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`Plaintiff,
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`ANDREA SEBERSON,
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`
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`v.
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`AMAZON.COM, INC.,
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`
`
`Case No.
`CLASS ACTION COMPLAINT
`
`JURY TRIAL DEMANDED
`
`Defendant.
`
`Plaintiff Andrea Seberson brings this Complaint against Defendant Amazon.com, Inc.
`
`(“Amazon” or “Defendant”), on behalf of herself and all others similarly situated, based upon
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`personal knowledge and upon information, investigation, and belief of counsel.
`
`INTRODUCTION
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`1.
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`This case is about a betrayal of trust. Since its inception in 1994 as an online
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`bookseller operating out of founder Jeff Bezos’s garage, Amazon—today a tech behemoth worth
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`$1.77 trillion1—has cultivated a relationship with consumers that has garnered the company
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`“astounding” customer loyalty.2 Ultimately, however, Amazon’s nominal mission of “striv[ing] to
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`offer … customers the lowest possible prices, the best available selection, and the utmost
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`
`1 Amazon Net Worth 2006–2021 | AMZN, MACROTRENDS (last visited July 6, 2021),
`https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-worth.
`2 Pamela N. Danzinger, Amazon’s Astounding Customer Loyalty Is Astounding, FORBES (Jan. 10,
`2018), https://www.forbes.com/sites/pamdanziger/2018/01/10/amazons-customer-loyalty-is-
`astounding/?sh=f42c81511fe3.
`
`CLASS ACTION COMPLAINT - 1
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
`
`
`
`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 2 of 59
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`
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`convenience” came into direct conflict with Amazon’s ambition to dominate every sector of the
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`economy. Faced with a choice between doing right by its customers or gaining market power in
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`one of the many industries it seeks to control, Amazon made the wrong choice, jettisoning its
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`promise of the “lowest possible prices” and violating the antitrust laws in a way that has injured—
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`and continues to injure—hundreds of millions of its loyal customers.
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`2.
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`To understand how and why Amazon broke the antitrust laws and betrayed the trust
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`of its customers, one must begin with Amazon Prime, the company’s first ever membership
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`program, unveiled in February 2005.3 At the program’s inception, an annual membership fee of
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`$79 provided Prime members with unlimited two-day shipping at no extra cost and one-day
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`shipping for $3.99 per item.4
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`3.
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`Amazon CEO Jeff Bezos touted Prime as “all-you-can-eat express shipping.”5 At
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`the time, Amazon’s annual revenues were $8.49 billion6—only 2.2% of what they are today. Bezos
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`assured investors that, “[t]hough expensive for the Company in the short-term,” Prime would pay
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`off in the long-run because “it’s a significant benefit and more convenient for customers.
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`With Amazon Prime, there’s no minimum purchase to think about, and no consolidating orders—
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`two-day shipping becomes an everyday experience rather than an occasional indulgence.”7
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`4.
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`Since its inception, Amazon Prime has been “the linchpin of [the company’s]
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`growth strategy,” playing a large part in Amazon’s attaining control of about 65% to 70% of all
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`
`3 Amazon.com Announces Record Free Cash Flow Fueled by Lower Prices and Free Shipping;
`Introduces New Express Shipping Program – Amazon Prime, BUSINESS WIRE (Feb. 2, 2005)
`(accessed via LEXISNEXIS).
`4 Id.
`5 Id. (internal quotation marks omitted).
`6 Laurie J. Flynn, In a Well-Worked Pattern, Amazon’s Revenue Rises and Its Profit Drops, NY
`TIMES, at C4 (Feb. 2, 2007) (accessed via LEXISNEXIS).
`7 Id. (internal quotation marks omitted).
`
`CLASS ACTION COMPLAINT - 2
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 3 of 59
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`online marketplace sales in the United States,8 and resulting in singular customer loyalty from
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`Prime members,9 of which there are currently more than 140 million in the United States.10 The
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`loyalty of Amazon customers is astounding: 96% of Prime members are more likely to buy
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`products from Amazon than from other online retailers, and 89% of consumers who are not Prime
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`members are more likely to make a purchase on Amazon.com than on any other e-commerce
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`website.11
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`5.
