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DISTRICT OF COLUMBIA COURT OF APPEALS

No. 22-CV-0657

ISTRICT OF COLUMBIA, APPELLANT,

MAZON.COM, INC., APPELLEE.

Appeal from the Superior Court

of the District of Columbia

(2021-CA-001775-B)

(Hon. Hiram E. Puig-Lugo, Motions Judge)

(Argued December 7, 2023 Decided August 22, 2024)

Caroline S. Van Zile, Solicitor General, with whom Brian L. Schwalb,

Attorney General, Graham E. Phillips, Deputy Solicitor General, and Jeremy R.

Girton, Assistant Attorney General, were on the brief for appellant.

Kannon K. Shanmugam, with whom Karen L. Dunn, William A. Isaacson,

Paul D. Brachman, Amy J. Mauser, and Martha L. Goodman, Paul, Weiss, Rifkind,

Wharton & Garrison LLP were on the brief, for appellee.

Eric F. Citron filed a brief for Antitrust Law Professors and Economists as

amici curiae in support of appellant.

Victoria Sims filed a brief for the Committee to Support the Antitrust Laws as

amicus curiae in support of appellant.

Sandeep Vaheesan filed a brief for Open Markets Institute as amicus curiae

in support of appellant.

Tyler S. Badgley, Jonathan D. Urick, Adam G. Unikowsky, and Mary E.

Marshall filed a brief for the Chamber of Commerce of the United States of America

and the D.C. Chamber of Commerce as amici curiae in support of appellee.

David L. Meyer filed a brief for Federal City Council as amicus curiae in

support of appellee.

Before B

ECKWITH and DEAHL, Associate Judges, and FISHER, Senior Judge.

ECKWITH, Associate Judge: The District of Columbia sued Amazon.com

alleging that certain Amazon policies amounted to illegal restraints of trade under

the District’s antitrust laws. Claiming that these practices stifled competition,

reduced consumer choice, and led to increased prices across online marketplaces,

the District sought to enjoin Amazon from using them.

Defending its policies as prohibitions against discrimination and price

gouging that actually foster competition, Amazon moved to dismiss the District’s

first amended complaint. The trial court granted Amazon’s motion, concluding that

the District failed to plausibly allege that the challenged policies had anticompetitive

effects. On appeal, the District challenges the trial court’s order on grounds that the

court misconstrued the elements of a restraint-of-trade claim and failed to accept the

District’s factual allegations as true. We hold that the District alleged sufficient facts

to survive the motion to dismiss and therefore reverse the judgment of the Superior

Court.

Amazon.com operates the world’s largest online retail marketplace.

According to the District’s first amended complaint, Amazon is consumers’ go-to

platform for online shopping, where two thirds of people begin their search for new

products and where nearly three quarters “go directly” once they have settled upon

a specific product to buy. In addition to selling things directly to consumers on its

online platform, Amazon contracts with third-party merchants seeking to sell their

products on Amazon and also buys products from wholesale suppliers—known as

first-party sellers—that it then sells to consumers, sometimes under its own brand.

In many cases, these third-party sellers and first-party sellers offer the same products

on other online platforms, including on their own websites.

The District’s complaint takes aim at three aspects of the agreements Amazon

requires certain merchants to enter into that the District says run afoul of D.C. law

prohibiting restrictive trade policies and monopolies. See D.C. Code § 28-4502

(stating that “[e]very contract . . . in restraint of trade or commerce” is illegal);

§ 28-4503 (making it unlawful to monopolize or attempt to monopolize trade or

commerce in the District). The first two—which the District regards as “most-

favored-nation” agreements

—involve the third-party sellers. The “price parity

provision,” which was in effect until 2019, required these sellers to agree to contract

terms that prohibited them from offering their products through other online

marketplaces, including their own websites, at a lower price than that offered on

Amazon. According to the complaint, this provision “artificially raised the price of

goods to consumers across online marketplaces” because third-party sellers “were

forced to incorporate Amazon’s high fees and commissions into their product prices

not only when selling through Amazon’s marketplace, but also when selling through

competing online marketplaces.”

