On August 22, 2024, the D.C. Court of Appeals revived a case filed by District of Columbia Attorney General Karl Racine in 2021 and initially dismissed by the D.C. Superior Court Judge Hiram Puig-Lugo, accusing Amazon of anti-competitive practices, specifically targeting its “Fair Pricing Policy” and minimum margin agreements. Amazon has rightfully denied these claims, pointing out that the D.C. AG’s narrow focus on online-only marketplaces ignores the larger competitive landscape where Amazon competes daily across online and offline channels.

Online and Physical Marketplaces Are Not So Different—Consumers Want Both

The AG’s argument that online and physical marketplaces are not substitutes misses a key point: many consumers now prefer an integrated, omnichannel shopping experience across both channels. For example:

— 81% of consumers hold two or more memberships across different retailers.

— 83% of Walmart+ members also subscribe to Amazon Prime.

— 84% of Amazon Prime members hold paid memberships with brick-and-mortar superstores.

University of Pennsylvania Law Professor Jonathan Klick explains, “[R]elegating Amazon’s market to e-commerce rather than retail more generally might be a little like treating Sonic as controlling the market for hamburgers delivered to your car… There is little reason to carve out e-commerce from retail generally. In fact, data from a 2018 survey suggests that most consumers still prefer shopping offline.“

The District’s “Barriers to Entry” Claim Overstates Amazon’s Market Position

The complaint also alleges Amazon is protected by “barriers to entry,” arguing that Amazon’s longstanding incumbency discourages competition from newer players. Yet data from experts paints a different picture:

— E-commerce researcher Stephanie Chevalier notes that while Amazon leads with 2.2 billion monthly visits, other platforms also attract significant traffic, with Etsy alone getting around 446 million visits per month.

— While Amazon has the highest U.S. gross merchandise value (GMV), Walmart holds a considerable share with a GMV of around $134 billion.

According to Wall Street Journal’s Dan Gallagher, “Competition is also growing of late instead of diminishing. Walmart’s U.S. e-commerce revenue has averaged 39% annual growth over the last four years and is expected to hit nearly $62 billion in the fiscal year ending January, according to consensus estimates from Visible Alpha.”

As NYT columnist Farhad Manjoo observed, Amazon “invented the notion of an online store that sells everything…[yet] its presence isn’t necessarily overwhelming, let alone clearly illegally monopolistic.” Even with its pioneering role, Amazon competes within a diverse and thriving retail marketplace.

Consumers and Small Businesses Push Back on Anti-Competitive Claims

D.C. also argues that Amazon “suppress[es] price competition” to the detriment of consumers and small businesses, despite the overwhelming evidence disputing otherwise. 

— According to Patrice Onuwuka of the Independent Women’s Forum, “Amazon Prime is a popular and beloved service that is enjoyed by many…. A whopping 84.6% of users polled pointed to the free and fast delivery as the platform’s best feature.”

— Amazon’s platform supports thousands of small and medium-sized sellers, offering essential access to consumers, affordable prices, and quick delivery—benefits that keep customers returning. In fact, over 60 percent of the sales in Amazon’s store come from independent sellers, aligning their success with Amazon’s success.

— Fulfillment by Amazon (FBA) provides small businesses with a logistics solution that’s on average “30% cheaper than other third-party providers,” allowing sellers to save on shipping and focus more on product quality. These savings are especially helpful for sellers in rural areas, where sales on Amazon’s platform increased by over 60% year-over-year in 2023.

Morgan Reed, President of the App Association, sums it up: “The smallest companies, including our members, benefit the most from today’s digital marketplaces. By taking advantage of bundled services offered through online marketplaces, such as reduced overhead costs, immediate global distribution, and most importantly, a fast track to consumer trust, our members can compete in a global marketplace.”

The Bottom Line: Amazon operates in a fiercely competitive space where consumers and small businesses thrive—not suffer. The D.C. case’s narrow lens overlooks the real landscape of today’s retail, where omnichannel experiences drive consumer behavior and choices.

Read more on why competition in e-commerce is flourishing, not faltering, here and here.