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`The “Prime Badge,” which appears next to products on Amazon’s website that are
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`eligible for free, fast shipping to Prime members, conveys a powerful message to the 142.5 million
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`American consumers who currently pay $12.99 per month for Prime membership: “Trust us. It’s
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`authentic. It will get to your doorstep quickly, at no extra charge. You can buy it with a click.”12
`
`
`8 Investigation of Competition in Digital Markets, Majority Staff Report and Recommendations,
`House Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on
`the Judiciary, at 255 (Oct. 6, 2020) [hereinafter House Subcommittee Report], available at
`https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf.
`9 Danzinger, supra note 2.
`10 How Many People Have Amazon Prime, 99 FIRMS (last visited July 4, 2021),
`https://99firms.com/blog/how-many-people-have-amazon-prime.
`11 Kiri Masters, 89% Of Consumers Are More Likely To Buy Products From Amazon Than Other
`E-Commerce Sites: Study, FORBES (Mar. 20, 2019), https://www.forbes.com/sites/kirimasters/
`2019/03/20/study-89-of-consumers-are-more-likely-to-buy-products-from-amazon-than-other-e-
`commerce-sites/?sh=6471bf5b4af1.
`12 Ron Knox & Shaoul Sussman, How Amazon Used the Pandemic to Amass More Monopoly
`Power, THE NATION (June 26, 2020), https://www.thenation.com/article/politics/amazon-bezos-
`pandemic-monopoly/.
`
`CLASS ACTION COMPLAINT - 3
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 4 of 59
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`6.
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`As with traditional brick-and-mortar retail businesses, the biggest factor in running
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`a successful business online is location, location, location. And Amazon has the most valuable
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`online real estate for the millions of Sellers who offer their products through Amazon.com: the
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`“Buy Box,” which is the section on the right side of an Amazon product detail page where
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`customers can add a product to their cart or “buy now”:
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`CLASS ACTION COMPLAINT - 4
`
`
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 5 of 59
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`7.
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`The importance of the Buy Box to Sellers is evidenced by the fact that—rather than
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`comparison shopping to see whether another Seller on Amazon’s website is offering a better deal
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`on a product—90% of consumer purchases on Amazon’s website are made through the Buy Box.13
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`This is because consumers trust that the product offer placed in front of them on Amazon.com—
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`namely, the offer in the Buy Box—is the best deal on that product.
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`8.
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`Unfortunately, Amazon has abused the trust and loyalty of the many millions of
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`Americans for whom the company’s website is the first and last stop for purchasing everything
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`from a $19.99 package of baby diapers to a $4,999 digital camera.
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`9.
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`Amazon expanded, and ultimately entrenched, its dominant market power in online
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`retail by sustaining losses for much of its first 20 years—losses that resulted from the company’s
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`strategy of engaging in below-cost pricing to engender extreme customer loyalty and ensure that
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`Amazon would become consumers’ one-stop-shop.14
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`10.
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`But Amazon’s ambitions lay far beyond just being the largest online retailer in the
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`world. As Amazon’s market power in online retail grew, the company branched out to become
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`(among other things) a marketing platform, a delivery and logistics network, a payment service, a
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`credit lender, an auction house, a major book publisher, a producer of television and films, a
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`fashion designer, a hardware manufacturer, and a leading provider of cloud server space and
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`computing power.15
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`11.
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`To drive its aggressive efforts to expand into—and dominate—these and other
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`markets, Amazon leveraged and exploited its most valuable asset: the immense brand loyalty of
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`
`13 Leanna Ziebak, How to Win the Amazon Buy Box in 2021, TINUITI (Mar. 25, 2020),
`https://tinuiti.com/blog/amazon/win-amazon-buy-box/.
`14 See Lisa M. Khan, Amazon’s Antitrust Paradox, 126 YALE L.J. 564, 747–53 (2017).
`15 Khan, Amazon’s Antitrust Paradox, supra note 14, at 754.
`
`CLASS ACTION COMPLAINT - 5
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 6 of 59
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`its customers. In doing so, Amazon both violated the antitrust laws and harmed hundreds of
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`millions of consumers.
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`12.
