Seventeen state attorneys generals and The Federal Trade Commission filed a suit against Amazon.com, Inc. alleging that the company uses interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. According to the Federal Trade Commission, Amazon's practices make it difficult for competitors to undercut prices and for sellers to make a profit, and they also overcharge sellers.
This case alleges that Amazon breaks the law by engaging in exclusionary practices that stunt the development of existing competitors and the emergence of new ones in its market. Amazon prevents any competition from challenging its hegemony by undercutting them on price and selection. "Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies," noted FTV Chair Lina M. Kahn. "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." The lawsuit filed today aims to make Amazon answer for its monopolistic activities and bring back the promise of free and fair competition.
According to the Federal Trade Commission, Amazon engages in anticompetitive behavior in two distinct markets: the market for online marketplace services purchased by sellers and the market for online superstores. The corporation uses strategies such as making vendors use Amazon's expensive fulfillment service in order to qualify their products for sale in the "Prime" category. Because of this move, it is now more expensive for Amazon vendors to sell their wares on both Amazon and other marketplaces. Amazon has also implemented anti-discounting measures, which punish sellers and discourage other online retailers from offering prices lower than Amazon. This practice has the effect of keeping prices higher throughout all internet platforms.
Thousands upon thousands of vendors are forced to pay exorbitant fees to Amazon or go out of business. Many vendors end up giving Amazon close to 50% of their profits because of these fees. In federal court, the FTC is seeking a permanent order to prevent Amazon from engaging in unlawful activity and to restore competition.
