Does Dismissal of Amazon Class Action Lawsuit Spell Trouble for FTC’s Antitrust Case?

The Federal Trade Commission has been dealt another blow in its ongoing antitrust case against Amazon. In October 2024, parts of the FTC’s case were dismissed by U.S. District Judge John Chun. (The parts of the case that were not dismissed are moving forward to trial, which is scheduled for October 2026.) Now, the same judge has dismissed a separate shareholder lawsuit that was first filed in 2022 — and in fact prompted the FTC’s antitrust investigation and eventual lawsuit.  

On March 17, Judge Chun dismissed the class action lawsuit, which accused Amazon of defrauding its shareholders with pricing practices that favored private label products over those of third-party sellers and by covering up an overexpansion of warehouse capacity that incurred $2 billion of costs in 2022, leading to the company’s first quarterly loss since 2015, report Reuters.

Judge Chun dismissed the lawsuit with prejudice, meaning the same charges can never be brought against Amazon again. Chun said that he found no “compelling and particularized facts” to suggest that executives engaged in a cover-up with regards to the favoring of private label products or expansions in fulfillment capacity.

“The more plausible inference is that Amazon and the individual defendants employed sharp business practices and were single-mindedly focused on increasing corporate profits,” Chun wrote in his judgement.

FTC in Disarray

Alleged anticompetitive pricing practices also are a central component of the FTC’s lawsuit against Amazon, namely that the company employs multiple tactics to keep third-party sellers from lowering prices and favors it owns private label products, ultimately squashing competition and thereby raising prices for consumers.

The class action dismissal comes at a moment of upheaval at the FTC. Last week FTC attorney Jonathan Cohen asked Judge Chun to delay a separate Amazon trial related to the company’s membership practices that was set to begin Sept. 22, citing staffing and budget constraints. Just hours later, Cohen reversed course, saying he was wrong and that “the commission does not have resource constraints, and we are fully prepared to litigate this case.”

Then on March 18, President Trump fired the two Democratic members of the five-person commission, Rebecca Kelly Slaughter and Alvaro Bedoya, a move that they say was illegal. The commissioners have promised to sue. Reports also have surfaced that the FTC has removed all business guidance blogs posted during President Biden’s term, including information related to consumer protections around AI and privacy, according to Wired.