Amazon Faces Major Antitrust Lawsuit by FTC and 17 States
Posted: 2023-09-27
By: dwirch
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Today, the Federal Trade Commission (FTC) alongside 17 state attorneys general initiated legal action against Amazon. They allege that Amazon unlawfully sustains its monopoly power through several restrictive tactics.
FTC Chair, Lina Khan, highlighted that the lawsuit details Amazon's exploitation of its monopoly. By leveraging this power, Amazon allegedly benefits itself at the expense of millions of American consumers and countless businesses that depend on the platform. The overarching goal of this lawsuit is to ensure Amazon is held accountable for such practices and to reinstate genuine competition.
Filed in the US District Court for the Western District of Washington, the lawsuit aims to secure a permanent injunction preventing Amazon from its alleged monopolistic behavior. This would be an essential step to reintroduce competition to the market.
The legal action specifically asserts that Amazon's actions violate both federal and state regulations. A key objective is to obtain an injunction against the described behavior. Additionally, "structural relief" is being sought, which could potentially lead to the breakup of the company.
States supporting the FTC in this lawsuit include Connecticut, Delaware, Maryland, Massachusetts, Michigan, New Jersey, New York, Oregon, Pennsylvania, and several others.
This move against Amazon has been anticipated for some time and is considered a significant step following previous FTC allegations. The FTC's contention revolves around Amazon's dominant position in online retail and its marketplace services. The commission claims that the company's anti-competitive actions hinder competitors, resulting in inflated fees for sellers. This, in turn, negatively impacts consumers due to elevated product prices both on and off Amazon.
The FTC further criticized Amazon for allegedly favoring its products in search results and promoting paid advertisements over organic search results, despite being aware of better quality alternatives.
In response, Amazon's Global Public Policy & General Counsel, David Zapolsky, argued that the FTC's claims are baseless. He emphasized that Amazon's practices have, in fact, promoted competition and innovation in the retail sector, offering more choices, competitive prices, and faster delivery for consumers.
This isn't the first time the FTC has taken on Amazon. Previous legal actions include allegations of misleading consumers into Amazon Prime subscriptions and violating privacy with Alexa voice recordings and Ring camera footage. Both instances resulted in settlements where Amazon agreed to financial penalties and privacy reforms.
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