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`TABLE OF CONTENTS
`
`Page
`
`I.
`II.
`
`III.
`
`INTRODUCTION ...............................................................................................................1
`ARGUMENT .......................................................................................................................2
`A.
`Amazon Did Not Waive Any Argument. ................................................................2
`B.
`Plaintiffs’ Section 1 Claims Fail. .............................................................................4
`1.
`SC-FOD Is Not an Agreement. ....................................................................4
`2.
`Plaintiffs Fail to Allege Anticompetitive Effects for the Non-SC-
`FOD “Agreements.” .....................................................................................6
`Plaintiffs’ Section 2 Claims Fail. .............................................................................8
`1.
`Plaintiffs’ Monopoly Claims Based on SC-FOD Are Time-Barred. ...........8
`2.
`Plaintiffs Fail to Allege SC-FOD’s Anticompetitive Effects. .....................9
`3.
`Plaintiffs Fail to Allege Monopoly Power in the Online Retail
`Sales Market...............................................................................................10
`CONCLUSION ..................................................................................................................11
`
`C.
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - i
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
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`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 3 of 18
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Federal Cases
`
`In re Amazon.com, Inc. eBook Antitrust Litigation,
`2023 WL 6006525 (S.D.N.Y. 2023) ..........................................................................................6
`
`American Needle v. National Football League,
`560 U.S. 183 (2010) ...................................................................................................................4
`
`In re Apple iPhone Antitrust Litig.,
`846 F.3d 313 (9th Cir. 2017) .....................................................................................................3
`
`Arandell Corp. v. Centerpoint Energy Services, Inc.,
`900 F.3d 623 (9th Cir. 2018) .....................................................................................................5
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ...................................................................................................................4
`
`Belstone Cap., LLC v. Bellstone Partners, LLC,
`2017 WL 1153111 (E.D. Cal. 2017) ..........................................................................................5
`
`Big Bear Lodging Ass’n v. Snow Summit, Inc.,
`182 F.3d 1096 (9th Cir. 1999) ...................................................................................................9
`
`Brantley v. NBC Universal, Inc.,
`675 F.3d 1192 (9th Cir. 2012) ...................................................................................................6
`
`Brown v. Amazon.com, Inc.,
`2023 WL 5793303 (W.D. Wash. 2023) .....................................................................................6
`
`Casas v. Victoria’s Secret Stores, LLC,
`2015 U.S. Dist. LEXIS 192469 (C.D. Cal. 2015) ......................................................................3
`
`Davidson v. Countrywide Home Loans, Inc.,
`2011 WL 1157569 (S.D. Cal. 2011) ..........................................................................................3
`
`De Coster v. Amazon.com, Inc.,
`2023 WL 372377 (W.D. Wash. 2023) .......................................................................................4
`
`De Coster v. Amazon.com, Inc.,
`No. 2:21-cv-00693-JHC (W.D. Wash. 2021) ........................................................................1, 2
`
`Dreamstime.com, LLC v. Google LLC,
`54 F.4th 1130 (9th Cir. 2022) ....................................................................................................6
`
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - ii
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 4 of 18
`
`Eatoni Ergonomics, Inc. v. Rsch. In Motion Corp.,
`826 F. Supp. 2d 705 (S.D.N.Y. 2011), aff’d, 486 F. App’x 186 (2d Cir. 2012) ....................6, 8
`
`In re eBay Seller Antitrust Litig.,
`2010 U.S. Dist. LEXIS 19480 (N.D. Cal. 2010) .....................................................................11
`
`Fox v. Good Samaritan Hosp. LP,
`2008 U.S. Dist. LEXIS 137501 (N.D. Cal. 2008) .....................................................................8
`
`Frame-Wilson v. Amazon.com, Inc.,
`591 F. Supp. 3d 975 (W.D. Wash. 2022) ...............................................................................1, 4
`
`Frame-Wilson v. Amazon.com, Inc.,
`664 F. Supp. 3d 1198 (W.D. Wash. 2023) ...............................................................................10
`
`Frame-Wilson v. Amazon.com, Inc.,
`No. 2:20-cv-424-JHC (W.D. Wash. 2024) ....................................................................1, 2, 3, 5
