Washington, D.C., Attorney General Racine Sues Amazon

On May 25, 2021, Washington, D.C., Attorney General Karl Racine sued Amazon in the Superior Court of the District of Columbia for alleged antitrust violations under Washington, D.C., law. The complaint seeks injunctive relief, civil penalties, damages (including punitive damages), pre- and post-judgment interest, disgorgement, costs, and attorneys’ fees.

The complaint alleges that Amazon’s most favored nation agreements constitute “unreasonable vertical agreements in restraint of trade” by reducing and eliminating price competition among online retail sales platforms, and also create an artificially high price floor for products sold on those platforms. The complaint also alleges that by restraining third parties’ ability to offer lower prices and better terms on their own or other online retail sales platforms—and restraining other online retail sales platforms’ ability to compete for those sales by offering third-party sellers lower fees or better terms on which to offer their products—Amazon has engaged in horizontal agreements in restraint of trade, in violation of D.C. Code § 28-4502.

To learn more about Attorney General Racine, see our AG spotlight feature about him, below.

State AGs Send Letter to Facebook Urging the Company to Abandon Instagram for Kids

On May 10, a bipartisan coalition of 44 state and territory attorneys general sent a letter to Facebook CEO Mark Zuckerberg calling on the company to abandon any plans to expand Instagram to children under the age of 13.

The letter states that the “use of social media can be detrimental to the health and well-being of children, who are not equipped to navigate the challenges of having a social media account. Further, Facebook has historically failed to protect the welfare of children on its platforms. The attorneys general have an interest in protecting our youngest citizens, and Facebook’s plans to create a platform where kids under the age of 13 are encouraged to share content online is contrary to that interest.”

State AGs Call on Congress to Support Federal Funds for State Antitrust Enforcement

In a bipartisan letter to Congress, 46 state attorneys general urged key congressional members to “enhance the antitrust enforcement capabilities of the states.” The letter notes that a “bipartisan consensus is growing in Congress and beyond that more robust antitrust enforcement across a multitude of markets is needed. At the forefront of this consensus is Big Tech where we are confronted daily with the effects of extreme concentrations of market power amassed by firms in technology industries.” 

The state AGs explain that their offices “occupy critical roles in the antitrust enforcement community” and complement the U.S. Department of Justice and Federal Trade Commission. Additionally, the state AGs’ letter provides that “antitrust investigations and litigation require significant human and technological resources, including resources for economic and other experts.”

The letter highlights the growing bipartisan support, at the federal and state levels, in investigating and filing antitrust enforcement cases against Big Tech.

FTC and State AGs Join Forces in Wake of U.S. Supreme Court Decision Limiting FTC’s Powers

On April 22, the Supreme Court of the United States held in AMG Capital Management, LLC v. Federal Trade Commission that section 13(b) of the Federal Trade Commission Act does not authorize the commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.

In prepared remarks at the recent National Association of Attorneys General Consumer Protection conference, FTC Acting Chairwoman Rebecca Kelly Slaughter said that in light of the Court’s decision, the FTC is looking for ways to partner with state AGs given that the states have significant power to seek penalties under their respective state consumer protection statutes.

The FTC and six states recently filed a lawsuit against an internet service provider for alleged violations of section 13(b) of the FTC Act, as well as under the individual state consumer protection statutes. By combining forces with the state AGs, the FTC can utilize its powers and resources in conjunction with the states’ powers to exact significant restitution and penalties.

Michigan AG Nessel Takes Action Against Gas Station Operator for Price Gouging in Wake of Colonial Pipeline Shutdown

Michigan Attorney General recently sent a cease-and-desist letter to a Michigan gasoline station operator for allegedly selling gasoline at prices “grossly in excess” of prices being sold by other Michigan gasoline operators. The letter states that the timing of the increased gasoline prices corresponded with the cyberattack on the Colonial Pipeline, which significantly disrupted gasoline supply to the eastern portions of the United States.

The letter explains that although the Colonial Pipeline disruption affected the East Coast and had “no direct impact on the Michigan supply, there was heightened attention and anxiety about the gasoline market following the hack.”

Under Michigan’s price gouging law, it is unlawful to charge a consumer “a price that is grossly in excess of the price at which similar property or services are sold.” ^[1]

Oklahoma Attorney General Mike Hunter Resigns

Oklahoma Attorney General Mike Hunter announced his resignation late last month after allegations of an extramarital affair with a state employee, who is not in the attorney general’s office, came to light.

Governor Kevin Stitt will appoint a new attorney general. In his stint as Attorney General, Hunter litigated a case against opioid manufacturers under a public nuisance and hired outside contingency fee counsel. His office was also in the middle of continued litigation in light of the U.S. Supreme Court’s decision in McGirt v. Oklahoma. In McGirt, the court ruled (5-4) that land throughout much of eastern Oklahoma reserved for the Creek Nation since the 19th century remains a Native American territory.

Attorney General Spotlight – Washington, D.C., Attorney General Karl Racine

Each month Orrick will spotlight a state or territorial attorney general. We kick off this new segment of the newsletter with Washington, D.C., Attorney General Karl Racine, who is the current president of the National Association of Attorneys General (NAAG). Earlier this year, Orrick’s Rob McKenna hosted General Racine on a podcast to discuss General Racine’s NAAG presidential initiative and other matters.

General Racine was first elected in 2015 and won reelection in 2018. In 2021, General Racine became president of the NAAG. In addition to serving in that leadership role, General Racine is currently a co-chair of the nonpartisan Attorneys General Association.

Born in Haiti, General Racine came to the District at the age of three. He attended D.C. public schools, including Murch Elementary, Deal Junior High, and Wilson High, and graduated from St. John’s College High School. He earned a B.A. from the University of Pennsylvania, where he was captain of the basketball team, and a J.D. from the University of Virginia School of Law, where he volunteered in a legal clinic supporting the rights of migrant farm workers. His commitment to equal justice was inspired by his parents, who fled authoritarian rule in Haiti to start a better life in the United States, and by the lawyers of the Civil Rights Movement, who used the law to make positive social change.

Click here to learn more about General Racine.