Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 1 of 45
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`Case No. _____________________
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`CLASS ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`STEVEN FLOYD, on behalf of himself and all
`others similarly situated,
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`AMAZON.COM, INC., a Delaware
`corporation, and APPLE INC., a California
`corporation,
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`Plaintiff,
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`Defendants.
`
`v.
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`
`CLASS ACTION COMPLAINT
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`

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`I. 
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`II. 
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`III. 
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`IV. 
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 2 of 45
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`TABLE OF CONTENTS
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`Page
`INTRODUCTION ...............................................................................................................1 
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`JURISDICTION AND VENUE ..........................................................................................7 
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`PARTIES .............................................................................................................................8 
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`RELEVANT FACTS ...........................................................................................................8 
`
`A. 
`
`B. 
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`C. 
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`D. 
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`E. 
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`F. 
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`G. 
`
`H. 
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`Apple’s Dual Distribution Scheme – A Strategy of Scarcity ..................................8 
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`Amazon’s Dual Roles – A Marketplace and a Retailer .........................................10 
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`Apple and Amazon Compete With Each Other and Third-Party
`Merchants. ..............................................................................................................13 
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`There Was Active Marketplace Competition in the Sale of Apple
`Products Before the Unlawful Boycott Agreement. ..............................................14 
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`By Agreement, Amazon and Apple Excluded Nearly All Third-
`Party Merchants that Sell Apple Products on Amazon’s Platform
`and Eliminated the Competitive Threat They Posed. ............................................16 
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`The Unlawful Boycott Agreement Has Had Substantial
`Anticompetitive Effects. ........................................................................................19 
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`1. 
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`2. 
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`3. 
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`Consumers Were Harmed. .........................................................................19 
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`Third-Party Merchants Were Harmed. ......................................................22 
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`The Unlawful Boycott Agreement Reduced Output. .................................23 
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`Both Amazon and Apple Secured Anticompetitive Benefits from
`the Unlawful Boycott Agreement. .........................................................................23 
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`There is No Procompetitive Justification for the Unlawful Boycott
`Agreement, Much Less One Unattainable Through Less Restrictive
`Means. ....................................................................................................................24 
`
`V. 
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`RELEVANT MARKET.....................................................................................................25 
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`A. 
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`There is a Relevant Antitrust Market for Online Consumer
`Electronics Marketplaces. ......................................................................................25 
`
`a. 
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`Single-Merchant Online Stores Are Not Reasonable
`Substitutes. .....................................................................................26 
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`CLASS ACTION COMPLAINT - i
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 3 of 45
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`b. 
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`Brick-and-Mortar Stores Are Not Reasonable
`Substitutes ......................................................................................30 
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`B. 
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`C. 
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`D. 
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`The Relevant Geographic Market is the U.S. ........................................................31 
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`Amazon Has Substantial Market Power in the Market for U.S.
`Online Consumer Electronics Marketplaces. .........................................................32 
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`Amazon Would Have Market Power in a Broader Online
`Electronics Retail Market. .....................................................................................35 
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`VI. 
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`INTERSTATE TRADE AND COMMERCE ...................................................................35 
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`VII.  CLASS ALLEGATIONS ..................................................................................................35 
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`VIII.  ANTITRUST INJURY AND STANDING .......................................................................38 
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`IX. 
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`CLAIM FOR RELIEF .......................................................................................................38 
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`CLASS ACTION COMPLAINT - ii
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 4 of 45
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`Plaintiff Steven Floyd alleges the following upon personal knowledge as to himself and
`his own acts, and as to all other matters upon information and belief, based upon the
`investigation made by and through his attorneys and experts in the field of antitrust economics:
`I.
`INTRODUCTION
`Amazon operates the digital platform, Amazon Marketplace. Amazon
`1.
`Marketplace is the world’s largest online marketplace, where Amazon sells millions of goods as
`a retailer and also hosts more than 2.3 million third-party merchants, with whom it competes as a
`retailer in the sale of the same or similar goods on its own platform. Amazon is the largest
`online seller of electronics, with 82% of the market.1 In addition to hosting other third-party
`sellers, Amazon also sells Apple products (and other consumer electronics) on its own
`marketplace in its capacity as a retailer. Apple is the world’s largest technology company,
`specializing in the manufacture and sale of consumer electronics. Apple sells its products directly
`to consumers on its own online store and indirectly through third-party distributors, including
`Amazon. Direct sales to consumers is a major part of Apple’s business; Apple is the third largest
`online retailer in the United States.2
`2.
