The Federal Trade Commission (FTC) and 17 state attorneys general filed an antitrust lawsuit against Amazon on Tuesday, The Washington Post reports. The plaintiffs allege that Amazon is a monopolist that “has seized control over much of the online retail economy.” According to their suit, Amazon’s practices harm consumers and businesses.
In a news release, the FTC explains that Amazon’s alleged illegality is not a result of its size, but due to the fact it “engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”
Amazon has effectively snuffed out any competition by making it extremely difficult for any other retailers to compete on price, quality, or selection, the FTC claims.
“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 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.”
Some of the anti-competitive tactics the FTC says Amazon uses include punishing sellers for lower prices by burying their goods in search results, coercing sellers into obtaining Prime eligibility, and replacing organic search results with paid advertisements.
David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, pushed back against the suit’s allegations in a statement:
Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition. If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do.
You can read the entire 172-page complaint from the FTC and 17 states here.