In response to scrutiny from Congress and government regulators, Amazon

Neither party specifically defines a most-favored-nation agreement, though

Amazon, in arguing that the label is applied incorrectly here, provides an example:

“A most-favored-nation provision with a supplier would mean that Amazon would

receive the supplier’s best price, a price at least equivalent to that offered to others.”

Br. of Appellee at 29-30 (citing Phillip E. Areeda & Herbert Hovenkamp, Antitrust

Law: An Analysis of Antitrust Principles and Their Application ¶ 1807b1 (4th & 5th

eds., 2021 Cumulative Supp.)). In the context of this case, the District describes

most-favored-nation agreements as those in which sellers agree that the price of any

product they sell on Amazon will be “the lowest price available for that product on

any online platform, even if other platforms charge lower fees.”

removed the price parity provision from its U.S. contracts in 2019 and replaced it

with the so-called “fair pricing policy.” Under the fair pricing policy—characterized

in the complaint as “an effectively identical substitute” for the price parity

provision—Amazon will sanction third-party sellers who “harm[] consumer trust”

by setting a price on a product or service on Amazon “that is significantly higher

than recent prices offered on or off Amazon.”

Both policies ultimately harm these

sellers, consumer choice, and competition, the District’s complaint alleges, by

causing higher commissions and fees to third-party sellers and lower profits than

would occur in a competitive market.

The third practice targeted by the District’s complaint is Amazon’s use of

“minimum margin agreements” that require first-party sellers to guarantee Amazon

an agreed-upon minimum profit for the products Amazon purchases wholesale and

sells retail on Amazon’s online marketplace. If, for example, Amazon identifies a

lower price for a product on a competing online marketplace, it will lower its price

The sanctions in question are that Amazon will “remove the Buy Box”—

referring to the seller’s eligibility to place the featured offer on any product page,

“remove the offer, suspend the ship option, or, in serious or repeated cases, suspend[]

or terminate[] selling privileges.” The fair pricing policy states that Amazon

“regularly monitors” the prices of items and shipping on the platform “and compares

them with other prices available to our customers” to identify any prices that “harm[]

customer trust.”

to match, and the first-party seller must pay Amazon for any corresponding loss in

profit margin.

The District’s original complaint against Amazon challenged the former price

parity provision and the fair pricing policy as violations of the District’s antitrust

laws. Amazon moved to dismiss, and in response, the District filed the operative

amended complaint alleging four violations of the D.C. Antitrust Act: First, the

District asserts, Amazon’s price parity provision and fair pricing policy restrain trade

in violation of D.C. Code § 28-4502 by establishing Amazon’s price as the price

floor across online marketplaces. Second, Amazon’s minimum margin agreements

also violate section 28-4502 by incentivizing first-party sellers to increase their

prices on other online marketplaces to avoid owing any loss of profit margin to

Amazon—what the District calls “true up” payments. Third, Amazon’s

anticompetitive conduct constitutes maintenance of an unlawful monopoly as

prohibited by D.C. Code § 28-4503. And fourth, to the extent Amazon has not

already established a monopoly, “Amazon’s anticompetitive conduct constitutes an

attempt to achieve a monopoly in violation of D.C. Code § 28-4503.” For relief, the

District seeks a declaratory judgment and an injunction against Amazon’s

anticompetitive acts as well as civil penalties and damages.

Amazon again moved to dismiss under Super. Ct. Civ. R. 12(b)(6) for failure

to state a claim, arguing, among other things, that the District failed to allege any

“plausible relevant product market in which competition was harmed” and failed to

show that the challenged policies had anticompetitive effects. The trial court orally

granted Amazon’s motion. Relying on the pleading standard set forth in Ashcroft v.

