Amazon is being sued … again. This time, the Seattle-based e-commerce company is being accused of trademark infringement by upscale bedding company The Comphy, which claims in the compliant it filed last week in a federal court in Illinois, that Amazon is running afoul of the law by allegedly providing search results for "inferior third-party sheets" when consumers search on its platform for terms like "comph" and "comphy.”
Washington-based Comphy, which does not stock of Amazon’s site, alleges that when consumers search for the word “comphy” on Amazon.com, the Amazon “algorithm populates a page of search results for inferior and unauthorized third-party sheets,” including for similarly-named competitor “Comfy,” which are listed as “Sold by Comfy Sheets and Fulfilled by Amazon.” Amazon does not, according to the complaint, “indicate that Comphy-brand sheets are unavailable on amazon.com,” thereby leading to consumer confusion and complaints as to the quality of the products.
Comphy is seeking an array of monetary damages in connection with Amazon’s allege foul play and an injunction which would prevent Amazon from returning search results for Comphy’s competitors in response to a search for its name.
The lawsuit comes amidst building concerns over Amazon’s building out of an arsenal of private labels and its treatment of search terms on its platform to provide preferential treatment for those Amazon-owned brands.
As the New York Times pointed out last month, Amazon engages in a careful practice of “optimizing word-search algorithms, analyzing competitors’ sales data, [and] using its customer-review networks — to steer shoppers toward its in-house brands and away from its competitors.”
In light of Amazon’s use of “its powerful platform to bolster its private-label business,” whether it be apparel and accessories or batteries and home goods, “there is also debate in legal circles whether some of its activities could be viewed as monopolistic in nature.”
“I think there is a potential monopolization case against Amazon,” Chris Sagers, an antitrust professor at the Cleveland-Marshall College of Law in Ohio, told the Times. “If they are getting massive penetration in the market and preventing customers from buying products from their competitors,” that could be problematic from an antitrust perspective, a topic that has been of growing interest amongst market analysts and legal professionals, alike.
A representative for Amazon was not immediately available for comment.
* The case is The Comphy Co. v. Amazon.com, Inc., 1:18-cv-04584 (N.D. Ill).