`
`FTC v. Amazon.com, Inc.,
`No. 2:23-cv-01495 (W.D. Wash. 2023) .....................................................................................3
`
`FTC v. Facebook, Inc.,
`560 F. Supp. 3d 1 (D.D.C. 2021) .............................................................................................11
`
`Garrison v. Oracle Corp.,
`159 F. Supp. 3d 1044 (N.D. Cal. 2012) .....................................................................................9
`
`In re Glumetza Antitrust Litigation,
`611 F. Supp. 3d 848 (N.D. Cal. 2020) .......................................................................................9
`
`Harper v. Nedd,
`71 F.4th 1181 (9th Cir. 2023) ....................................................................................................7
`
`Intel Corp. v. Fortress Inv. Grp. LLC,
`511 F. Supp. 3d 1006 (N.D. Cal. 2021) .....................................................................................9
`
`Karraa v. City of L.A.,
`2020 WL 6882947 (C.D. Cal. 2020)..........................................................................................4
`
`Lenhoff Enters., Inc. v. United Talent Agency,
`2015 WL 7008185 (C.D. Cal. 2015)..........................................................................................5
`
`Malheur Forest Fairness Coal. v. Iron Triangle, LLC,
`2023 WL 6811871 (D. Or. 2023).............................................................................................11
`
`Midwestern Mach. Co. Inc. v. Nw. Airlines Inc.,
`392 F.3d 265 (8th Cir. 2004) .....................................................................................................8
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - iii
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 5 of 18
`
`In re Mission Health Antitrust Litigation,
`2024 WL 759308 (W.D.N.C. 2024) ..........................................................................................6
`
`Monsanto Co. v. Spray-Rite Serv. Corp.,
`465 U.S. 752 (1984) ...................................................................................................................4
`
`Orchard Supply Hardware LLC v. Home Depot USA, Inc.,
`967 F. Supp. 2d 1347 (N.D. Cal. 2013) .....................................................................................6
`
`Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc.,
`555 U.S. 438 (2009) ...................................................................................................................6
`
`Samsung Electronics Co. v. Panasonic Corp.,
`747 F.3d 1199 (9th Cir. 2014) ...................................................................................................9
`
`Spinelli v. NFL,
`903 F.3d 185 (2d Cir. 2018).......................................................................................................9
`
`Tanaka v. Univ. of S. Cal.,
`252 F.3d 1059 (9th Cir. 2001) .................................................................................................10
`
`Top Rank, Inc. v. Haymon,
`2015 WL 9948936 (C.D. Cal. 2015)........................................................................................11
`
`United Energy Trading, LLC v. Pac. Gas & Elec. Co.,
`177 F. Supp. 3d 1183 (N.D. Cal. 2016) .....................................................................................9
`
`United States v. Delta Dental of Rhode Island,
`943 F. Supp. 172 (D.R.I. 1996)..................................................................................................5
`
`State Cases
`
`California v. Amazon.com, Inc.
`(Cal. Super Ct. 2022) .................................................................................................................3
`
`Coronavirus Rep. v. Apple Inc.,
`2021 WL 5936910 (N.D. 2021), aff’d 85 F.4th 948 (9th Cir. 2023) .......................................10
`
`Federal Statutes
`
`IIIB Philip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of
`Antitrust Principles and Their Application (4th ed. 2015) ........................................................5
`
`Sherman Act
`§ 1...................................................................................................................................1, 2, 4, 5
`§ 2.......................................................................................................................................2, 5, 8
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - iv
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 6 of 18
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`Rules
`
`Federal Rule of Civil Procedure
`12................................................................................................................................................9
`12(g) ...........................................................................................................................................2
`15(c) ...........................................................................................................................................8
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - v
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 7 of 18
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`INTRODUCTION
`I.
