June 24, 2021

Volume XI, Number 175

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Amazon to Arbitrate Price Gouging Class Action, Leaving Open Questions of Platform Liability

Class actions plaintiffs and state enforcers have tried to use state price gouging laws to hold online retailers accountable for prices set by third parties.  It remains unclear, however, whether platforms will—or can, under the current legal frameworks—be held liable for price increases made by third party vendors.  One of the key cases that could shed some light on this issue, discussed last summer, has been put on hold, pending the completion of arbitration.

A class action was filed in the Northern District of California against Amazon on April 21, 2020.  Plaintiffs allege that they purchased items on Amazon that month at prices that were higher than before the pandemic.  They claim that the higher prices reflected unlawful price gouging by Amazon, since they exceeded the 10 percent threshold for price increases allowed under the California price gouging law, without justifications for cost increases.  Additionally, the complaint alleges that price increases on the site occurred for both products sold by third parties and products supplied directly by Amazon.

On June 22, 2020, Amazon moved the Court to compel arbitration, arguing, among other things, that plaintiffs agreed to its conditions of use (“COUs”) when they registered their accounts.  The COUs contain an arbitration provision, which includes the requirement that “[a]ny dispute or claim relating in any way to your use of any Amazon Service, or to any products or services sold or distributed by Amazon or through Amazon.com will be resolved by binding arbitration, rather than in court[.]”

On May 7, 2021, the court granted Amazon’s motion to compel arbitration, staying litigation in the meantime. The order notes that, “Courts have repeatedly held that Amazon’s layout of its checkout page provides constructive notice to its users of the COUs,” and, understandably, does not engage with any of plaintiffs’ price gouging arguments.  This live issue remains one to watch, given the lack of clarity for platforms and the possibility that they could be held responsible for third party pricing as well as their own product pricing, regardless of their internal policies or compliance actions.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 134
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About this Author

Christopher Ondeck Antitrust Litigator chair of  Proskauer Rose nationwide Antitrust Group
Partner

Chris Ondeck is a partner in the Litigation Department and vice-chair of the Antitrust Group. He focuses his practice on representing clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, defense, medical devices, metals,...

202-416-5865
John Ingrassia, Antitrust Attorney, Telecommunications, Proskauer Law firm
Special Counsel

John Ingrassia is a special counsel and advises clients on a wide range of antitrust matters in various industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services, health care, and others. His practice includes a significant focus on the analysis of Hart-Scott-Rodino pre-merger notification requirements, the coordination and submission of Hart-Scott-Rodino filings, and the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures. John has extensive experience with the legal, practical,...

202.416.6869
Kelly Landers Hawthorne, Proskauer Law Firm, New York, Litigation Attorney
Associate

Kelly Landers Hawthorne is an attorney in the Litigation Department.

Education

  • Columbia Law School, J.D., 2017

  • George Mason University, M.Ed., 2013

  • University of Richmond, B.A., 2011

212-969-3537
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