(Reuters) - An appeals court in Washington, D.C. revived the district's lawsuit against Amazon.com Inc ( AMZN ) on Thursday, saying it plausibly claimed the online retailer's pricing policies illegally stifle competition.

The District of Columbia Court of Appeals reversed a ruling that had dismissed the lawsuit, which accuses Amazon ( AMZN ) of harming competition through restrictions on its suppliers and third-party sellers on Amazon.com ( AMZN ).

Amazon ( AMZN ) is currently seeking dismissal of another case involving similar claims by the U.S. Federal Trade Commission and more than a dozen states.

Amazon ( AMZN ) spokesperson Tim Doyle said the company disagrees with the appeals court ruling and looks forward to proving its policies benefit consumers.

"Just like any store owner who wouldn't want to promote a bad deal to their customers, we don't highlight or promote offers that are not competitively priced," he said.

D.C. Attorney General Brian Schwalb welcomed the court's ruling in a statement.

"We will continue fighting to stop Amazon's ( AMZN ) unfair and unlawful practices that have raised prices for District consumers and stifled innovation and choice across online retail," he said.

D.C. sued Amazon ( AMZN ) in May 2021 claiming Amazon ( AMZN ) effectively bans third party sellers from offering products for less elsewhere by refusing to highlight their listings if they do.

The lawsuit also claims Amazon ( AMZN ) has agreements with wholesalers that guarantee it a minimum profit. As a result, the complaint alleges, if Amazon ( AMZN ) lowers a price to compete with another online seller, the wholesaler must pay Amazon ( AMZN ) the difference between the price it sells at and the agreed minimum. These payments are a disincentive for wholesalers to lower prices to compete, the complaint said.

The D.C. appeals court said on Thursday the judge who dismissed the case in May 2023 set the bar too high, and the attorney general had a plausible claim the practices harmed competition in the online retail marketplace.