`From this case’s inception, Plaintiffs’ allegations focused on the former Parity Provision,
`which Amazon withdrew in March 2019, and the Marketplace Fair Pricing Policy (“MFPP”),
`which allegedly prohibits prices in Amazon’s store that are “significantly higher” than recent
`prices “on and off Amazon.” Even though the terms of the former Parity Provision and the MFPP
`differed, Plaintiffs alleged that the MFPP was a de facto continuation of the Parity Provision
`because it Amazon disqualified uncompetitively priced third-party seller offers from being the
`Featured Offer on its store. Frame-Wilson v. Amazon.com, Inc., 591 F. Supp. 3d 975, 981 (W.D.
`Wash. 2022); De Coster Order re Mot. to Dismiss 3, Dkt. 59.1 The Court concluded that these
`allegations stated a Sherman Act Section 1 claim because third-party sellers agreed to follow these
`policies in their Business Solutions Agreements (“BSA”) with Amazon. Frame-Wilson, 591 F.
`Supp. 3d at 981-82; Dkt. 59 at 3-4. But Plaintiffs’ allegations have fundamentally changed, and
`Amazon was not able to address the import of these new allegations, individually or in
`combination, until Plaintiffs’ recent amendments. For that reason, there can be no waiver.
`Plaintiffs’ new reliance on the Select Competitor-Featured Offer Disqualification (“SC-
`FOD”) algorithm dooms their Sherman Act Section 1 claim. The Complaints now allege that,
`despite the Parity Provision’s withdrawal, Amazon has continued to require parity through
`“de facto price parity restraints” in addition to the MFPP, including SC-FOD, the Amazon
`Standard for Brands (“ASB”) program, and Amazon’s Seller Code of Conduct. SCAC ¶¶ 22-23;
`TAC ¶¶ 14-15;2 Pls.’ Mot. to Amend, Dkt. 113, at 5 (describing these practices as alleged “de facto
`price parity restraints”). Crucially, these new allegations identify SC-FOD as the mechanism that
`
`1 With respect to quoted material, unless otherwise indicated, all brackets, ellipses, footnote call
`numbers, internal quotations, and citations have been omitted for readability. All emphasis is
`added unless otherwise indicated.
`2 “SCAC” refers to the Second Amended Consolidated Complaint in De Coster v. Amazon.com,
`Inc., No. 2:21-cv-00693-JHC, Dkt. 126. “TAC” refers to the Third Amended Complaint in Frame-
`Wilson v. Amazon.com, Inc., No. 2:20-cv-424-JHC, Dkt. 147. Pursuant to the parties’ stipulation,
`Amazon’s motion and this reply apply equally to both Complaints. Frame-Wilson, Dkt. 169.
`
`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 1
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 8 of 18
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`results in Featured Offer disqualification. SCAC ¶¶ 22-26; TAC ¶¶ 13-17. This reliance on SC-
`FOD is a radical expansion of antitrust law that would impose liability on a retailer that highlights
`products offered at low prices. Consumers, under this theory, cannot be informed that prices
`promoted in a store are at least as low as those found in other stores. The Federal Trade
`Commission—which had the benefit of a multi-year investigation—does not claim that SC-FOD
`or any other Amazon practice violates Section 1. For good reason: at a minimum, SC-FOD is not
`an agreement between Amazon and third-party sellers. Plaintiffs now argue that SC-FOD
`constitutes a “tacit” agreement or an “enforcement” mechanism for other agreements. But an
`algorithm is not an agreement, and except for the now withdrawn Parity Provision, none of the
`challenged practices require third-party sellers to offer at least the same prices in Amazon’s store
`that they offer elsewhere.
`Plaintiffs’ SCAC and TAC also confirm that their Section 2 claims are untimely, because
`Amazon implemented SC-FOD in 2015, and their undated allegations fail to assert an act that
`restarts the limitations period. Their claims with respect to the so-called “Online Retail Sales
`Market” fail for the independent reason that the SCAC and TAC contain no factual allegations
`demonstrating that Amazon has monopoly power in that alleged market. Plaintiffs attempt to cure
`that failure by conflating the allegations relating to the alleged Online Retail Sales Market and the
`Online Retail Marketplace Market, even though they are pled as separate markets.
