On Tuesday, the United States filed a lawsuit against Amazon on charges of engaging in monopolistic practices aimed at “inflating prices, deteriorating quality, and stealing innovation from consumers and companies.”
The FTC, along with 17 state attorneys general, accuses Amazon of “preventing its competitors from lowering prices, degrading quality for its customers, increasing prices to sellers, creating obstacles to innovation and preventing others from competing fairly.” The lawsuit, which claims that about 100 million buyers were harmed by these practices, estimates damages in the hundreds of millions of dollars annually. “Rarely in history has antitrust law been used with the potential for this case to do so much good for so many people,” the FTC said in a statement sent Tuesday.
This legal measure can be interpreted as part of the Biden administration’s attack to limit the power of large American technology companies. Other open cases have targeted Google or Microsoft, in their attempts to buy the video game company Activision.
“Our complaint exposes how Amazon has used a range of punitive and coercive tactics to illegally maintain its monopolies,” FTC Chairwoman Lena Khan, who has proven to be the scourge of Silicon Valley since the administration, said in the memo. A committee. “The lawsuit makes detailed allegations alleging how Amazon is 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 companies that rely on Amazon for their business.” The lawsuit filed today seeks to hold Amazon liable for… These monopolistic practices and restore the lost promise of free and fair competition.”
The tactics cited by Khan include, among others, “anti-discounting measures that penalize sellers and discourage other retailers from offering lower prices than Amazon.” One such trick to undermine competition is demoting a seller offering better deals than a multinational company by placing it so low in search results that it becomes virtually invisible. It also accuses Amazon of creating obstacles for companies to benefit from Prime Club membership for its products, which allows free shipping.
According to the lawsuit, Amazon also harms competition by requiring sellers on its platform to use its internal logistics services or by forcing them to sell their products at lower prices on the website founded by Jeff Bezos than anywhere else in the world. This was actually the subject of a separate lawsuit filed by California’s attorney general last year.
The states added to the case are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.
Khan has made auditing Amazon one of his crusades long before he joined the US administration. In 2017, he signed an influential legal article condemning the company’s desire for a monopoly in the United States. Then, as part of a congressional investigation into alleged abuses by the tech industry, he worked on a 450-page report on how the greed for market control at Amazon, Apple, Google and Meta “hindered innovation, reduced consumer choice, and weakened.” democracy.”
This year, the Federal Trade Commission has already sued Amazon for tricking millions of its customers into joining its Prime program, for which they pay a monthly or annual fee. It also imposed a multimillion-dollar settlement to bury allegations of privacy violations by the company’s home devices, such as Alexa.
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