FTC calls Amazon a monopolist in massive antitrust case

2 days ago

Image: © Sundry Photography/Stock.adobe.com

The US commission claims Amazon uses anticompetitive and unfair strategies to maintain monopoly power and is seeking to permanently stop those practices.

Tech giant Amazon is facing a significant antitrust lawsuit from the US Federal Trade Commission (FTC) and 17 state attorneys.

The FTC has accused Amazon of using a mix of “anticompetitive and unfair strategies” to illegally maintain monopoly power. The commission claims this has degraded quality for shoppers, overcharged sellers, stifled innovation and prevented rivals from fairly competing.

The complaint alleges that Amazon’s practices prevent competitors from growing and stops new ones from emerging. FTC chair Lina M Khan said the company has used a set of “punitive and coercive tactics to unlawfully maintain its monopolies”.

“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,” Khan said yesterday (26 September).

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

The FTC is seeking a “permanent injunction” that would prohibit Amazon from engaging in some of its practices and “pry loose Amazon’s monopolistic control to restore competition”.

In response, Amazon claims its practices have helped to spur competition and innovation across the retail industry. The company’s senior VP for global public policy and general counsel, David Zapolsky, claimed this has led to greater selection, lower prices, and faster delivery speeds for Amazon customers.

“If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses – the opposite of what antitrust law is designed to do,” Zapolsky said. “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.”

In June, the FTC claimed Amazon had tricked millions of customers into subscribing to a Prime membership, while making it hard to cancel subscriptions.

Earlier this year, UK regulator Ofcom suggested that it may investigate both Amazon and Microsoft over alleged anticompetitive practices in the country’s cloud services market.

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Leigh Mc Gowran is a journalist with Silicon Republic