`Plaintiffs’ SCAC in De Coster and their TAC in Frame-Wilson should be dismissed.
`II.
`ARGUMENT
`Amazon Did Not Waive Any Argument.
`Plaintiffs’ waiver argument ignores how Plaintiffs’ claims have evolved, and that this
`Motion is brought to streamline—not delay—this litigation. Federal Rule of Civil Procedure 12(g)
`limits successive motions to dismiss when a defense or objection was “available to the party but
`omitted from its earlier motion.” The rule does not bar a party from raising new arguments in
`response to new allegations. As one case cited by Plaintiffs explains: “The defendant is also free
`to interpose new objections or arguments in response to recently-added allegations as, of course,
`
`A.
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 2
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
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`

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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 9 of 18
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`an objection could not be considered previously ‘available’ if it responds to new allegations.”
`Casas v. Victoria’s Secret Stores, LLC, 2015 U.S. Dist. LEXIS 192469, at *17 (C.D. Cal. 2015).
`Even if an objection was “technically” available previously, “courts faced with a successive
`motion often exercise their discretion to consider the new arguments in the interests of judicial
`economy,” as long as the second motion is not made for purposes of delay. In re Apple iPhone
`Antitrust Litig., 846 F.3d 313, 319 (9th Cir. 2017) (quoting Banko v. Apple, Inc., 2013 WL
`6623913, at *2 (N.D. Cal. 2013)); see also Davidson v. Countrywide Home Loans, Inc., 2011 WL
`1157569, at *4 (S.D. Cal. 2011) (similar).
`First, Plaintiffs do not claim that Amazon waived any arguments relating to SC-FOD.
`Second, Amazon did not waive its challenges to the sufficiency of the alleged
`anticompetitive effects of the non-SC-FOD-related conduct. Plaintiffs previously identified MFPP
`as a de facto continuation of the Parity Provision, by implementing Featured Offer disqualification.
`Dkt. 20; CAC ¶ 19 (“Amazon continues to enforce MFN policies, now under the guise of the so-
`called ‘Fair Pricing Policy’”); Frame-Wilson, Dkt. 111-1 ¶ 16 (“But that withdrawal was merely
`nominal because the BSA continued the MFN agreement under a different provision. The BSA
`calls its current MFN agreement a ‘Fair Pricing’ Policy.”). Based on these allegations, the Court
`stated: “Plaintiffs allege that that Amazon continues to enforce its PMFN provision through its
`current ‘fair pricing’ provision.” Frame-Wilson, 591 F. Supp. at 981. The SCAC and TAC no
`longer identify the MFPP as the basis for Featured Offer disqualification; instead, they allege it is
`SC-FOD. SCAC ¶¶ 22-24; TAC ¶¶ 13-15.
`Third, as to monopoly power, Amazon does not raise this or any other argument to delay.
`Discovery is proceeding; Plaintiffs are continuing to receive documents productions. Plaintiffs
`delayed filing these amended complaints, waiting to pattern them after the California Attorney
`General (“CAAG”) Complaint filed in September 2022 and the FTC Complaint filed in September
`2023. Compl., California v. Amazon.com, Inc. (Cal. Super Ct. 2022); Compl., FTC v.
`Amazon.com, Inc., No. 2:23-cv-01495 (W.D. Wash. 2023), Dkt. 171. The issues raised in this
`motion could have been resolved by an amended complaint filed promptly after the CAAG action.
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 3
`
`Davis Wright Tremaine LLP
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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 10 of 18
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`The Court should exercise its discretion to consider the points raised in this dispositive motion.
`B.
`Plaintiffs’ Section 1 Claims Fail.
`1.
`SC-FOD Is Not an Agreement.