`In their capacities as online electronics retailers, Amazon and Apple are
`horizontal competitors, who compete for many of the same online customers in the sale of
`Apple’s own products and the sale of consumer electronics generally. Both Amazon and Apple
`have an economic incentive to sell as many Apple products as possible, and they compete to win
`ecommerce sales.
`3.
`Amazon and Apple compete not only against each other for retail customers, but
`also against the third-party merchants that sell consumer electronics, including Apple products,
`on Amazon Marketplace. Whenever a third-party merchant sells an iPhone on the Amazon
`Marketplace, that is an iPhone sale that neither Amazon (as a retailer) nor Apple (as a direct
`
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`1 2019 Jumpshot report, Losers Brands and Retailers Who Couldn’t Make It Happen in 2018
`at 21.
`2 Stephanie Chevalier, Market share of leading retail e-commerce companies in the United
`States as of June 2022, Statista (Aug. 26, 2022),
`https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-
`commerce/ (last visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 1
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 5 of 45
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`seller) will make. Vigorous competition from the third-party merchants exerts downward
`pressure on the online prices that both Apple and Amazon can charge for Apple products.
`4.
`This case concerns an unlawful horizontal agreement between Apple and Amazon
`to eliminate or at least severely reduce the competitive threat posed by third-party merchants.
`The agreement is a naked restraint and per se unlawful under the Sherman Act.
`5.
`Historically, there were never limits on the number of Apple resellers operating
`on Amazon’s marketplace.3 Amazon was one of those resellers, but there were hundreds of
`others. The ranks grew substantially in 2017, prompting active price competition. By the outset
`of 2018, at least 600 third-party Apple resellers were active on the platform. And prices were
`falling as a result, with third-party merchants offering steep discounts—sometimes exceeding 20
`percent—off the prices Apple charged on its own online store.
`6.
`This posed a problem for both Apple and Amazon. Apple has a history of
`maintaining high market prices for its products by withholding supplies from resellers that would
`otherwise undercut Apple’s own retail prices.4 Active price competition on Amazon
`Marketplace threatened to destabilize the high prices Apple seeks to sustain in its own stores.
`This was also a problem for Amazon. Displeased with active price competition on Amazon
`Marketplace, Apple refused to authorize Amazon to sell Apple’s most popular products. This
`forced Amazon to purchase Apple products from other sources and raised its acquisition costs.5
`As a retailer, Amazon’s own share of the sale of Apple products on Amazon Marketplace was
`virtually non-existent.
`7.
`Unable to overcome these challenges unilaterally, the two online giants—Apple
`and Amazon—decided in 2018 to address them collectively. They did so through a horizontal
`agreement that eliminated nearly all Apple resellers on Amazon Marketplace—their horizontal
`
`
`3 The Complaint refers to sellers of Apple products on Amazon’s platform as “third-party
`merchants” when describing them from the perspective of Amazon Marketplace and as “Apple
`resellers,” when describing them from the perspective of Apple’s distribution chain.
`4 See infra, Sec. IV.A.
`5 Autorita’ Garante della Concorrenza e del Mercato (AGCM) Nov. 16, 2021 decision, ¶ 76
`(“AGCM Decision”), https://www.agcm.it/dotcmsdoc/allegati-news/I842%20chiusura.pdf (last
`visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 2
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`competitors. In exchange for eliminating the Apple resellers that were driving down online
`prices for Apple products, Apple agreed to provide Amazon consistent supplies at a discount of
`up to 10%--contingent on its ability to keep the excluded sellers off Amazon Marketplace.6 This
`was accomplished by the Global Tenets Agreement, dated October 31, 2018, and made effective
`January 1, 2019 (hereinafter the “Unlawful Boycott Agreement”). The Unlawful Boycott
`Agreement, the existence of which neither Amazon nor Apple can dispute, authorized Apple to
`place a quantitative limit on the number of Apple resellers operating on Amazon Marketplace,
`and as consideration for Amazon’s consequent exclusion of hundreds of third-party merchants
`that sell Apple goods from its marketplace, Apple guaranteed a steady supply of Apple goods to
`Amazon (in its capacity as a retailer) at discounted wholesale prices. Pursuant to the Unlawful
`Boycott Agreement, Apple authorized just seven Apple resellers to sell on Amazon Marketplace
`in the United States. The remaining resellers (at least 600) had their Apple products removed
`from the platform by Amazon.
