Amazon (AMZN) has secured a partial dismissal of a lawsuit filed by the U.S. Federal Trade Commission (FTC), which accused the company of maintaining an illegal monopoly, according to a Reuters report. However, the exact details of the ruling made by the federal court were not immediately clear.
Amazon Asked the U.S. Judge to Dismiss the Case
The FTC’s lawsuit against Amazon accuses the company of employing anti-competitive tactics to dominate the online superstore and marketplace sectors. In response to these allegations, Amazon filed a motion to dismiss the case, with U.S. District Judge John Chun overseeing the proceedings. Amazon argued that the FTC had failed to provide any evidence demonstrating harm to consumers, undermining the foundation of the case.
Central to the FTC’s claims is an accusation that Amazon’s online superstore, which offers nearly 1 billion products, previously used an algorithm that increased prices for U.S. households by over $1 billion. However, Amazon countered this point by asserting in court that the pricing algorithm in question had been discontinued in 2019, long before the lawsuit was filed.
After reviewing both arguments, Judge Chun issued a sealed ruling that partially granted Amazon’s request. While some aspects of the case were dismissed, the FTC was allowed to proceed with any claims that were not permanently thrown out. Moreover, the judge ruled that the trial would be divided into two parts: one to address Amazon’s alleged violations and another to consider the proposed remedies, rejecting Amazon’s request to consolidate the proceedings into a single trial.
FTC Claims Amazon Is Hampering Competition
In its original complaint, the FTC claimed that Amazon is hampering competition by pushing sellers to use its advertising and fulfillment services. In response, Amazon has argued that its price-matching and Prime shipping services have benefited consumers and indicate its efforts to compete with thousands of online and brick-and-mortar retailers.
The partial dismissal of the lawsuit is a mixed outcome for Amazon, as it will now have to face the remaining allegations in court while still defending its competitive practices.
Is Amazon a Buy, Hold, or Sell?
Analysts remain bullish about AMZN stock, with a Strong Buy consensus rating based on 44 Buys and one Hold. Over the past year, AMZN has increased by more than 40%, and the average AMZN price target of $224.05 implies an upside potential of 20.2% from current levels.