Iqbal, 556 U.S. 662 (2009), and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007),

the court evaluated the terms of the fair pricing policy, concluding that “sellers are

free to set prices” and that “the only limit” in the policy is that sellers “cannot set a

price that is significantly higher than recent prices offered on or off Amazon.” The

court did not agree with the District that prohibiting sellers from raising their prices

on Amazon created an implicit limit on sellers’ ability to offer lower prices on other

online marketplaces. The court stated that nothing in the fair pricing policy

expressly created a floor on prices and that neither the word “floor” nor the word

“lower” appeared anywhere in the policy. As for the District’s allegations that

Amazon’s practices lead to higher prices, the court dismissed them as “conclusory.”

The court did not address the District’s monopolization and attempted

monopolization claims or its allegations regarding the price parity provision or the

minimum margin agreements. It subsequently denied a motion for reconsideration

and the District’s alternative request to file a second amended complaint.

II.

On appeal, the District levels several challenges against the trial court’s ruling

granting Amazon’s motion to dismiss. We review a trial court’s dismissal of a

complaint de novo. Bell v. First Invs. Servicing Corp., 256 A.3d 246, 251 (D.C.

2021). “We accept the allegations of the complaint as true, and construe all facts

and inferences in favor of the plaintiff.” Grayson v. AT&T Corp., 15 A.3d 219, 228

(D.C. 2011) (en banc) (quoting Solers, Inc. v. John Doe, 977 A.2d 941, 947 (D.C.

2009)) (internal brackets omitted).

To survive a Rule 12(b)(6) motion to dismiss, a complaint must “plead

In this order, the trial court addressed and rejected the District’s claim that

Amazon’s minimum margin agreements restrain trade in violation of D.C. Code

§ 28-4502 after stating that it found no mention in the complaint of the name of any

third-party seller or wholesale supplier, the name of any item for sale, the price point

for any item, or “any language of warning” from Amazon to a third-party seller or

first-party seller. With regard to the District’s claims involving illegal maintenance

of a monopoly and attempted monopolization in violation of D.C. Code § 28-4503,

the court concluded that “merely controlling a dominant share of the market does

not satisfy pleading requirements for antitrust actions, particularly in pandemic times

when online delivery sales have increased.” It further found that the fact that “sellers

are free to migrate to other platforms as market dynamics continue to unfold”

undercut the District’s characterization of Amazon’s monopoly power. Because the

court found that the District’s complaint contained “conclusory statements devoid

of factual information to support its claims of anticompetitive conduct and harm,” it

denied the District’s request to reconsider the dismissal of these counts.

‘enough facts to state a claim to relief that is plausible on its face,’” Poola v. Howard

Univ., 147 A.3d 267, 276 (D.C. 2016) (quoting Twombly, 550 U.S. at 570), meaning

“factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Id. (quoting Comer v. Wells Fargo

Bank, N.A., 108 A.3d 364, 371 (D.C. 2015)). While “this standard ‘does not require

detailed factual allegations,’ it does ‘demand[] more than an unadorned, the-

defendant-unlawfully-harmed me accusation.’” Id. (quoting Iqbal, 556 U.S. at 678).

If the complaint contains sufficient factual allegations, “the case must not be

dismissed even if the court doubts the plaintiff will ultimately prevail.” Id. (quoting

Doe v. Bernabei & Watchel, PLLC, 116 A.3d 1262, 1266 (D.C. 2015)).

III.

This case involves the sufficiency of claims brought under the D.C. Antitrust

Act. The D.C. Council passed the Antitrust Act in 1980 “to promote the unhampered

freedom of commerce and industry” by “prohibiting restraints of trade and

monopolistic practices.” D.C. Code § 28-4501(b). The two provisions of the D.C.

Antitrust Act at issue here, D.C. Code § 28-4502 and § 28-4503, mirror sections 1

and 2 of the federal Sherman Antitrust Act, 15 U.S.C § 1 and 15 U.S.C. § 2. In

language that is opportune given the dearth of antitrust decisions in this court, the

D.C. statute itself—in a provision labeled “Uniformity”—explicitly gives us the

green light to rely upon federal courts’ interpretations of the Sherman Act when

interpreting the D.C. Antitrust Act. See D.C. Code § 28-4515 (“It is the intent of the

Council of the District of Columbia that in construing this chapter, a court of

competent jurisdiction may use as a guide interpretations given by federal courts to

comparable antitrust statutes.”).

