Amazon's Most Favored Nations Policies Scrutinized Under Sherman Act

Antitrust claims in a class action case filed against Amazon in U.S. Federal District Court will largely proceed, after the Court allowed most of the consumers' pricing claims to survive a motion for summary judgment. The Court dismissed a Sherman Act claim, but allowed most other claims to proceed. Of particular note, Amazon's "most favored nation" (MFN) policy will continue to be under scrutiny, despite the fact that courts typically do not find MFNs to be anticompetitive. It is widely recognized that MFNs, in fact, often serve procompetitive purposes.

Amazon sells directly to consumers, but also allows third-party merchants to sell products through Amazon. Many of those merchants also sell the same products on other platforms. Amazon commonly negotiates MFN provisions in its agreements with its larger third-party sellers. The MFN protections are meant to ensure that Amazon's sellers do not undercut Amazon's own prices when they are selling elsewhere.