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`In 2006, just one year after launching its Prime membership program Amazon
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`launched Fulfillment by Amazon (“Fulfillment services” or “FBA”), a logistics service that
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`provides warehousing, packing, and shipping to third-party sellers (“Sellers”), who account for
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`over 50% of the items purchased through Amazon.com.16
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`13.
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`From the inception of its Fulfillment services, Amazon’s goal was to dominate the
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`$1.5 trillion-per-year shipping and logistics industry. Unlike e-commerce, however, the “logistics
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`[industry was] filled with worthy competitors that ha[d] dominated the industry for a century”—
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`FedEx, UPS, and the U.S. Postal Service.17
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`14.
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`The question for Amazon was how to quickly gain customers for its Fulfillment
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`services so that it could rapidly expand its logistics footprint.
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`15.
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`The company’s answer to this question is emblematic of its ruthless and
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`anticompetitive business strategy: Amazon decided to simply force Sellers to purchase its
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`Fulfillment services.
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`16.
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`This strategy was viable because of the immense power that Amazon has over
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`Sellers. Of the 2.3 million active third-party Sellers from around the world, about 37%—or
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`850,000—of Sellers “rely on Amazon as their sole source of income.”18
`
`
`16 Tugba Sabanoglu, Percentage of paid units sold by third-party sellers on Amazon platform as
`of 1st quarter 2021, STATISTA (May 7, 2021), https://www.statista.com/statistics/259782/third-
`party-seller-share-of-amazon-platform/.
`17 Erica Pandey, The race to dominate the $1.5 trillion business of moving stuff, AXIOS (May 17,
`2019), https://www.axios.com/amazon-race-dominate-logistics-shipping-ups-fedex-dhl-
`b652dbf0-abef-4505-9630-1107fdacb535.html.
`18 House Subcommittee Report, supra note 8, at 249.
`
`CLASS ACTION COMPLAINT - 6
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 7 of 59
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`17.
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`The company’s power over Sellers stems from its complete control over whether a
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`Seller’s product is even shown to an Amazon shopper.
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`18.
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`Amazon exercises this control through the Buy Box: products offered by sellers
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`with a Prime Badge are placed higher in Amazon’s search results and are generally the only
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`products featured in the Buy Box, through which 90% of consumer purchases on Amazon.com are
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`made.
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`19.
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`To force Sellers to switch to its Fulfillment services, Amazon conditioned a Seller’s
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`access to the Prime Badge—and with it, placement in the Buy Box—on a Seller’s purchasing
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`Fulfillment by Amazon.
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`20.
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`As documented in a report resulting from a year-long investigation by a U.S. House
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`Subcommittee (“House Subcommittee Report”), Sellers need a Prime Badge to “maintain a
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`favorable search result position, to reach Amazon’s more than 112 million Prime members, and to
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`win the Buy Box,”19 and purchasing “FBA is functionally the only way for sellers to get the Prime
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`Badge for their product listings.”20
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`21.
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`In other words, Amazon has forced Sellers to buy its Fulfillment services by
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`designing its Buy Box algorithm so that “[t]he variable that has the greatest impact on the Buy
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`Box is the product’s fulfillment method. Since Amazon considers its fulfillment service to have
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`perfect metrics across variables, using Fulfillment By Amazon (FBA) is the easiest way to increase
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`your chances of winning the Buy Box.”21
`
`
`19 House Subcommittee Report, supra note 8, at 288.
`20 House Subcommittee Report, supra note 8, at 287 (emphasis added).
`21 Eyal Lanxner, The Amazon Buy Box: How It Works for Sellers, and Why It’s So Important,
`BIGCOMMERCE (last visited Mar. 15, 2021), https://www.bigcommerce.com/blog/win-amazon-
`buy-box/.
`
`CLASS ACTION COMPLAINT - 7
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 8 of 59
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`22.
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`Thus, if two Sellers—one of whom pays for Amazon’s Fulfillment services while
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`the other doesn’t—offer the same product on Amazon.com, the Seller who pays Amazon for
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`Fulfillment services will “win” the Buy Box and make the sale, even if the competing Seller offers
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`a lower total price and faster, more reliable shipping.
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`23.