A. Restraint of Trade Under D.C. Code § 28-4502

We turn first to the District’s contention that it stated plausible violations of

D.C. Code § 28-4502, the provision in the Antitrust Act prohibiting restraint of trade.

To establish a claim under this section, the District must show that there is a

“concerted action” that “unreasonably restrains trade.” Am. Needle, Inc. v. Nat’l

Football League, 560 U.S. 183, 186 (2010). In this case, Amazon does not

meaningfully dispute that the challenged contracts—the price parity provision, the

fair pricing policy, and the minimum margin agreements—are express written

agreements that satisfy the requirement of concerted action under section 28-4502.

Amazon has at times during this litigation suggested that the District has to

show more than an express written agreement to plausibly allege “concerted action”

in this case. It states in its brief, for example, that the District “utterly failed to allege

any facts demonstrating that the written policy reveals a ‘conscious commitment’ to

‘an unlawful objective.’” Br. of Appellee at 26 (citing Monsanto Co. v. Spray-Rite

Serv. Corp., 465 U.S. 752, 764 (1984)); see also id. at 27 n.7. This argument is

undeveloped, and by the time of oral argument Amazon was wholly focused on the

plausibility of the District’s allegations of anticompetitive effect, not its allegations

We therefore focus our analysis upon the adequacy of the District’s allegations that

these agreements amounted to unreasonable restraints on trade.

Whether the agreements are unreasonable can be shown in one of two ways—

the per se rule or the rule of reason. Ohio v. Am. Express, 585 U.S. 529, 541 (2018).

Under the per se standard, certain agreements are per se illegal because they “always

or almost always tend to restrict competition and decrease output.” Id. (quoting Bus.

Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 723 (1988)). The rule of reason,

on the other hand, requires “a fact-specific assessment of market power and market

of concerted action. In any event, the Supreme Court has said more recently that

stating a claim under section 1 of the Sherman Act (and thus under D.C. Code

§ 28-4502) “requires a complaint with enough factual matter (taken as true) to

suggest that an agreement was made.” Twombly, 550 U.S. at 556. And as Monsanto

itself notes, the “conscious commitment” standard is satisfied by “evidence”—

including circumstantial evidence—“that tends to exclude the possibility of

independent action.” Monsanto, 465 U.S. at 768. There is clear evidence of that

here by way of the written agreements, and indeed, courts have held that

circumstantial evidence suggesting an agreement is “superfluous in light of the direct

evidence in . . . the agreement itself.” Robertson v. Sea Pines Real Est. Cos., 679

F.3d 278, 289-90 (4th Cir. 2012); see also De Coster v. Amazon.com, Inc., No. C21-

693RSM, 2023 WL 372377, at *4 (W.D. Wash. Jan. 24, 2023) (concluding, in a

class action lawsuit challenging Amazon’s price parity provision and fair pricing

policy under the Sherman Act, that the plaintiffs plausibly alleged concerted action

where “the third-party merchants are active participants who set their prices and

otherwise engage with Amazon’s policies in an active, albeit allegedly unwilling,

way”). Even if the District is required to allege that Amazon intended the

unlawfulness of its scheme, at this stage of the proceedings the circumstances

described in the complaint plausibly suggest that Amazon intends to restrain trade

in the specific manner alleged.

structure . . . to assess the restraint’s actual effect on competition.” Id. (internal

quotation marks and brackets omitted). Although the District contends that aspects

of Amazon’s conduct satisfy each standard, we need only consider whether the

complaint stated a plausible antitrust claim under either theory, and if it did, then

leave to “later stages in the litigation” the determination which theory will apply to

the challenged agreements. PLS.Com, LLC v. Nat’l Ass’n of Realtors, 32 F.4th 824,

837 (9th Cir. 2022); see, e.g., Robertson v. Sea Pines Real Est. Cos., 679 F.3d 278,

292 (4th Cir. 2012) (because application of the rule of reason is fact-intensive, it is

“best conducted with the benefit of discovery” rather than at a motion to dismiss

stage.); PBTM LLC v. Football Nw, LLC, 511 F.Supp.3d 1158, 1178 (W.D. Wash.

