The Federal Trade Commission and 17 state attorney generals filed an antitrust lawsuit against Amazon on Tuesday — the latest government attempt at breaking Big Tech’s dominance of the internet.
The lawsuit, which followed a four-year investigation, alleges that the Seattle-based e-commerce behemoth uses its position in the marketplace to inflate prices on other platforms, overcharge sellers and stifle competition, according to the complaint filed in US District Court for the Western District of Washington.
According to the statement released by the agency, “The FTC and its state partners say 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.”
The chair of the FTC, Lina Khan, who gained recognition for her scholarly paper on Amazon’s market dominance, has asked the court to issue a permanent injunction ordering Amazon to stop its unlawful conduct.
Amazon, a trillion-dollar company founded in 1994, is strongly contesting this significant legal challenge. This lawsuit follows federal lawsuits filed against other major tech companies like Google and Facebook.
In response to the lawsuit, Amazon said, “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition.”
The company further defends its practices, stating that they have led to greater competition, innovation, lower prices, and faster delivery speeds for customers, as well as increased opportunities for businesses selling on Amazon’s platform.
Amazon argues that if the FTC’s allegations are valid, it would result in reduced product selection, higher prices, slower deliveries for consumers, and limited options for small businesses – the opposite of what antitrust law intends to achieve. The company stated, “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
After the FTC announced the legal filing, Amazon’s shares closed down by 4% to $125.98.
The New York Post has reached out to Amazon for comment.
Lina Khan, the chair of the FTC, stated, “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.”
There has been speculation about whether the agency would push for a forced break-up of Amazon. However, during a briefing with reporters, Khan avoided answering questions about that possibility and stated, “At this stage, the focus is more on liability.”
The lawsuit against Amazon has been welcomed by its critics, who believe the company has amassed too much power across various sectors. Stacy Mitchell of the Institute for Local Self-Reliance, which advocates for government action against Amazon, said, “No corporation has ever centralized this much power across so many crucial sectors. Left unchecked, Amazon’s power to dictate and control threatens the rule of law and our ability to maintain open, democratically governed markets.”
Both Democrats and Republicans have found common ground in the need to take action against Big Tech. During the Trump administration, the Justice Department and FTC initiated investigations into Google, Facebook, Apple, and Amazon. These investigations have continued under the Biden administration as well, with the Justice Department suing Google twice and the FTC suing Facebook.
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