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`In antitrust terms, Amazon’s forcing Sellers into purchasing its Fulfillment services
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`constitutes an unlawful “tying arrangement.” Placement in the Buy Box is the “tying” product or
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`service and Sellers are the “buyers.”22 Access to the Buy Box is completely controlled by Amazon,
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`and Amazon’s algorithm assures that only products with the Prime Badge are offered through the
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`Buy Box. Fulfillment by Amazon is the “tied” product or service, which Sellers must purchase to
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`obtain access to the Buy Box. In short, “Amazon is tying the outcomes it generates for sellers using
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`its retail platform to whether they also use its delivery business.”23
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`24.
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`Amazon’s anticompetitive conduct harms Sellers because it permits Amazon to
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`charge “increased fees for compulsory fulfillment … services.”24 As one Seller reported in a letter
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`sent to federal lawmakers in 2019, “Amazon raised logistics fees by 20% over the [previous] four
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`years until they cost as much as 35% more than competing services.”25
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`25.
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`Amazon’s violation of the antitrust laws also has injured and continues to injure
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`Plaintiff and Class Members, who pay higher prices when shopping on Amazon.com than they
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`would but for Amazon’s unlawful conduct. The higher prices inflicted on Plaintiff and other
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`consumers are a predictable and well-documented direct effect of Amazon’s anticompetitive
`
`
`22 Technically, Amazon is limiting access to the Prime Badge. But the Prime Badge is what gains
`a Seller access to the Buy Box, where the sale is made.
`23 Khan, Amazon’s Antitrust Paradox, supra note 14, at 779.
`24 House Subcommittee Report, supra note 8, at 292.
`25 Spencer Soper, Amazon Accused of Forcing Up Prices in Antitrust Complaint,
`BLOOMBERG NEWS (Nov. 8, 2019) (emphasis added), https://www.bloomberg.com/news/articles/
`2019-11-08/amazon-merchant-lays-out-antitrust-case-in-letter-to-congress.
`
`CLASS ACTION COMPLAINT - 8
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 9 of 59
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`conduct—one that is known to Amazon and Sellers, but is hidden from Amazon’s hundreds of
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`millions of loyal customers.
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`26.
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`Amazon’s anticompetitive conduct directly leads to higher prices for Amazon.com
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`shoppers through several mechanisms.
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`27.
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`First, the algorithm that is the linchpin of Amazon’s unlawful scheme gives the
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`coveted Buy Box placement (the tying product) to products sold by Amazon and Sellers who use
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`its Fulfillment services (the tied product), even when the identical product is offered for a lower
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`total price and faster shipping by a Seller who controls its own handling and shipping—a practice
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`that Amazon refers to as “Fulfillment by Merchant” or “FBM.”
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`28.
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`Because “[m]ost Amazon shoppers end up clicking ‘add to cart’ for the offer
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`highlighted in the buy box”—again, 90% of purchases on Amazon.com are made through the Buy
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`Box—consumers pay more than they would have absent Amazon’s anticompetitive scheme to
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`leverage its power over e-commerce to conquer the logistics market.
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`29.
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`Amazon’s manipulative pricing is well documented. For example, a 2016
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`investigation by ProPublica tracked “250 frequently purchased products [on Amazon.com] over
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`several weeks,” and found that “[a]bout three-quarters of the time, Amazon placed its own products
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`and those of companies that pay for its services in [the Buy Box] even when there were
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`substantially cheaper offers available from others.”26
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`30.
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`Second, because an offer from a Seller who pays for Fulfillment by Amazon “wins”
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`the Buy Box over an offer from a non-FBA Seller who offers the identical product for a lower
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`price and with faster delivery, price competition among third-party Sellers on Amazon.com is
`
`
`26 Julia Angwin & Surya Mattu, Amazon Says It Puts Customers First. But Its Pricing Algorithm
`Doesn’t, PROPUBLICA (Sept. 20, 2016) (emphasis added), https://www.propublica.org/article/
`amazon-says-it-puts-customers-first-but-its-pricing-algorithm-doesnt.
