FTC Hits Amazon with Landmark Monopoly Lawsuit
It’s not a “Go Directly to Jail” card, but it’s close. According to news sources, the U.S. Federal Trade Commission filed a long-awaited antitrust lawsuit against Amazon.com and asked the court to consider forcing the online retailer to sell assets as the government accuses Big Tech of monopolizing the most lucrative parts of the internet.
The FTC accused Amazon, a company started in a garage in 1994 and today worth $1.3 trillion, of fighting efforts by sellers on its online marketplace to offer products more cheaply on other platforms. Amazon forces sellers to use its warehouses and delivery services, inflating costs for consumers and sellers, the FTC said.
Amazon is a monopoly and misuses its powers, according to the FTC, which quotes a seller as saying: “We have nowhere else to go and Amazon knows it.”
The lawsuit had been expected after years of complaints that Amazon.com and other tech giants abused their dominance of search, social media and online retailing to become gatekeepers on the most profitable aspects of the internet. The lawsuit, which was joined by 17 state attorneys general, follows a four-year investigation and federal lawsuits filed against Alphabet’s (GOOGL.O) Google and Meta Platforms’ (META.O) Facebook.
The FTC said that it was asking the court to issue a permanent injunction ordering Amazon to stop its unlawful conduct. The lawsuit was filed in federal court in Seattle, where Amazon is based.
“Left unchecked, Amazon will continue its illegal course of conduct to maintain its monopoly power,” the FTC said in its complaint which asked 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.”
Amazon said that the FTC lawsuit was wrongheaded and would hurt consumers by leading to higher prices and slower deliveries.
“The 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’s store,” said David Zapolsky, Amazon’s general counsel. In a blog post, the company noted that it had 500,000 independent sellers on the platform.
“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,” said Stacy Mitchell of the Institute for Local Self-Reliance, which has pushed for the government to act against Amazon.
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