`
`8.
`The Unlawful Boycott Agreement transformed Amazon’s near-zero share of
`Apple iPhone and iPad sales on Amazon Marketplace to its current dominant position as
`depicted below—identifying the percentage of days in a month in which Amazon won the buy
`box for sales of Apple iPhones and iPads—which shows Amazon’s domination in sales after the
`agreement was reached:7
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`6 Id. ¶¶ 76, 195, 197.
`7 As discussed in Section IV.B, Amazon Marketplace employs an algorithm to select the
`offer to occupy the “buy box,” or one-click purchase offer that 90% of consumers rely on when
`they buy on Amazon Marketplace. Thus, competition for the buy box is the primary way that
`merchants, including Amazon, compete with each other on Amazon Marketplace.
`CLASS ACTION COMPLAINT - 3
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 7 of 45
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`The win for Amazon was a loss to consumers. With virtually all other Apple
` 9.
`resellers eliminated from the platform, price competition deteriorated almost immediately. The
`steep discounts on Apple products that consumers once enjoyed on Amazon Marketplace eroded,
`with prices rising steadily. The connection—between the decrease in sellers and increase in
`prices—is manifest in pricing data for iPhones and iPads, Apple’s flagship products:
`
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`CLASS ACTION COMPLAINT - 4
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 8 of 45
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`Overall, the data indicate that Amazon Marketplace prices on iPhones and iPads
`10.
`increased by more than 10 percent following, and resulting from, the Unlawful Boycott
`Agreement. Single damages to Plaintiff and the proposed Class are substantial.
`11.
`The merchants removed from the platform were likewise harmed. Amazon
`operates as the gatekeeper to the online retail market.8 For many third-party merchants, Amazon
`Marketplace is the only viable channel for reaching consumers.9 Excluded from the platform by
`virtue of the Unlawful Boycott Agreement, many merchants had nowhere to turn and could not
`and cannot compete in the market. As one congressional body has concluded, online merchants
`“who try to diversify sales across multiple platforms often report that they are unable to generate
`many sales outside of Amazon.”10
`
`
`8 Subcommittee on Antitrust, Commercial, and Administrative Law of the Committee on the
`Judiciary, 116th Cong., Investigation of Competition in Digital Markets, Majority Staff Report
`and Recommendations (“House Report”) at 256 (2020),
`https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf?utm_campaign=44
`93-519 (last visited Nov. 8, 2022).
`9 See AGCM Decision, ¶¶ 131-32 (finding that in Italy the Boycott agreement reduced online
`sales of some former third-party sellers by as much as 95%).
`10 House Report at 258.
`CLASS ACTION COMPLAINT - 5
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 9 of 45
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`At the expense of consumers, merchants, and competition as a whole, Amazon
`12.
`and Apple—who are horizontal competitors—profited handsomely from the Unlawful Boycott
`Agreement. With limited residual competition from third-party merchants that sell Apple
`products on Amazon’s platform (and by securing a steady, discounted supply of Apple products),
`Amazon transformed its position on Amazon Marketplace from a peripheral seller of Apple
`iPhones and iPads to the platform’s dominant seller, all while charging higher prices than
`consumers had previously enjoyed before the Unlawful Boycott Agreement. For Apple, the
`higher prices on Amazon’s platform meant that fewer of its customers defected to Amazon
`Marketplace, which stabilized the prices Apple could sustain on its own distribution channel. In
`purpose and effect, Amazon and Apple cut out the third-party merchants and divided the spoils.
`13.
`This case is thus not about Apple independently selecting its trading partners or
`Amazon independently enforcing its own platform rules. It is about two horizontal competitors
`agreeing to eliminate the competitive threat posed by hundreds of other horizontal competitors.
`Erecting barriers to entry to keep competitors out and raising prices in the wake of their
`elimination is precisely the kind of conduct that Congress enacted antitrust laws to prevent and
`cannot be justified on procompetitive grounds. This collusive agreement is what economists call
`a “group boycott” or “concerted refusal to deal.” These arrangements have longed been deemed
`per se unlawful under the Sherman Act. The litigated question typically involves whether the
`boycott agreement was in fact struck, or at least inferable from the circumstances. Here, there is
`no mystery. Amazon admitted to Congress that it entered an agreement with Apple that permits
`only “seven resellers of new Apple products” on its platform.11 The case is open and shut.