`
`CLASS ACTION COMPLAINT - 9
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 10 of 59
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`greatly reduced. With the price competition among Sellers most likely to be featured in the Buy
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`Box significantly diminished, items in the Buy Box are priced higher than they would be but for
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`Amazon’s anticompetitive scheme. And because 90% of purchases on Amazon.com are made
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`through the Buy Box, consumers pay higher prices than they would have absent Amazon’s market
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`manipulation.
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`31.
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`Third, Amazon charges more for Fulfillment by Amazon than its competitors in the
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`logistics industry do for comparable services,27 and Sellers pass on a significant portion of this
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`extra cost to consumers in order to meet their margins. As one Seller reported to federal lawmakers,
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`using “Amazon’s [Fulfillment] service forced him to boost prices by as much as 12% on more than
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`100 products he’s been selling on Amazon for years.”28
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`32.
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`Fourth, since many items on Amazon’s website are sold by both Amazon and its
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`Sellers, the higher prices charged by Sellers who use Amazon’s Fulfillment services enable
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`Amazon to price its products higher than it otherwise would have because its primary
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`competitors—the Sellers on its platform—are charging higher prices as a result of Amazon’s
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`unlawful leveraging of its market power in e-commerce to take over the logistics market.
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`33.
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`Amazon is profiting handsomely from its unlawful tying scheme. Because a
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`Seller’s revenues are directly tied to their purchasing Fulfillment by Amazon (effectively a
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`prerequisite for a Seller to appear in the Buy Box), Amazon can and does charge Sellers
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`supra-competitive prices for its Fulfillment services. And since Amazon’s unlawful conduct causes
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`Sellers to increase prices, Amazon collects higher “referral fees”—in most cases, a percentage of
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`27 See, e.g., Soper, Amazon Accused of Forcing Up Prices, supra note 25 (“The merchant’s letter
`says Amazon raised logistics fees by 20% over the past four years until they cost as much as
`35% more than competing services.”).
`28 Soper, Amazon Accused of Forcing Up Prices, supra note 25.
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`CLASS ACTION COMPLAINT - 10
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`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 11 of 59
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`the total sales price29—from Sellers. In addition, the higher prices that Sellers must charge to pay
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`for Fulfillment services and meet their margins allow Amazon to charge higher prices than it would
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`but for its unlawful conduct.
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`34.
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`The economic harm that Amazon’s scheme has inflicted on consumers is difficult
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`to overstate. Approximately $197 billion in products was sold by Amazon alone through Amazon’s
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`website in 2020.30 This does not include the products sold by Sellers, who in 2020 accounted for
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`52% of products sold on Amazon.com.31
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`35.
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`Given that Amazon takes 30% of Sellers’ revenues in the form of fees32 and that
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`these fees garnered the company $80.46 billion dollars in U.S. sales in 2020,33 consumers purchase
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`approximately $268 billion from third-party Sellers through Amazon.com last year.34 This brings
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`the total that shoppers spent on Amazon.com in 2020 to approximately $465 billion—the
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`$197 billion spent on products sold by Amazon plus the $268 billion spent on products sold by
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`Sellers.
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`29 In most cases, the referral fees that Amazon collects from Sellers are a percentage of the total
`sales price. See Selling on Amazon Fee Schedule, AMAZON (last visited June 29, 2021),
`https://sellercentral.amazon.com/gp/help/external/200336920.
`30 Amazon.com, Inc. Form 10-K for Fiscal Year Ending on December 31, 2020.
`31 Fareeha Ali, What percentage of products on Amazon are sold by marketplace sellers?,
`DIGITAL COMMERCE 360 (Apr. 29, 2021), https://www.digitalcommerce360.com/2021/04/29/
`what-percentage-of-products-on-amazon-are-sold-by-marketplace-sellers/.
`32 Stacy Mitchell, Ron Know & Zach Freed, Amazon’s Monopoly Tollbooth 3, INSTITUTE FOR
`LOCAL SELF-RELIANCE (July 2020), available at https://ilsr.org/wp-content/uploads/2020/07/
`ILSR_Report_AmazonTollbooth_Final.pdf.
`33 Daniela Coppola, Annual net revenue of Amazon from 2006 to 2020, by segment, STATISTA
`(July 7, 2021), https://www.statista.com/statistics/266289/net-revenue-of-amazon-by-region/.
