Zulily has lodged an antitrust complaint charging that Amazon specifically targeted Zulily as part of an overarching scheme to eliminate price competition among all online retailers. The complaint follows charges by the Federal Trade Commission and eighteen state attorneys general that Amazon has illegally suppressed retail price competition for years through an "anti-discounting" conspiracy that prohibits Amazon's sellers from offering better retail prices off Amazon.
According to the complaint, Zulily is an online retailer dedicated to offering consumers low prices for clothing, infant care, home decor and more. Zulily fell victim to Amazon's anti-discounting campaign because Amazon could not tolerate Zulily's "Best Price Promise" to shoppers, i.e., that Zulily's online retail prices for various products would be the lowest. Rather than compete against Zulily on the merits, Amazon prohibited its sellers from offering better prices on Zulily and engaged in minute-by-minute price wars against Zulily with the anticompetitive purpose of eliminating it from the market. The conduct forced sellers to raise their prices on Zulily, pull products form Zulily or abandon Zulily altogether—all in an effort to appease Amazon, a necessarily evil given Amazon's power over the most lucrative consumers online.
The result was what Amazon intended: Zulily could not gain the scale necessary to compete and consumers nationwide paid supracompetitive prices both on and off Amazon.
Zulily filed its complaint in the District Court for the Western District of Washington. It alleges antitrust violations under the Sherman Act and Washington state antitrust and consumer protection statutes, including that Amazon organized a hub-and-spoke conspiracy with the objective of eliminating horizontal price competition—a per se violation of the Sherman Act.
Zulily is represented by Bona Law partners Jon Cieslak, Molly Donovan and James Lerner and Mark Rosencrantz of Carney Badley Spellman in Seattle.
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