`14.
`The Unlawful Boycott Agreement can likewise not survive scrutiny under the
`“rule of reason,” were that standard applied. As set forth in this Complaint, there is a relevant
`U.S. market for Online Consumer Electronics Marketplaces. Amazon dominates this market
`
`
`11 See Amazon Responses to Questions for the Record following the July 16, 2019 Hearing
`of the Subcommittee on Antitrust, Commercial, and Administrative Law, Committee on the
`Judiciary, Entitled “Online Platforms and Market Power, Part 2: Innovation and
`Entrepreneurship” (October 11, 2019) (“Amazon’s Congressional Responses”), at Response to
`Question 94, https://docs.house.gov/meetings/JU/JU05/20190716/109793/HHRG-116-JU05-
`20190716-SD038.pdf (last visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 6
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 10 of 45
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`with an 82% share of the online retail electronics market and as much as 90% of the online retail
`marketplace sales.12 The Unlawful Boycott Agreement causes severe anticompetitive effects in
`this relevant market, and it cannot be justified as serving any procompetitive end.
`15.
`The Unlawful Boycott Agreement is thus unlawful under any applicable standard.
`It should be enjoined and Plaintiff, and the class Plaintiff seeks to represent, should be awarded
`damages and all other relief needed to make them whole.
`II.
`JURISDICTION AND VENUE
`This Court has subject matter jurisdiction over this action under 28 U.S.C. § 1331
`16.
`and 15 U.S.C. § 15(a) and § 26 because Plaintiff alleges violations of federal law, namely, the
`Sherman Act and Clayton Antitrust Act.
`17.
`This Court also has subject matter jurisdiction pursuant to the Class Action
`Fairness Act of 2005, 28 U.S.C. § 1332(d), because at least one Class member is of diverse
`citizenship from Amazon, there are more than 100 Class members nationwide, and the aggregate
`amount in controversy exceeds $5,000,000.
`18.
`This Court has personal jurisdiction over the Defendant Amazon, which is
`headquartered in this District, does business in Washington, directly or through agents, and has
`registered with the Washington Secretary of State, such that it has sufficient minimum contacts
`with Washington.
`19.
`This Court has personal jurisdiction over both Defendants under Section 12 of the
`Clayton Act, 15 U.S.C. § 22, because Defendants have each acted within one or more judicial
`districts of the United States and because they have sufficiently caused foreseeable consequences
`in this country. Through its substantial business operations in this District, this State, and
`throughout the country, Amazon has engaged in sufficient minimum contacts with the forum,
`and it has intentionally availed itself of the laws of the United States. This Court has personal
`jurisdiction over the Defendant Apple because Apple has engaged in substantial business
`
`
`12 2019 Jumpshot report; Amazon Marketplace is 25% of US E-commerce, Marketplace Pulse
`(Feb. 1, 2022), https://www.marketplacepulse.com/articles/amazon-marketplace-is-25-of-us-e-
`commerce (last visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 7
`Case No.
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 11 of 45
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`operations throughout the United States. Apple is incorporated in California and headquartered
`in Cupertino, California, and it sells its products directly to its retail customers throughout the
`United States through physical stores in nearly every state and through its online store as well as
`indirectly through hundreds of Apple resellers.13
`20.
`This judicial district is a proper venue pursuant to 28 U.S.C. § 1391(b)(1) and (2)
`because Amazon resides in this District and transacts affairs in this District. A substantial part of
`the events giving rise to Plaintiff’s claims occurred in this District. There is also a venue
`provision, specifying this judicial district under the terms of use for all Amazon customers.14
`III.
`PARTIES
`Plaintiff Steven Floyd is a resident of Williamsport, Pennsylvania.
`21.
`On February 26, 2021, Mr. Floyd purchased a new Apple iPad from the buy box
`22.
`on Amazon Marketplace for $319.99. Amazon was the seller of record. As a result of the
`Unlawful Boycott Agreement, Plaintiff was denied purchasing on Amazon Marketplace at a
`lower price which would have been the case in a normal competitive market.
`23.
`Defendant Amazon is a corporation organized and existing under the laws of
`Delaware, with its principal place of business in Seattle, Washington. Amazon is the world’s
`largest online retailer and operates the world’s largest online retail marketplace.