`The Complaints concede that SC-FOD is a “tool” or “algorithm” that Amazon unilaterally
`introduced. Mot. 6-8; SCAC ¶¶ 22-23, 26; TAC ¶¶ 13-14, 17. Plaintiffs nevertheless claim that
`SC-FOD is a “tacit agreement” and that SC-FOD is a mechanism that Amazon uses “to enforce
`the express, written MFN policies” in the BSA. Opp. 7-8. Neither argument has merit.
`There is no plausible allegation that SC-FOD is a “tacit agreement.” An agreement requires
`“a conscious commitment to a common scheme designed to achieve an unlawful objective.”
`Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984). Plaintiffs do not allege that
`SC-FOD is, or is part of, any agreement between Amazon and its sellers. They concede that SC-
`FOD is not incorporated in the BSA. Opp. 7.
`Plaintiffs’ reliance on the Court’s prior rulings is misplaced because those rulings focused
`on the BSA—not SC-FOD. E.g., Frame-Wilson, 591 F. Supp. 3d at 981; De Coster v.
`Amazon.com, Inc., 2023 WL 372377, at *2 (W.D. Wash. 2023). Plaintiffs also claim that SC-FOD
`“results in sellers changing their prices on or off Amazon.” Opp. 2-3. But this alleged result does
`not distinguish between an agreement and a unilateral policy. Plaintiffs’ argument contravenes
`Twombly’s requirement that a plaintiff identify “allegations plausibly suggesting (not merely
`consistent with) agreement.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007); see also
`Karraa v. City of L.A., 2020 WL 6882947, at *4 (C.D. Cal. 2020) (insufficient to plead “unilateral
`conduct purportedly undertaken in furtherance of the conspiracy” to make out Section 1 claim).
`None of Plaintiffs’ cited authorities turns a unilateral practice, like SC-FOD, into concerted
`action. American Needle v. National Football League involved a licensing agreement between
`National Football League Properties (“NFLP”), an association comprising the various National
`Football League (“NFL”) teams, with a licensee. 560 U.S. 183, 186 (2010). The Court addressed
`whether the NFL, NFLP, and NFL teams were a single economic enterprise incapable of
`conspiring with each other to satisfy Section 1’s concerted-action requirement. Id. The case does
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`(2:20-CV-00424-JHC) - 4
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`Davis Wright Tremaine LLP
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`920 Fifth Avenue, Suite 3300
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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 11 of 18
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`not concern any “tacit agreement.”3
`United States v. Delta Dental of Rhode Island is also inapposite. 943 F. Supp. 172 (D.R.I.
`1996). The case involved a Section 1 claim based on Delta Dental’s “Prudent Buyer” policy, “a
`contractual clause to which Delta dentists expressly agree to comply.” Id. at 175. Here, by
`contrast, Plaintiffs acknowledge that SC-FOD is not incorporated into the BSA. Opp. 7.4
`Moreover, SC-FOD is not a mechanism to “enforce” other alleged practices. Opp. 7. As
`shown by Plaintiffs’ allegations, SC-FOD operates differently from the former Parity Provision,
`and from the other alleged “MFN policies.” E.g., SCAC ¶ 17 (Parity Clause); id. ¶¶ 29-31 (ASB);
`id. ¶ 32 (Seller Code of Conduct); id. ¶ 33 (MFPP). “SC-FOD disqualifies a seller’s offer from
`winning the coveted ‘Buy Box’ if Amazon finds a price that is even one cent lower for that product
`on any online store that Amazon deems a ‘Select Competitor.’” Opp. 4-5 (citing SCAC ¶ 23; TAC
`¶ 14). By contrast, (1) the MFPP only addresses “setting a price on a product or service on Amazon
`that is significantly higher than recent prices offered on or off Amazon,” SCAC ¶ 33 n.56; (2) the
`Seller Code of Conduct says that sellers should not engage in “schemes” “designed to drive
`customers to products that are listed and sold” off Amazon “without” the same “incentives” as are
`offered on Amazon; and (3) ASB establishes standards for “brand owners” selling in Amazon’s
`store. Opp. 5. Plaintiffs’ argument that SC-FOD is the mechanism for enforcing other practices,
`when it differs materially from these other practices, is a “leap in logic” that “cannot defeat an
`otherwise proper motion to dismiss.’” Belstone Cap., LLC v. Bellstone Partners, LLC, 2017 WL
`1153111, at *5 (E.D. Cal. 2017).
