The Federal Trade Commission on Tuesday, Sept. 26, filed a lawsuit in federal court against online retailer Amazon. In the lawsuit, the FTC accuses Amazon.com, Inc. of monopolistic practices.
The FTC, along with 17 state attorney generals that signed on to the lawsuit, says Amazon’s strategies “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 17 states that signed onto the FTC lawsuit include:
- Connecticut
- Deleware
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New Hampshire
- New Mexico
- Nevada
- New York
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- Wisconsin
The lawsuit is the result of a yearslong investigation into the Seattle-based company. It marks one of the most significant legal challenges in Amazon’s decades long-history.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan.
Khan says those tactics include punishing sellers for offering discounted prices that may be lower than Amazon’s by burying the discounting sellers in Amazon’s search results, effectively rendering them invisible.
The FTC has asked a federal judge to order a permanent injunction “that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.”
In a statement, Amazon’s general counsel, David Zapolsky, said that the lawsuit is misguided and would end up hurting consumers and sellers in the long run.
“We respect the role the FTC has historically played in protecting consumers and promoting competition. Unfortunately, it appears the current FTC is radically departing from that approach, filing a misguided lawsuit against Amazon that would, if successful, force Amazon to engage in practices that actually harm consumers and the many businesses that sell in our store—such as having to feature higher prices, offer slower or less reliable Prime shipping, and make Prime more expensive and less convenient,” Zapolsky wrote.
The lawsuit comes as the FTC has already sued Amazon this year, alleging that the online retailer was enrolling customers in Prime without consent and making it difficult to cancel the subscription.
In 2021, Amazon asked for Khan’s recusal from probes into the company, pointing to criticism in her 2017 scholarly paper as a Yale law student, “Amazon’s Antitrust Paradox.”
