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  • Writer's pictureJoel Lewitt

FTC slaps Amazon with new antitrust lawsuit

In a major legal action, the Federal Trade Commission (FTC) has taken a bold step against e-commerce giant Amazon, accusing the company of engaging in unlawful practices that stifle competition and contribute to its status as a dominant global retail force.

Joining the FTC in this lawsuit are attorneys general from 17 states, collectively asserting that Amazon employs a range of "interlocking anticompetitive and unfair strategies" to maintain a monopoly in the market. These states 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 alleges that Amazon is exploiting its monopoly power to enhance its own profits while simultaneously increasing prices and diminishing service quality for the millions of American families who rely on its platform for shopping, as well as for the countless businesses that depend on Amazon to reach their customers. FTC Chair Lina M. Khan stated, "Today's lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition."

Amazon, not surprisingly, has vehemently disputed the FTC's allegations, which could pose a significant threat to the company's dominance in the market. Amazon General Counsel David Zapolsky argued that if the FTC prevails, it could lead to fewer product choices, higher prices, slower deliveries, and fewer options for small businesses—outcomes that run counter to the intended purpose of antitrust laws.

The FTC and the state attorneys general have identified two key areas where Amazon allegedly violated antitrust laws: its expansive online shopping platform for consumers and its seller-side marketplace. Among the anti-competitive practices cited in the lawsuit are Amazon's penalization of sellers offering lower prices outside of its platform and its aggressive efforts to encourage sellers to obtain Prime status for their products.

Deputy Director of the FTC Bureau of Competition, John Newman, underscored the significance of this legal action, stating, "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. Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."

This legal battle between the FTC, supported by numerous states, and Amazon will undoubtedly have far-reaching implications for the future of competition in the e-commerce industry, with the outcome likely to reshape the landscape of online retail.

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