The lawsuit claims that Amazon’s purportedly anticompetitive practices hurt businesses and consumers alike.
The Federal Trade Commission has filed a lawsuit against Amazon, claiming that the world’s largest online retailer has used its market power to eliminate competition and control the e-commerce market.
According to NBC News, the allegations center on Amazon’s best-known business, Amazon.com.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” F.T.C. Chair Lina Khan said in a statement. “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.”
In its complaint, the F.T.C. claims that Amazon leverages its size and sheer financial power to coerce sellers into agreeing to Amazon’s terms.
“There is immediate harm that is ongoing here,” Khan said. “Sellers are paying 1 out of every $2 to Amazon. Shoppers are paying higher prices as a result, not just on Amazon but across the internet.”
“And the public as a whole has been deprived of the benefits of open and fair and free competition. And so that’s what this case is really about, and those are the harms that we’re looking to fix,” Khan said.
The Federal Trade Commission, writes NBC News, made its allegations in an antitrust lawsuit filed in U.S. District Court for the Western District of Washington earlier this week. It is supported by at least 17 state attorneys general, including two Republicans.
While has publicly declined to say whether the F.T.C. intends to dissolve Amazon into smaller companies, she did say that the lawsuit shows how Amazon has established, and enforces, an unfair advantage.
“Each element of Amazon’s monopolistic strategy here is working in tandem, and so the cumulative impact of Amazon’s unlawful conduct is greater than the harm caused by any particular element,” Khan said. “So you have a feedback loop between these different practices in a way that amplifies the overall exclusionary effects.”
Amazon has, not surprisingly, already pushed back against the agency’s allegations, saying that the company’s practice have been a net-benefit for American consumers, American businesses, and global commerce.
“The practices the F.T.C. is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store,” Amazon Senior Vice President for Global Public Policy David Zapolsky said.