`
`3 Arandell Corp. v. Centerpoint Energy Services, Inc. acknowledged “a concert of action” is
`required, and involved a price-fixing scheme—a prototypical Section 1 conspiracy—not a tacit
`agreement based on unilateral conduct. 900 F.3d 623, 634 (9th Cir. 2018).
`4 The conspiracy-to-monopolize count in Frame-Wilson, TAC ¶¶ 240–50, also requires an
`agreement and should be dismissed for this reason as well, Lenhoff Enters., Inc. v. United Talent
`Agency, 2015 WL 7008185, at *3 (C.D. Cal. 2015); IIIB Philip E. Areeda & Herbert Hovenkamp,
`Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶ 809 (4th ed. 2015)
`(“Any arrangement that could be considered a ‘conspiracy’ to monopolize [under § 2] must
`necessarily also be an unreasonable ‘contract,’ ‘combination,’ or ‘conspiracy’ in restraint of trade
`offending § 1.”).
`
`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 5
`
`Davis Wright Tremaine LLP
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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 12 of 18
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`2.
`
`Plaintiffs Fail to Allege Anticompetitive Effects for the Non-SC-FOD
`“Agreements.”
`
`Plaintiffs allege in conclusory fashion that the challenged practices together, in some
`amorphous way, “prevent merchants from listing their goods at lower prices on other platforms
`and prevent other online retail marketplaces from competing with Amazon.” Opp. 10. As a matter
`of law, a “series of unilateral acts that do not violate the antitrust laws” may not “be aggregated
`into an unlawful ‘course of conduct.’” E.g., Eatoni Ergonomics, Inc. v. Rsch. In Motion Corp.,
`826 F. Supp. 2d 705, 710 (S.D.N.Y. 2011), aff’d, 486 F. App’x 186 (2d Cir. 2012); Pac. Bell Tel.
`Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 457 (2009) (“declining invitation to” take two
`claims that separately could not succeed, and “alchemize them into a new form of antitrust liability
`never before recognized by this Court”); Dreamstime.com, LLC v. Google LLC, 54 F.4th 1130,
`1142 (9th Cir. 2022) (“Because each individual action alleged by [plaintiff] does not rise to
`anticompetitive conduct in the relevant market, their collective sum likewise does not.”).5
`Plaintiffs must identify specific effects from each challenged practice and “sketch the outline of
`the injury to competition with allegations of supporting factual detail”—here, by identifying an
`actual link between the practice and the alleged harm to competition, Featured Office
`disqualification, on which the SCAC and TAC overwhelmingly focus. Brantley v. NBC Universal,
`Inc., 675 F.3d 1192, 1198 (9th Cir. 2012); Mot. 3-4 (citing SCAC).6 Plaintiffs fail to do so.
`
`5 Plaintiffs argue that aggregation is allowed, citing this Court’s decision in Brown v. Amazon.com,
`Inc., which addressed whether Amazon’s margin agreements with certain of its vendors could be
`aggregated to assess market power—not whether different forms of alleged conduct could be
`aggregated to assess anticompetitive effects. 2023 WL 5793303 (W.D. Wash. 2023). In
`concluding that the vendor agreements could be aggregated, the Court relied on Orchard Supply
`Hardware LLC v. Home Depot USA, Inc., 967 F. Supp. 2d 1347 (N.D. Cal. 2013). Subsequently,
`the court in In re Amazon.com, Inc. eBook Antitrust Litigation explained, Orchard Supply, as well
`as other decisions allowing aggregation, “all concerned some type of exclusive dealing
`agreement.” 2023 WL 6006525, at *25 (S.D.N.Y. 2023). There are no exclusive dealing
`allegations here.