`24. Defendant Apple designs, manufactures, and sells iPhones and iPads, as well as
`other personal computers and smart watches, and its sells a variety of related peripheral products
`and services, which it sells throughout the United States. Apple maintains its headquarters and
`principal place of business in Cupertino, California.
`IV. RELEVANT FACTS
`Apple’s Dual Distribution Scheme – A Strategy of Scarcity
`25.
`Apple distributes its products through two channels. First, Apple maintains its
`own retails stores, including an online store and physical outlets. This is Apple’s direct
`
`A.
`
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`13 See https://www.apple.com/retail/storelist/ (last visited Nov. 8, 2022).
`14 Conditions of Use - Amazon Customer Service,
`https://www.amazon.com/gp/help/customer/display.html%3FnodeId%3DGLSBYFE9MGKKQX
`XM
`CLASS ACTION COMPLAINT - 8
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`distribution channel. Second, Apple distributes its products through a network of third-party
`distributors and resellers. To become an official Apple reseller (hereafter “Authorized
`Reseller”), retailers must enter into an Authorized Reseller Agreement with Apple. Authorized
`Resellers are offered discounts and rebates in exchange for their adherence to certain Apple
`terms and conditions governing the resale of Apple products.15 Apple reportedly has Authorized
`Reseller Agreements with Best Buy, Target, Staples, AT&T, and others.16
`26.
`Other Apple resellers purchase their supplies from wholesalers or other
`intermediaries in the chain of distribution. Unauthorized Apple resellers are not proscribed or
`illicit. While these resellers do not receive the discounts and rebates afforded Authorized
`Retailers, they are generally permitted to distribute Apple products through any retail channel
`available to them (putting aside the Unlawful Boycott Agreement at issue).
`27. While Apple benefits from its network of third-party distributors and resellers,
`who provide greater exposure for Apple’s products, Apple’s own profit margins are higher when
`it sells directly to consumers. Apple is thus incentivized to try to maintain a roster of Apple
`resellers to increase its products’ exposure and product reach while constraining these
`merchants’ sales to prevent consumers from defecting from Apple’s own stores. Apple has a
`track record of doing just this.
`28. Most recently, in 2020 Apple was fined €1.1 billion by the French competition
`authority for artificially restricting the distribution of its products through its two French
`wholesalers, including by dictating (and limiting) downstream distribution to retailers and fixing
`the retail prices at which Apple products could be sold.17 Upholding a reduced fine of €372
`million, the Court of Appeals of Paris concluded (based on its review of internal correspondence
`and the investigatory file) that Apple has “adopted a strategy of scarcity” such that “while
`
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`15 See AGCM Decision at ¶ 26. The AGCM Decision was annulled on procedural grounds,
`without any criticism of the agency’s factual or economic findings. The AGCM’s decision
`references and describes many primary source materials—including internal Apple and Amazon
`documents—and, where appropriate, this Complaint refers to the decision for that purpose.
`16 See https://appleinsider.com/deals/apple-authorized-resellers (last visited Nov. 8, 2022).
`17 See David McGabe, France Fines Apple $1.2 Billion for Antitrust Issues, New York Times
`(Mar. 16, 2020), https://www.nytimes.com/2020/03/16/technology/france-apple-antitrust-
`fine.html (last visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 9
`Case No.
`011121-11/2070390 V1
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`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 13 of 45
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`retailers received only limited quantities of constrained products from wholesalers, the Apple
`Store or Apple Online Store benefited from a large availability of these same products.” 18 By
`restricting third-party supply, Apple prevented resellers from competing with Apple’s own direct
`sales to consumers.19
`29.
`As set forth below, this case involves another iteration of the same overarching
`strategy of scarcity. The difference here is that Apple achieved scarcity not with conditions
`imposed on its wholesalers, but rather by entering a horizontal agreement with competitor and
`retail giant Amazon that outright eliminated virtually all other competitors from the world’s
`largest marketplace.
`B.
`Amazon’s Dual Roles – A Marketplace and a Retailer
`30.
`Amazon runs the largest online retail marketplace and the most visited
`ecommerce website in the world.20 The platform allows third-party merchants to list and sell
`products of all sorts, including consumer electronics. More than 2 million merchants list their
`goods on the platform,21 and more than 200 million consumers shop on Amazon’s marketplace
`every month.22 At least 60 percent of all online product searches in the U.S. begin on
`Amazon.com.23
`31.