2021) (“courts typically need not decide which standard to apply at the pleading

stage”).

To state a claim under the rule of reason, the District must point either to direct

or indirect evidence to allege “that the challenged restraint has a substantial

anticompetitive effect that harms consumers.” Am. Express, 585 U.S. at 541. A

party relying on direct evidence must allege “‘actual detrimental effects [on

competition]’ such as reduced outputs, increased prices, or decreased quality in the

relevant market.” Id. at 542 (quoting FTC v. Indiana Federation of Dentists, 476

U.S. 447, 460 (1986)). While the District alleges that within the online marketplace,

Amazon’s implementation and enforcement of its policies lead to increased prices,

stifled innovation, and reduced consumer choice—all allegations of direct evidence

of anticompetitive effects, see Am. Express, 585 U.S. at 541—we turn to the

District’s indirect evidence. To plead a claim under the rule of reason using indirect

evidence a plaintiff must plausibly allege both that (1) the defendant has market

power and (2) that the restraint harms competition. Id. at 542.

Market Power

We have little difficulty concluding that the District’s first amended complaint

adequately alleges that Amazon exerts substantial market power in the online retail

marketplace. According to the complaint, Amazon accounts for between fifty and

seventy percent of all online purchases in the United States, where the second and

third largest competitors, Walmart.com and eBay, “have online marketplace shares

in the single digits.” Amazon also generates revenue through direct retail sales—

competing directly against online multi-seller marketplaces as well as with more

than half of the third-party sellers on Amazon by offering various products under its

own brand name, including mattresses, light bulbs, cookware, computer accessories,

luggage, exercise equipment, and motor oil. Amazon hosts millions of third-party

sellers on its platform, while Walmart.com and eBay host only a fraction of that

many sellers, despite charging lower fees and commissions. Even though

“Walmart.com charges no setup, subscription, or listing fees, only a referral fee on

each sale” and has significantly lower fulfillment and delivery fees, and even though

eBay “generally offers at least fifty free product listings before charging its $0.35

product listing fees, and generally sets its commissions well below Amazon’s,”

Amazon “has seen little seller attrition”—something the complaint flags as “further

evidence of its market power.”

We are not persuaded by Amazon’s contention that the District’s way of

defining the market—as “online retail marketplaces”—is facially implausible

because it excludes brick-and-mortar retail stores where consumers can buy similar

or identical products. In Amazon’s view, the alleged market must include all

products “reasonably interchangeable by consumers for the same purposes.” United

States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956). Amazon raised

a similar argument in a federal antitrust suit with many similarities to the present

case, and the federal court rejected it. In Frame-Wilson v. Amazon.com, Inc., 591 F.

Supp.3d 975, 988-92 (W.D. Wash. 2022), consumers brought a putative class action

against Amazon for violating sections 1 and 2 of the Sherman Act and identified

“the market at issue as the U.S. retail ecommerce market.” There, the court found

that the plaintiffs “alleged sufficient facts to support a distinction between the

ecommerce retail market and the physical retail market, even though the same

products may be available in both.” Id.; see also Brown Shoe Co. v. United States,

370 U.S. 294, 325 (1962) (stating that within a “broad market, well defined

submarkets may exist which, in themselves, constitute product markets for antitrust

purposes.”). Other courts are aligned with that view, and we agree. See, e.g., F.T.C.

v. Whole Foods Mkt., Inc., 548 F.3d 1028, 1040 (D.C. Cir. 2008) (stating that the

fact that a customer might cross shop in different markets does not mean there is no

definable market); Distance Learning Co. v. Maynard, No. 19-cv-03801, 2020 WL

2995529, at *7 (N.D. Cal. June 4, 2020) (noting the distinction between the market

for online traffic schools and brick-and-mortar schools).

