The FTC filed an antitrust lawsuit in the U.S. District Court for the Western District of Washington, backed by the attorneys general of 17 states, including two Republicans.<\/p>\n\n\n\n
The Federal Trade Commission, the U.S. government\u2019s primary business regulator, sued Amazon on Tuesday<\/a>, alleging that the company has used its market power to warp ecommerce across the internet.<\/p>\n\n\n\n The allegations focus on the company\u2019s primary marketplace, Amazon.com, and paint a picture of a company able to use its size and power to pressure sellers to agree to its terms and warp the prices of goods.<\/p>\n\n\n\n \u201cThere is immediate harm that is ongoing here,\u201d FTC Chair Lina Khan said at a news conference ahead of the lawsuit announcement. \u201cSellers are paying one of every $2 to Amazon. Shoppers are paying higher prices as a result, not just on Amazon but across the internet. And the public as a whole has been deprived of the benefits of open and fair and free competition. And so that\u2019s what this case is really about, and those are the harms that we\u2019re looking to fix.\u201d<\/p>\n\n\n\n The FTC made the allegations in an antitrust lawsuit in the U.S. District Court for the Western District of Washington state, backed by the attorneys general of 17 states, including two Republicans. Amazon is based in Washington state.<\/p>\n\n\n\n The lawsuit is the most aggressive action yet by Khan, a longtime critic<\/a> of Amazon who was brought in to the FTC by President Joe Biden to reinvigorate the government\u2019s enforcement of competition laws<\/a> particularly around technology companies.<\/p>\n\n\n\n The FTC alleges that Amazon deters sellers from discounting goods and lowering prices below what is available on Amazon, pushing prices higher across the internet. It also argues that Amazon pushes sellers into its fulfillment services, making it more expensive for sellers to offer their goods elsewhere.<\/p>\n\n\n\n California lodged similar complaints in a lawsuit filed just more than a year ago<\/a>.<\/p>\n\n\n\n Kahn declined to directly address whether she hoped the suit would lead to a breakup of Amazon into smaller companies, but stressed that it showed Amazon had established an unfair advantage.<\/p>\n\n\n\n \u201cEach element of Amazon\u2019s monopolistic strategy here is working in tandem, and so the cumulative impact of Amazon\u2019s unlawful conduct is greater than the harm caused by any particular element,\u201d she said. \u201cSo you have a feedback loop between these different practices in a way that amplifies the overall exclusionary effects.\u201d<\/p>\n\n\n\n In a statement posted to Amazon\u2019s website<\/a>, David Zapolsky, Amazon’s senior vice president for global public policy, said: \u201cThe practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon\u2019s store.\u201d<\/p>\n\n\n\n Under Khan\u2019s leadership, the FTC has already taken several actions to counter Amazon this year. It sued the company in June<\/a> for how it automatically renewed customers\u2019 Prime subscriptions. It has proposed that Amazon pay $25 million for alleged improper storage of children\u2019s data<\/a> obtained through Alexa devices. And Amazon settled with the agency for $5.8 million in May<\/a> after the FTC accused it of allowing employees to view data obtained via Ring cameras.<\/p>\n\n\n\n The lawsuit is the latest aggressive action taken by the FTC in recent decades, extending Khan\u2019s efforts to take on giants like Microsoft and Google \u2014 with mixed results<\/a>. Federal judges in both cases swatted down the FTC\u2019s actions.<\/p>\n\n\n\n William Kovacic, a former FTC chairman who is now a professor at George Washington University, said the case will come down to whether the FTC can prove that Amazon’s actions hurt consumers.<\/p>\n\n\n\n “The heart and soul of the case will be the debate over whether or not the technicques used by Amazon improved consumer experience or degraded it,” he said.<\/p>\n\n\n\n Kovacic noted that antitrust trials like these usually take at least three years just for an initial decision, after which come appeals that can drag on for more years.<\/p>\n\n\n\n He called the case “an enormously ambitious undertaking” especially when considered in the context of the FTC’s other ongoing cases.<\/p>\n\n\n\n Amazon’s share price ticked up slightly after the FTC announcement, though its shares were down about 2.6% on the day as of early Tuesday afternoon. Amazon shares are up almost 50% in 2023, outpacing the S&P 500, which is up about 12%.<\/p>\n\n\n\n <\/p>\n\n\n\n