US competition authority files antitrust lawsuit against Amazon
So now the time has come: The US competition authority FTC and 17 attorneys general from various US states filed a comprehensive antitrust lawsuit against the online retailer Amazon on Tuesday. They accuse the group of unlawfully exploiting its market dominance to squeeze out potential competitors and of driving up prices for consumers through unlawful business practices.
The lawsuit, filed in the US District Court Western District of Washington under case number 2:23-CV-01495 (PDF), accuses Amazon of violating the law because the company engages in exclusionary behavior that prevents current competitors from growing and prevents new competitors from emerging. By stifling competition on price, product selection and quality, and preventing its current or future competitors from attracting a critical mass of buyers and sellers, Amazon is ensuring that no current or future competitor can threaten its dominance, the accusation goes.
“Our lawsuit details how Amazon used a variety of punitive and coercive tactics to unlawfully maintain its monopoly power,” FTC Chairwoman Lina Khan was quoted as saying in a statement on Tuesday. “The lawsuit details how Amazon exploits its monopoly power to enrich itself while raising prices and reducing service to the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon depend on to reach them, worsened.” The lawsuit aims to “hold Amazon accountable for these monopolistic practices and restore the lost promise of free and fair competition,” Khan continued.
FTC wants to restore competition
Specifically, the FTC accuses Amazon of using anti-discounting measures to punish sellers and discourage other online retailers from offering lower prices than Amazon, thereby keeping the prices of products higher across the Internet. Amazon also restricts which sellers can take advantage of Prime shipping benefits. The agency is also targeting Amazon’s ability to influence its online search results in favor of its products.
The FTC states that it is “seeking a permanent injunction in federal court prohibiting Amazon’s unlawful conduct and reversing Amazon’s monopolistic control to restore competition.” Rumors about a possible lawsuit by the FTC have been circulating for months, and recently the signs had increased.
Clinch between FTC and Amazon with a history
The FTC has attacked Amazon several times in recent months. In June, the FTC filed a lawsuit against the tech giant for using unfair methods to force paid Prime subscriptions on customers. In addition, there is the billion-dollar takeover of the vacuum cleaner robot iRobot by Amazon, which the FTC has been examining since last year, as well as the takeover of the US media group MGM.
The FTC has also scrutinized other areas of Amazon’s business, including privacy violations by Amazon’s Alexa and surveillance cameras by Amazon’s doorbell service Ring. Amazon will pay around $31 million to settle a lawsuit and a complaint from the FTC, it said in early June.
Earlier this year, Amazon agreed to pay $5.8 million to settle an FTC lawsuit that accused Ring employees and hackers of illegally spying on customers, US tech portal The Verge reports.
Reservations against the FTC chairwoman
The Amazon investigation that led to Tuesday’s lawsuit began under Joe Simons, the former FTC chairman under President Donald Trump. Lina Khan, the current FTC chairwoman, has long criticized Amazon’s dominance in e-commerce and has ramped up the agency’s ongoing investigation into Amazon after her confirmation in 2021 by US President Joe Biden.
Khan is a well-known Amazon critic. Before leading the FTC, Khan wrote a 2017 article for the Yale Law Journal titled “Amazon’s Antitrust Paradox.” Following Khan’s appointment as FTC chairwoman, Amazon called for her to withdraw from all antitrust investigations and argued in a 25-page petition that Kahn could not be impartial in antitrust matters affecting Amazon because, as an academic and author, she had strongly criticized the company .
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