FTC Sues Amazon, Alleging Company Illegally Maintains ‘Monopoly Power’

The Federal Trade Commission filed an antitrust lawsuit against Amazon, alleging that the ecommerce and technology giant is a monopolist that “uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.”

Among the accusations, the FTC’s lawsuit, which was joined by 17 state attorneys general, allege that Amazon’s actions allow it to stop rivals and sellers from lowering prices; degrade quality for shoppers; overcharge sellers; stifle innovation; and prevent rivals from fairly competing against Amazon.

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The lawsuit — which has been brewing over the last several months — seeks a permanent injunction in U.S. federal court that would prohibit Amazon “from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition,” according to the FTC.

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC 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.”

In a statement, David Zapolsky, SVP of Amazon for global public policy and general counsel, said the lawsuit is “wrong on the facts and the law, and we look forward to making that case in court.”

“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” Zapolsky 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.” He continued, “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.”

Amazon in 2021 had formally asked the FTC that Khan recuse herself from antitrust investigations into the company. Amazon noted that Khan has made public comments about Amazon and its conduct, including that the company is “guilty of antitrust violations and should be broken up.” In 2017, Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal when she was a student at the university, arguing that “the current framework in antitrust” is “unequipped to capture the architecture of market power in the modern economy” as exemplified by Amazon.

The FTC commissioners voted 3-0 to authorize the lawsuit, filed in the U.S. District Court for the Western District of Washington in Seattle. The state AGs joining the suit are from Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

The lawsuit against Amazon comes as the Department of Justice’s antitrust case against Google is currently being heard in U.S. District Court for the District of Columbia, with the trial now in its third week.

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