Lina Khan-led FTC, 17 US states sue Amazon for antitrust practices

Washington: Lina Khan-led Federal Trade Commission (FTC) and 17 state Attorneys General in the US on Tuesday sued Amazon, alleging that the online retail and technology giant is a monopolist that uses a set of interlocking anti-competitive and unfair trade practices to illegally maintain its dominant position.

The FTC and its state partners said that 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.

"Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies," said FTC Chair Khan.

"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," she added.

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The complaint alleged that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging. 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’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers, said the FTC.

"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," said John Newman, Deputy Director of the FTC’s Bureau of Competition.

The FTC and states alleged that Amazon’s anti-competitive conduct occurs in two markets -- the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. The lawsuit makes Amazon the third tech giant after Google and Meta to be hit with sweeping US government allegations that the company spent years violating federal antitrust laws.

With inputs from agencies