Skip to main content

Home  »  US business news   »   FTC sues Amazon over illegal online retail monopoly

FTC sues Amazon over illegal online retail monopoly

Amazon office building in Silicon Valley

The Federal Trade Commission and 17 states have taken legal action against Amazon over illegal monopoly.

The e-commerce giant is accused of artificially inflating prices, restricting sellers to its platform, and harming competitors. 

The lawsuit, filed in a Seattle federal court, underscores the Biden administration's assertive stance on antitrust enforcement.

Read More: FTC Sues Anesthesia Providers In Texas Over Market Monopoly

Lina Khan, the FTC's chair and a vocal Amazon critic, has encountered challenges in persuading courts to embrace her antitrust views. 

This lawsuit against Amazon marks a critical test for Khan and her agency.

The claimants say Amazon violated antitrust laws by implementing anti-discounting measures.

They claim the company penalized merchants for offering lower prices on other platforms. 

They also contend sellers on Amazon are compelled to use the company's logistics service to have their products featured on Amazon Prime.

Read More: Amazon Staff Could Lose Jobs If They Don’t Return To Office 

It limits choices for sellers and reduces product diversity available to Amazon's rivals.

The FTC also alleges sellers feel compelled to utilize Amazon's services, such as advertising, to thrive on the platform. 

This practice has led to Amazon capturing a significant portion of sellers' earnings, with the company taking one of every $2 a seller makes.

Amazon's general counsel, David Zapolsky, said: “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.

Read More: SpaceX Sues DOJ To Dismiss Discrimination Case

“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.”

The FTC seeks a court order to prohibit Amazon from continuing its alleged unlawful conduct and restore competition. 

Amazon has 38 percent share of all US online retailers

Amazon, founded in 1994 as an online bookseller, now has a 38 percent share of all US online retailers.

It’s a dominant force in cloud computing and digital advertising.

Looking to boost your online brand? Create your FREE business profile at WhatBiz? here.

The company's extensive reach gives it substantial leverage in negotiations with partners, including third-party sellers.

This legal action adds to the US government's challenges to three major technology companies. 

The Justice Department is pursuing a case against Google, alleging anticompetitive behavior in online searches. 

Additionally, the FTC is suing Meta, seeking divestment of WhatsApp and Instagram. 

A trial date for the Meta case is expected next year.

Follow us on YouTubeTwitterLinkedIn, and Facebook.

Most Read News