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The Federal Trade Commission (FTC) sued Amazon this week, alleging that the retail giant used unfair and anticompetitive strategies to maintain its monopoly power.
The agency, which was joined in the lawsuit by 17 state attorneys general, says in its complaint that Amazon stops rivals and sellers from lowering prices, overcharges sellers, stifles innovation, and prevents rivals from competing against it.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina Khan said in a statement. “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. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”
Specifically, the FTC claims that Amazon’s “anticompetitive conduct” makes it impossible for competitors and raises prices for both shoppers and sellers who conduct business on its online marketplace. The lengthy complaint alleges, among many other things, that Amazon had anti-discounting measures that hurt sellers and biased its search results to prop up its own products over ones that Amazon “knows are of better quality.”
The states joining the FTC in the lawsuit include: Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.
The lawsuit seeks a permanent injunction against Amazon. In a statement, the retail giant said the FTC’s lawsuit was “wrong on the facts and the law” and that the company looked forward “to making that case in court.”
Why it matters
The lawsuit against Amazon feels like a head-to-head that was inevitable.
Khan, who was named chair of the agency by President Joe Biden in 2021, has been hailed by progressives for being an outspoken critic of big tech companies. In fact, shortly after being named chair, Amazon tried to have Khan recuse herself from investigations into Amazon.
More broadly speaking, there has been a larger sentiment in Washington and around the country about holding big tech giants accountable.