`34 $80.46 billion ÷ 0.30 = $268.2 billion.
`
`CLASS ACTION COMPLAINT - 11
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 12 of 59
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`36.
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`Amazon has forced the vast majority of Sellers to purchase its Fulfillment services.
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`As a result, 73% of all Sellers now use Fulfillment by Amazon.35 The Buy Box, through which
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`90% of purchases on Amazon.com are made, presents consumers with offers from Amazon or
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`FBA Sellers.
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`37.
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`The Seller who complained to federal lawmakers reported as much as a 12%
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`increase in his prices as a result of Amazon’s unlawful conduct. Assuming that, but for Amazon’s
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`anticompetitive conduct, the prices of items purchased through the Buy Box were on average
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`higher by even a tenth of what this Seller reported (i.e., 1.2% higher)—a conservative estimate
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`given that Amazon takes 30% Seller revenues in fees—Amazon’s violations of the antitrust laws
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`overcharged consumers by approximately $5 billion in 2020 alone, and billions of dollars more
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`over the preceding years.
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`38.
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`Amazon’s leveraging of its market power in e-commerce to attain dominance in the
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`logistics market violates both Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2).
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`39.
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`Amazon’s tying arrangement is a per se violation of Section 1 of the Sherman Act
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`because Amazon has significant—indeed, monopoly-level—power over the Prime Badge, the Buy
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`Box, and e-commerce generally, and Amazon uses that power to force Sellers into purchasing
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`Amazon’s Fulfillment services.
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`40.
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`Amazon’s conduct also violates Section 2 of the Sherman Act because (i) Amazon
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`has monopoly-level power in several markets—the U.S. online retail-goods market and the market
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`for favorable Seller placement on the Amazon website (i.e., the granting of the Prime badge, which
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`garners higher placement in search results and access to the Buy Box)—and (ii) Amazon has used
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`35 House Subcommittee Report, supra note 8, at 288, 290 (stating that 73% of all Sellers use
`Amazon’s Fulfillment services, even though many Sellers would prefer to use other logistics
`companies to warehouse, package, and ship their products).
`
`CLASS ACTION COMPLAINT - 12
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 13 of 59
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`that monopoly-level power to foreclose competition, to gain advantage, and to destroy competitors
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`in the market for the warehousing, packing, and shipping of retail goods to consumers.
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`41.
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`In sum, Amazon’s unlawful use of its monopoly-level power has given it an edge
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`in the logistics market, forced Sellers to pay supra-competitive prices for Fulfillment services, and
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`increased prices for Plaintiff and other consumers who shop on Amazon.com. Amazon’s unlawful
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`tying scheme harms hundreds of thousands of businesses and hundreds of millions of consumers.
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`The only winner is Amazon, which earns billions as a result of its uncompetitive conduct while
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`continuing to gain economic power in all markets it enters.
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`PARTIES
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`42.
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`Plaintiff Andrea Seberson is a natural person and a citizen of the State of Minnesota,
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`Hennepin County. During the relevant time period, Ms. Seberson made numerous purchases
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`through Amazon.com, almost exclusively through the Buy Box. Ms. Seberson was injured by
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`Amazon because, as a direct result of Amazon’s anticompetitive actions, she was overcharged for
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`the numerous items she purchased through the Buy Box.
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`43.
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`Defendant Amazon.com, Inc. is a Delaware corporation with a principal place of
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`business at 410 Terry Avenue North, Seattle, Washington 98109-5210. At all relevant times,
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`Amazon advertised, marketed, promoted, offered for sale, and sold goods throughout the United
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`States, including in this District.
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`JURISDICTION AND VENUE
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`44.
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`This action arises under Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2),
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`Section 4 of the Clayton Act (15 U.S.C. § 15(a)), and Section 16 of the Clayton Act (15 U.S.C.
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`§ 26). Plaintiff seeks damages for her injuries, as well as for injuries suffered by Class Members,
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`resulting from Amazon’s anticompetitive conduct. Plaintiff also seeks an injunction to prohibit
`
`CLASS ACTION COMPLAINT - 13
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
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`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 14 of 59
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`Amazon from continuing its unlawful conduct. This Court has subject matter jurisdiction under
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`28 U.S.C. § 1331 (federal question), 28 U.S.C. § 1332 (diversity), 28 U.S.C. § 1337(a) (antitrust),
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`and 15 U.S.C. § 15 (antitrust).