The District’s first amended complaint offers a plausible basis for its

contention that Amazon possesses market power in online product submarkets and

in the broader online marketplace.

Restraint on Competition

Amazon’s primary contention in this appeal is that the District’s complaint is

deficient in alleging any anticompetitive effects from the agreements. It

characterizes the challenged agreements as prohibitions against discrimination and

price gouging that reflect Amazon’s efforts to bargain for lower prices from its

suppliers so it can offer lower prices to consumers on its online store. The District’s

contrary allegations, it says, are purely speculative.

The District counters, as to the fair pricing policy in particular, that regardless

of the agreement’s outward focus on preventing “significantly higher prices” on

Amazon, it is still implicit in the agreement that a seller cannot offer their product

for less elsewhere because doing so would render the price on Amazon higher than

the competitor’s price.

And in any event, the District argues, courts must look past the bare terms of

the agreement to the effects of the agreement in the real world. Specifically, the

District points to allegations in its complaint that third-party sellers regularly

increase their prices to avoid Amazon’s sanctions and that Walmart “routinely fields

requests” from third-party sellers to raise prices on its online platform because those

sellers “worry that a lower price on Walmart’s online marketplace will jeopardize

their status on Amazon’s marketplace.” According to the District’s complaint, that

concern is not unfounded, as Amazon aggressively enforces the fair pricing policy

through “an extensive network of electronic surveillance” and “employees to

monitor the prices of products” on other online platforms. And third-party sellers—

most of whom “believe that to successfully sell online, it is imperative that they have

a presence on Amazon’s online marketplace”—have every incentive to avoid

Amazon’s sanctions.

The District alleges that Amazon’s fees

can be as high as forty percent of a

According to the District’s complaint, Amazon’s basic fee, its “referral fee,”

is fifteen percent on most products but it can be higher on some products, such as

product’s total retail price and that the fair pricing policy drives sellers to effectively

incorporate those same fees into its prices even when another platform charges

considerably lower fees. By way of example, consider a seller of widgets who can

turn a profit by selling a widget for $60. If Amazon’s commissions and fees are

forty percent of whatever price the seller lists those widgets at, then the merchant

will need to list that widget on Amazon for $100 to incorporate the forty percent in

fees and commissions in order to still recover the $60 necessary to make a profit.

The merchant theoretically could sell its widgets at a steep discount on its own

website (for $60) or on another platform that charges only ten percent of the list price

in commissions and fees (for $67)—all while still turning a profit. But doing so

would run afoul of Amazon’s fair pricing policy, and as a result, the District alleges,

sellers instead incorporate Amazon’s high commissions and fees into the price of

their goods across all platforms, leaving consumers to pay artificially inflated prices

on competitor platforms.

These allegations draw a direct link between the agreements and their

clothing. Sellers can either fulfill their own orders or choose a “Fulfillment by

Amazon” (FBA) option. When a seller chooses to have its order fulfilled by

Amazon, Amazon charges the seller “additional fees to handle inventory, ship the

product to the consumer, collect payments, process returns, and credit the seller’s

account.” The District alleges that many sellers pay Amazon a forty percent sales

commission, which includes these FBA charges on top of additional fees.

anticompetitive effects, the District contends, and the trial court was required to

accept them for their truth. We are persuaded. In a case relying on far more

ambiguous evidence of an agreement than the written contracts at issue here, the

Supreme Court in Monsanto Co. v. Spray-Rite Serv. Corp. affirmed the jury’s

finding of a price-fixing scheme based on (1) testimony stating that the company

pressured two distributors to maintain a suggested retail price and (2) a newsletter

discussing the company’s efforts to “get the market place in order.” 465 U.S. 752,

