Prime Targets: Amazon, No-Poach Rules, and the Limits of Antitrust
The State of New Jersey’s antitrust case against Amazon begins with a serious allegation: that Amazon restricted drivers from moving among competing delivery contractors. But the state’s complaint goes much farther. It argues that Amazon’s entire Delivery Service Partner (DSP) system unlawfully gives the company monopsony power over both the small businesses that deliver its packages and the drivers they employ.
The complaint, filed Aug. 4, tests how far antitrust law should reach into labor arrangements. Invoking Sections 1 and 2 of the Sherman Act, the New Jersey Antitrust Act, and the state’s authority to seek damages and injunctive relief, New Jersey asks a federal court to treat an integrated logistics system as an unlawful buyer cartel. It also leaves the door open to structural remedies against a business model Amazon created to expand its delivery capacity.
The allegations deserve serious attention. An agreement among competing employers not to hire one another’s workers can deprive those workers of a valuable competitive option. Retaliation for organizing, if proved, can violate labor law and may signal an effort to suppress competition.
But the complaint repeatedly blurs three distinct propositions: that a worker or contractor has been mistreated, that a firm possesses buyer power, and that the firm unlawfully acquired or maintained that power through exclusionary conduct. Proving the first does not prove the other two.
New Jersey’s no-poach theory is the case’s strongest component. If the state can prove a broad and unjustified restriction on workers moving among genuinely competing DSPs, that claim could warrant discovery, a targeted injunction, or a settlement.
The broader monopsony theory is far shakier. The complaint defines markets around Amazon’s proprietary operating system, treats ordinary obstacles to job searches and worker-employer matching as barriers that effectively lock workers in, and assumes that lower compensation or demanding performance standards are anticompetitive without adequately considering their efficiency rationales. Most important, it never credibly explains how the challenged labor practices harm consumers in the downstream market for delivered goods and services.
New Jersey’s challenge therefore looks less like a careful application of antitrust law than an effort to stretch antitrust to reach distribution practices that have delivered substantial benefits to consumers.