`6 In In re Mission Health Antitrust Litigation, the claimant did not have “access to the allegedly
`anticompetitive contracts.” 2024 WL 759308, at *9 (W.D.N.C. 2024). Here, Plaintiffs have
`received significant document discovery.
`
`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 6
`
`Davis Wright Tremaine LLP
`LAW OFFICES
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`Seattle, WA 98104-1610
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`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 13 of 18
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`Former Parity Provision. Plaintiffs identify no allegation about if or how the Parity
`Provision was enforced, much less that it was enforced by Featured Offer disqualification. Opp.
`12. The lone paragraph Plaintiffs cite from the Complaints, SCAC ¶ 22; TAC ¶ 13, alleges that
`the Parity Provision and Buy Box eligibility algorithm were separate means to accomplish the
`same goal. Plaintiffs repeat their allegations concerning a German tribunal’s conclusions but fail
`to reconcile the differences in foreign law that Amazon raised. Mot. 9-10; Opp. 12 (citing SCAC
`¶¶ 140-47).
`Amazon Standards for Brands. Plaintiffs fail to identify any link between ASB and the
`“Featured Offer,” citing instead allegations about third-party sellers’ purported “constant fear that
`their accounts will be suspended, or that top selling products will be removed,” Opp. 13 (citing
`SCAC ¶¶ 29, 31; TAC ¶ 22), and a boilerplate allegation concerning “MFN policies” in the
`aggregate, id. (citing SCAC ¶ 37; TAC ¶ 29). Plaintiffs fail to identify any requirement in the
`ASB program requiring parity, or any third-party seller who understood it as such. “Conclusory
`allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.”
`Harper v. Nedd, 71 F.4th 1181, 1184 (9th Cir. 2023).
`Marketplace Fair Pricing Policy. The Fair Pricing Policy, as Plaintiffs allege, prohibits
`sellers from “setting a price on a product or service on Amazon that is significantly higher than
`recent prices offered on or off Amazon.” SCAC ¶ 33 n.57; TAC ¶ 24 n.43. This is not a parity
`requirement. Plaintiffs cite a paragraph in the Complaints footnoting a news article about the
`parity provision, SCAC ¶ 123 n.171; TAC ¶ 121 n.160, and another paragraph about purported
`effects of “MFN” policies in the aggregate, see SCAC ¶ 23; TAC ¶ 14. Neither supports Plaintiffs’
`claim that MFPP is a de facto continuation of the Parity Provision. Mot. 11; Opp. 12.
`Seller Code of Conduct. Plaintiffs do not connect a violation of the Seller Code of Conduct
`(or its “Clarification”) to Featured Offer disqualification or parity. Opp. 13. Their allegations
`acknowledge that Amazon merely said that sellers should not engage in “schemes” that are
`“designed to drive customers to products that are listed and sold” off Amazon “without” the same
`“incentives” as are offered on Amazon. SCAC ¶ 32; TAC ¶ 23. Rather than explain how the
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`AMAZON’S REPLY IN SUPPORT OF MOTION TO DISMISS
`(2:20-CV-00424-JHC) - 7
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
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`
`

`

`Case 2:21-cv-00693-JHC Document 158 Filed 06/24/24 Page 14 of 18
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`Seller Code of Conduct is enforced, if at all, Plaintiffs resort to general allegations concerning
`“MFN policies,” SCAC ¶ 2, TAC ¶ 2, which is insufficient, Eatoni, 826 F. Supp. 2d at 709-10.
`C.
`Plaintiffs’ Section 2 Claims Fail.
`1.
`Plaintiffs’ Monopoly Claims Based on SC-FOD Are Time-Barred.
`Because Plaintiffs concede that Amazon implemented SC-FOD in 2015, Mot. 12, their
`claim that Amazon acquired or maintained a monopoly based on SC-FOD is untimely.
`Plaintiffs’ new claims about SC-FOD do not relate back to their original complaint, which
`did not “hint” that Plaintiffs would try to base claims on a unilateral, internal Amazon algorithm,
`rather than an agreement with third-party sellers. E.g., Fox v. Good Samaritan Hosp.