765-66 (1984) (internal brackets omitted) (“It is reasonable to interpret this

newsletter as referring to an agreement or understanding that distributors and

retailers would maintain prices, and Monsanto would not undercut those prices on

the retail level and would terminate competitors who sold at prices below those of

complying distributors.”). Here, it is similarly reasonable to look past the express

terms of the fair pricing policy to glean its effects on competition. See id. And as

the District plausibly alleges, in practice, both the price parity provision and the fair

pricing policy force third-party sellers to incorporate Amazon’s high fees and

commissions by prohibiting third-party sellers from offering a higher price for their

products on Amazon than on any other online marketplace, thereby artificially

raising the price of goods for consumers.

As for the District’s allegations regarding the minimum margin agreements,

the court did not address this claim in its oral ruling, but in denying the District’s

motion for reconsideration the court concluded that the District’s complaint was

insufficient because it did not name specific third-party and first-party sellers. But

“Iqbal and Twombly do not require a plaintiff to prove his case in the complaint,”

Robertson, 679 F.3d at 291, and “[s]pecific facts are not necessary” to survive a

motion to dismiss, Erickson v. Pardus, 551 U.S. 89, 93 (2007). See also Starr v.

Sony BMG Music Ent., 592 F.3d 314, 325 (2d Cir. 2010) (“Plaintiffs [are] not

required to mention a specific time, place or person involved in each conspiracy

allegation”). The complaint “need only ‘give the defendant fair notice of what

The District also takes issue with the trial court’s reliance upon language in

the Supreme Court’s decision in Iqbal—specifically, a reference to “lawful,

unchoreographed free market behavior”—to support its conclusion that Amazon’s

agreements were not anticompetitive. The Court in Iqbal was describing the Court’s

concern in Twombly that certain parallel conduct that might be consistent with an

unlawful agreement “was not only compatible with, but was indeed more likely

explained by, lawful, unchoreographed free market behavior.” 556 U.S. at 680. As

the District points out, this concern is not relevant to the circumstances here, where

the District challenges Amazon’s express written contracts with first-party and third-

party sellers and the existence of an agreement is not in dispute. See Robertson, 679

F.3d at 290 (“Twombly’s requirements with respect to allegations of illegal parallel

conduct are inapplicable, where, as here,” the agreements are not in dispute.).

the . . . claim is and the grounds upon which it rests.’” Erickson, 551 U.S. at 93

(quoting Twombly, 550 U.S. at 555).

Here, the complaint alleges that Amazon’s minimum margin agreements

“reduce other online marketplaces’ ability to compete with Amazon by offering

lower prices to consumers” because first-party sellers “have an incentive to maintain

higher prices on other online marketplaces” to avoid triggering Amazon’s minimum

profit margin protection and owing potentially millions of dollars to Amazon in “true

up” payments. Thus in effect, Amazon’s minimum margin agreements force

suppliers to incorporate the minimum margin guarantee into the product price for

consumers, creating an inflated resale price and restricting competition. In Frame-

Wilson, the court analyzed similar allegations of anticompetitive conduct and found

that Amazon’s fair pricing policy and price parity provision plausibly “result in the

suppression of competition and increase of prices on external platforms.” 591 F.

Supp.3d at 991-92. Like in that case, here the District’s allegations of suppressed

competition and higher prices on other online platforms—which include the cost of

the product itself plus the cost of Amazon’s mandatory fees—are sufficient to

suggest that the agreements produce anticompetitive effects in the relevant markets.

Id.; see also W. Penn. Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 101 (3d

Cir. 2010) (holding that the complaint plausibly alleged that a “conspiracy resulted

in increased premiums and reduced output in the market for health insurance”).

By failing to accept the allegations in the complaint as true, the trial court set

too high a bar for the District’s complaint. The District adequately pled that

Amazon’s agreements imposed an unreasonable restraint of trade under the rule of

reason.

