Amazon accused of ‘exploiting monopoly power’ in antitrust lawsuit

The FTC filed the lawsuit against Amazon.com on Tuesday (September 26) and asked the court to consider a permanent injunction to stop the ecommerce giant from unlawful conduct and free up its “monopolistic control to restore competition”.

Amazon has also been criticised by the FTC for its alleged anti-competitive practices that prevent sellers from lowering prices, degrade quality for shoppers and unlawfully exclude rivals.

FTC chair Lina Khan said: “Amazon is a monopolist and it is exploiting its monopolies in ways that leave shoppers and sellers paying more for worse service.

“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.”

The lawsuit comes after years of investigating Amazon’s practices. Attorneys general from Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin have joined the lawsuit.

The FTC claimed Amazon uses anti-discounting measures to prevent other online retailers from offering prices, ensuring its prices for products across the internet are higher.

Amazon is also accused of having its search results “biased” towards its own products and that sellers are being forced to pay “costly fees” that count for half of their total revenues to remain in business.

Amazon general counsel and senior vice president of global public policy David Zapolsky said it “respects the role the FTC has historically played in protecting consumers and promoting competition” but the “misguided lawsuit” could force Amazon to “engage in practices that actually harm consumers and the many businesses that sell in our store”.

He said: “The FTC’s case alleges that our practice of only highlighting competitively priced offers and our practice of matching low prices offered by other retailers somehow lead to higher prices. But that’s not how competition works. 

“The FTC has it backwards and if they were successful in this lawsuit, the result would be anti-competitive and anti-consumer because we’d have to stop many of the things we do to offer and highlight low prices — a perverse result that would be directly opposed to the goals of antitrust law.”