Thursday 28 September 2023

FTC sues Amazon for illegal conduct and a long list of monopolistic practices

 The Federal Trade Commission (FTC), with the support of at least 17 states, has filed its long-awaited antitrust lawsuit against Amazon for allegedly engaging in illegal conduct and "monopolistic practices" within its online store and merchant services.

The FTC is asking the court to consider forcing the online retailing giant to sell some of its assets as the federal government accuses Amazon and other Big Tech companies of monopolizing the most lucrative parts of the internet.  

Amazon, a company started by Jeff Bezos in 1994 with the help of a nearly $250,000 loan from his parents, is now worth around $1.3 trillion and has been beset by efforts from the FTC and other government and non-government groups fighting efforts to prevent the tech giant from taking control over the entirety of the online retail industry.

The FTC's lawsuit has been expected for some time and is actually at least four years in the making, with the government agency having spent those years collecting complaints that Amazon and other tech giants have abused their dominance over social media, search engines and online retailing to become gatekeepers on the most profitable aspects of the internet.

The lawsuit against Amazon was filed in the United States District Court for Western Washington in Seattle, where the company is headquartered. The FTC is joined by 17 state attorneys general from Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin – two Republicans and 15 Democrats.

This is the latest attack on Amazon by the FTC, which more recently was able to get the tech giant to settle a lawsuit filed in May over allegations of snooping on children with Ring cameras. In June, the FTC sued Amazon again for tricking customers into signing up for Prime subscriptions and then making it unnecessarily difficult to cancel them.

Amazon's monopolistic practices preventing proper growth in the free market

The FTC's complaint and lawsuit argue that Amazon is a monopoly and misuses its powers as the largest online retailer in the United States.

"The complaint alleges 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," announced the FTC in a press release.

"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," continued the FTC. "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."

With this position in the market, the FTC claims that Amazon is able to force sellers to use its warehouses and delivery services, thereby inflating costs for consumers and sellers alike. The FTC also argued that Amazon fights off efforts by sellers on its platform to offer products more cheaply on other platforms. In its filing, the FTC even quoted a seller who said: "We have nowhere else to go and Amazon knows it."

The FTC is asking the court for a permanent injunction ordering Amazon to stop its unlawful conduct.

"Left unchecked, Amazon will continue its illegal course of conduct to maintain its monopoly power," said the FTC in its complaint. The FTC is also asking the court to "put an end to Amazon's illegal course of conduct, pry loose Amazon's monopolistic control, deny Amazon the fruits of its unlawful practices and restore the lost promise of competition."

The FTC is further asking the court to consider "any preliminary or permanent equitable relief, including but not limited to structural relief, necessary to restore fair competition." A structural relief order would force a company to sell its assets, such as a part of its business.

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