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`45.
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`Venue is proper in this District under 28 U.S.C. § 1391(b) and (c) because
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`Defendant Amazon maintains its corporate headquarters and principal place of business in this
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`District, transacts business within this District, and carries out interstate trade and commerce in
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`this district. Venue also is appropriate in this District under Section 12 of the Clayton Act, 15
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`U.S.C. § 22 (nationwide venue for antitrust matters).
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`FACTUAL ALLEGATIONS
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`A.
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`Unchecked Growth: It’s Always Day 1 at Amazon36
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`1.
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`46.
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`Amazon’s Prime Strategy of Losing Money to Make Money
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`Amazon is a behemoth in numerous markets: e-commerce, consumer electronics,
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`television and film production, groceries, cloud services, book publishing, and logistics.37 In 2020
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`alone, Amazon’s revenues were more than $386 billion, from which Amazon reaped a profit
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`of $21.3 billion.38
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`36 In his first letter to shareholders in 1997, Jeff Bezos wrote, “this is Day 1 for the Internet and,
`if we execute well, for Amazon.com.” Jeff Bezos, Amazon’s original 1997 letter to shareholders
`(last visited July 8, 2021), https://www.aboutamazon.com/news/company-news/amazons-
`original-1997-letter-to-shareholders. “Day 1” means “energy and dynamism”—“mak[ing]
`high-quality, high-velocity decisions.” Jeff Bezos, 2016 Letter to Shareholders (last visited
`July 8, 2021), https://www.aboutamazon.com/news/company-news/2016-letter-to-shareholders.
`In contrast, “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline.
`Followed by death. And that is why it is always Day 1.” Id. (internal quotation marks omitted).
`37 House Subcommittee Report, supra note 8, at 247.
`38 Amazon Company Profile, FORTUNE 500 (last visited June 29, 2021),
`https://fortune.com/company/amazon-com/fortune500/.
`
`CLASS ACTION COMPLAINT - 14
`
`TERRELL MARSHALL LAW GROUP PLLC
`936 North 34th Street, Suite 300
`Seattle, Washington 98103-8869
`TEL. 206.816.6603 FAX 206.319.5450
`www.terrellmarshall.com
`
`
`
`Case 2:21-cv-01009 Document 1 Filed 07/28/21 Page 15 of 59
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`47.
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`As of late 2020, Amazon had a 50% or higher share of U.S. retail e-commerce.39
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`Over the past 5 years, Amazon’s share of U.S. retail e-commerce has grown an average of 8% per
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`year.40 If Amazon keeps gaining market share at this rate for the next 5 years—and there is no
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`indication that Amazon’s rapacious growth is slowing down—the company will control 73.5%
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`of the U.S. retail e-commerce market by 2026.
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`48.
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`How is this possible, given that during Amazon’s first 20 years in business, Amazon
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`“generated a positive net income in just over half of its financial reporting quarters,” and even in
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`the profitable quarters, “its margins were razor-thin”?41
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`49.
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`As Lisa Khan, now the Chair of the FTC, wrote in her seminal article Amazon’s
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`Antitrust Paradox, Amazon established its “dominance as an online platform thanks to two
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`elements of its business strategy: [i] a willingness to sustain losses and invest aggressively at the
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`expense of profits, and [ii] integration across multiple business lines.”42
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`50.
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`By 1997, it was clear from Bezos’s own statements that “the premise of Amazon’s
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`business model was to establish scale,” and “[t]o achieve scale, the company prioritized growth”:43
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`[Interviewer]: In your prospectus you say, “The Company’s view … is
`that it will incur substantial losses for the foreseeable future.”
`Bezos: We’re not just covering ourselves. We’re disclosing the facts of the
`situation. We’re going to be unprofitable for a long time. And that’s our
`strategy.
`[Interviewer]: Presumably, at some point you probably don’t want to be
`showing a loss.
`Bezos: Long term, the only way companies generate value is by making
`profits.