The FTC – and 17 state attorneys general – have come out swinging at Amazon with a lawsuit accusing the ecommerce giant of being a monopolist.
Amazon, the FTC alleges, engages in anticompetitive conduct in two markets: online ecommerce and also the market for marketplace services used by sellers. The tactics used by Amazon to thwart competition include anti-discounting measures that punish sellers for offering prices lower than Amazons, and requiring vendors to use – and pay for – Amazon’s fulfillment services to make their products eligible for free Prime shipments, the FTC claims.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair and perennial Amazon opponent Lina Khan.
Khan describes Amazon’s as exploiting monopolistic power to enrich itself by raising product prices and degrading services for its customers and businesses. “Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” Khan added.
Amazon’s “monopoly rents” are extracted from “everyone within its reach,” the FTC alleges. This hurts customers by replacing relevant organic search results with ads and boosting Amazon’s own products in search results. In addition, excessive fees are allegedly leveled at Amazon sellers, which the FTC said can amount to close to half of a store’s revenue going directly to the online souk, and which it asserts are passed on to consumers.
“We can and should break up Amazon,” said Athena Coalition, a self-described anti-Amazon grassroots group, in a statement. “Amazon has a long history of combining and utilizing its many businesses together as an integrated whole to leverage its power against workers, businesses, and ultimately all of us.”
The group said that an FTC victory would free Amazon sellers to work with whomever they chose, rather than being forced to go to Amazon. Rather than harming consumers, Athena said that an Amazon reigned in by the FTC would also mean more choice and lower costs for Amazon customers, too.
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