Amazon is being sued by the Federal Trade Commission and 17 state attorneys general over allegations of monopolistic practices in a lawsuit filed today in western Washington state. NPR summarizes the complaints about Amazon as spurred by it owning not only “the online platform that many sellers use to reach shoppers” while also owning the related shipping and delivery services and still selling its own products “on that very same platform.”
The lawsuit accuses Amazon of “unfair methods of competition” towards both consumers and third-party retailers that sell on its platform, alleging that Amazon has “seized control over much of the online retail economy” by “exploit[ing] its monopolies in ways that enrich Amazon but harm its customers.”
Amazon is accused of prohibiting its third-party retailers from selling at lower prices on other platforms, and essentially forcing them to use its shipping services in exchange for placement on Amazon Prime, as reported by the New York Times. The FTC and the state AGs say these practices have resulted in “artificially higher prices” and a worse shopping experience for consumers, per the Times.
Amazon’s senior vice president of global public policy and general counsel David Zapolsky said the FTC lawsuit would have the opposite of its intended effects, and claimed it was “wrong on the facts and the law.”
Jacqui Germain, former fellow at Teen Vogue, explained that the FTC “enforces consumer protections, guards against predatory business practices, and ensures fair market competition,” which includes enforcing antitrust regulations on monopolistic companies.
“To put it plainly, we use [the term] monopoly to refer to corporations with excessive unchecked, private power over our lives,” Becky Chao, director of Antimonopoly at the Economic Security Project, told Germain in 2021.
FTC Chair Lina Khan said the complaint accuses the country’s most popular online store of “unlawfully maintain[ing] its monopolies” by “us[ing] a set of punitive and coercive tactics,” per Ars Technica. “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,” said Khan.
The 17 states party to the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.
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