`As a marketplace operator, Amazon charges third-party merchants listing fees
`(either a flat monthly fee of $39.99 or $0.99 per sale), as well as referral fees.24 Amazon also
`sells merchants shipping and logistics services through its “Fulfillment by Amazon” (“FBA”)
`program.25 As a practical matter, paying for FBA “is functionally the only way for sellers to get
`
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`18 Cour d’appel [CA] [regional court of appeal] Paris, 7, Oct. 6, 2022, 20/08582 (“Court of
`Appeals Paris Decision”) ¶¶ 286, 294.
`19 Id. at 600.
`20 House Report at 255.
`21 House Report at 249.
`22 Jillian Hufford, Amazon Statistics: Need To Know Numbers about Amazon [Infographic],
`NCHANNEL Blog (Feb. 20, 2020), https://www.nchannel.com/blog/amazon-statistics/ (last
`visited Nov. 8, 2022).
`23 House Report at 256.
`24 Pricing: Let’s Talk Numbers, AMAZON.COM, https://sell.amazon.com/pricing.html (last
`visited Nov. 8, 2022).
`25 House Report at 287.
`CLASS ACTION COMPLAINT - 10
`Case No.
`011121-11/2070390 V1
`
`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 14 of 45
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`a Prime badge for their product listings.”26 Prime eligibility is critical because there are more
`than 150 million enrollees in the Prime Program in the United States.27
`32.
`Prime is a paid membership program under which enrollees receive free shipping
`on Prime products, and other platform benefits. A loss leader for Amazon,28 Amazon uses Prime
`to lock consumers into the platform. Having paid Prime enrollment fees out-of-pocket ($14.99
`per month or $139 per year), consumers are incentivized to make further purchases on the
`platform to recoup this otherwise sunk cost. Research shows that Prime members are 96% more
`likely to buy from Amazon’s marketplace than any other online retail site.29
`33.
`In addition to operating the world’s largest online marketplace, Amazon is itself
`the dominant retailer on that marketplace. That is, Amazon has its own inventory of products—
`both Amazon-branded products and products it procures from other vendors—and Amazon sells
`those products on its own platform. Amazon has reported that approximately 40% of all sales on
`its platform are Amazon sales, i.e., products for which Amazon (and not any third-party) is the
`merchant and retailer.30 These two sales channels—third-party merchant and Amazon-retailed—
`can be depicted as follows:31
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`26 House Report at 287.
`27 See https://www.statista.com/statistics/504687/number-of-amazon-prime-subscription-
`households-usa/ (last visited Nov. 8, 2022).
`28 Analysts estimate that free shipping for Prime users costs Amazon $1 billion every year.
`Nanette Byrnes, How Amazon Loses on Prime and Still Wins, MIT TECH. REV. (July 12,
`2016), https://www.technologyreview.com/2016/07/12/158869/how-amazon-loses-on-prime-
`and-still-wins/ (last visited Nov. 8, 2022).
`29 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=74a1287f4af1 (last visited Nov. 8,
`2022).
`30 See Jeff Bezos Shareholder Letter (March 5, 2021) at 1, available at:
`https://s2.q4cdn.com/299287126/files/doc_financials/2021/ar/Amazon-2020-Shareholder-Letter-
`and-1997-Shareholder-Letter.pdf (last visited Nov. 8, 2022).
`31 Leanna Zeibak, How to Win the Amazon Buy Box in 2021, Tinuitu (March 25, 2021),
`https://tinuiti.com/blog/amazon/win-amazon-buy-box/ (last visited Nov. 8, 2022).
`CLASS ACTION COMPLAINT - 11
`Case No.
`011121-11/2070390 V1
`
`1301 SECOND AVENUE, SUITE 2000 • SEATTLE, WA 98101
`(206) 623-7292 • FAX (206) 623-0594
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`Case 2:22-cv-01599 Document 1 Filed 11/09/22 Page 15 of 45
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`34. Whether a consumer purchases a product offered by a third-party merchant or
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`Amazon generally depends on which seller is featured in the “buy box” for the product. Multiple
`sellers, including third parties and Amazon, can offer the same product on Amazon’s
`marketplace. When a consumer selects a product on Amazon, a listing page for that product
`appears with a white box on the right-hand side con