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Federal Trade Commission sues Amazon for exploiting its monopoly power

The lawsuit was filed by the FTC along with 17 attorneys general from different states accusing Amazon of committing "unfair practices."

Amazon

(Wikimedia Commons)

Published by
Rosana Rábago Sainz

Amazon is once again in legal trouble with the Biden administration. The Federal Trade Commission (FTC) is suing Amazon for being a monopoly and "inflating prices." Specifically, the organization stated in a press release that the company is "a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power":

The FTC and its state partners say 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.

The lawsuit claims that these "unfair practices" affected more than 100 million users as well as smaller competitors. They were affected by Amazon's high prices which prevented them from competing directly with them:

By stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance.

Amazon is being sued for its tactics to "unlawfully maintain its monopolies"

For this reason, the Federal Trade Commission has decided to file this lawsuit. Lina M. Khan, chair of the FTC, said that Amazon has impacted hundreds of billions of dollars of retail sales not only by creating a monopoly but also by "maintaining it illegally":

Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies. 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. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.

John Newman, deputy director of the FTC's competition office, issued a statement and claimed that the company "uses its power to hike prices on American shoppers":

We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers. Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.

The lawsuit was filed by both the federal agency and 17 attorneys general from various states around the country. The states that joined the FTC complaint were 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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