US Federal Trade Commission Sues Amazon for Monopoly

On Tuesday, the U.S. Federal Trade Commission (FTC) and 17 state attorneys general sued Amazon alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.

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The FTC and its state partners said 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 complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.

By stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance, it noted.

"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.

"We're bringing this case because Amazon's illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers," said John Newman, deputy director of the FTC's Bureau of Competition. "Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."

The FTC and states allege Amazon's anticompetitive conduct occurs in two markets - the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.

Amazon pushed back against the FTC's allegations. The company's General Counsel David Zapolsky argued that the lawsuit filed by the FTC is wrong on the facts and the law, and Amazon is "look forward to making that case in court."

"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," he said.

Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin joined the FTC's lawsuit.