FTC Files Antitrust Lawsuit Against Amazon

The Federal Trade Commission (FTC) has filed an antitrust lawsuit against Amazon, alleging that the company has used its market power to distort e-commerce across the internet.

The lawsuit, backed by attorneys general from 17 states, including two Republicans, focuses on Amazon’s primary marketplace, Amazon.com. It accuses the company of pressuring sellers to agree to its terms and driving up the prices of goods, ultimately harming both sellers and consumers.

FTC Chair Lina Khan, a longtime critic of Amazon, highlighted the ongoing harm caused by the company’s practices. She stated, “Sellers are paying one 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.”

The lawsuit is part of the FTC’s efforts to reinvigorate enforcement of competition laws, particularly in the technology sector. It alleges that Amazon discourages sellers from discounting goods and pushes prices higher across the internet. Additionally, the FTC argues that Amazon’s practices force sellers into its fulfillment services, making it more expensive for them to offer their products elsewhere.

While Khan did not directly address whether she hoped the lawsuit would lead to a breakup of Amazon, she emphasized that it demonstrated Amazon’s 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,” she said. “So you have a feedback loop between these different practices in a way that amplifies the overall exclusionary effects.”

Amazon, in response, defended its practices and claimed they had spurred competition and innovation in the retail industry.

In a statement posted to Amazon’s website, David Zapolsky, Amazon’s senior vice president for global public policy, said: “The practices the FTC 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.”

Under Khan’s leadership, the FTC has already taken multiple actions against Amazon this year, including suing the company over its automatic renewal of Prime subscriptions and proposing a $25 million penalty for alleged improper storage of children’s data collected through Alexa devices.

This lawsuit marks a significant escalation in the government’s efforts to address competition concerns related to Amazon and other tech giants. It is expected to be a lengthy legal battle, with the outcome uncertain as it depends on whether the FTC can prove that Amazon’s actions harmed consumers.

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