B. Monopolization Under D.C. Code § 28-4503

Lastly, the District argues that the trial court erred in dismissing its claims

alleging that Amazon’s anticompetitive conduct insulates its monopoly power or

threatens to create a monopoly over online marketplaces. See D.C. Code § 28-4503.

The elements of an illegal monopoly claim are “(1) the possession of monopoly

power in the relevant market and (2) the willful acquisition or maintenance of that

power” through anticompetitive means. United States v. Grinnell Corp., 384 U.S.

563, 570-71 (1966). A claim of attempted monopolization requires proof “(1) that

the defendant has engaged in predatory or anticompetitive conduct with (2) a

specific intent to monopolize and (3) a dangerous probability of achieving monopoly

power.” Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993). “Monopoly

power is the power to control prices or exclude competition.” Du Pont, 351 U.S. at

391. “The existence of monopoly power may be proven through direct evidence of

supracompetitive prices and restricted output.” Mylan Pharms. Inc. v. Warner

Chilcott Pub. Ltd., 838 F.3d 421, 434 (3d Cir. 2016) (quoting Broadcom Corp. v.

Qualcomm Inc., 501 F.3d 297, 307 (3d Cir. 2007)). More commonly, it can be

shown through indirect evidence of the firm’s dominant market share and barriers to

entry. Id. at 436; see Fed. Trade Comm’n v. Facebook, Inc., 581 F.Supp.3d 34, 43

(D.D.C. 2022).

Here, the District alleged both direct and indirect evidence. As for direct

evidence, the complaint alleged that “Amazon’s dominance among online

marketplaces” allows it to charge supracompetitive fees to its sellers, and despite

competitors like Walmart.com or eBay charging significantly lower fees, “Amazon

has seen little seller attrition” or corresponding loss of market share. The trial court

discounted these allegations, stating in its denial of reconsideration that “[i]f other

online marketplaces charge lower fees than [Amazon], including charging lower

commission, sellers may simply choose not to sell on [Amazon’s] marketplace.” But

accepting the District’s allegations as true—as is required on a motion to dismiss—

sellers have limited options other than Amazon if they want to reach the majority of

online consumers.

As for indirect evidence, the complaint states that Amazon is the platform for

online shopping where “[m]ost Americans overwhelmingly turn . . . as the first place

they buy anything online.” Citing statistics, the complaint alleges that “[s]ellers are

more likely to choose Amazon to gain access to the hundreds of millions of

customers to whom they can sell” and “[b]uyers are more likely to choose Amazon

than a competitor because it has amassed millions of sellers from whose products a

buyer can choose.” In total, the District alleged that Amazon controls at least fifty

to seventy percent of all online retail sales.

The trial court characterized this allegation as “an admission that thirty to fifty

percent of the market is beyond Amazon’s control.” But the District did not need to

show that Amazon controls the entire relevant market to plausibly allege that

Amazon has established a monopoly or is attempting to monopolize. Although there

is no magic number, it is well established that an entity can exert monopoly power

over market price with less than full market share. See Grinnell Corp., 384 U.S. at

571 (noting that control of eighty-seven percent of the market “leaves no doubt” that

defendant held monopoly power); Am. Tobacco Co. v. United States, 328 U.S. 781,

797 (1946) (stating that two-thirds of market was sufficient to constitute monopoly).

Viewed as a whole, the District’s allegations about Amazon’s market share

and maintenance of its market power through the challenged agreements plausibly

suggest that Amazon either already possesses monopoly power over online

marketplaces or is close to a “dangerous probability of achieving monopoly power.”

Spectrum, 506 U.S. at 447; see also id. at 455 (proving “dangerous probability of

actual monopolization” generally requires “a definition of the relevant market and

examination of market power”).

IV.

For the foregoing reasons, we hold that the District has alleged sufficient facts

to overcome Amazon’s motion to dismiss. We therefore reverse the trial court’s

dismissal of the District’s complaint and remand for further proceedings consistent

with this opinion. In light of our disposition, we need not address the District’s

contention that the trial court abused its discretion in denying its request to file a

second amended complaint.

So ordered.