The Federal Trade Commission has launched a widely expected lawsuit against Amazon over alleged antitrust violations.
The FTC has been investigating Amazon’s business practices and preparing a case against the tech giant for months. The FTC makes clear that it is not suing Amazon become of its size, but because of alleged “exclusionary conduct” aimed at stifling competition from existing or potential rivals.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan. “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”
The FTC took special note of Amazon’s practice of punishing sellers who try to offer lower prices through other outlets, as well as the company’s efforts to force sellers into gaining “Prime” status, ensuring Amazon is able to charge them significant fees for fulfillment services. The agency also took issue with Amazon’s practice of pushing its own products, preferring advertised products over genuine results, and adding more fees to sellers, with many of them paying Amazon as much as 50% of what they earn.
“We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition. “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”
The FTC was joined in its lawsuit by the attorneys general of Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.