FTC And States Sue Amazon For Alleged Monopoly Abuses

Amazon, which initially launched as an online bookstore in 1995, is now the third-largest company in the world by revenue and is facing a serious lawsuit. The Federal Trade Commission (FTC) and 17 state attorneys general have filed an antitrust lawsuit against the dominating E-commerce company.

On Tuesday, the FTC and the 17 state attorneys general accused Amazon of illegally maintaining its monopoly power to “inflate prices, degrade quality, and stifle innovation for consumers and business.” The lawsuit also alleges that Amazon operates without competition in two markets, allowing the company to conduct “monopolistic practices.”

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

FTC Chair Lina Khan said, “Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies.” Khan also touched on Amazon hiking their prices while its service decays, leaving the customers who depend on the platform concerned.

However, Amazon released a counterstatement after the suit was announced, calling the legal action wrong and accusing the FTC of losing focus of its original mission. Amazon said the “FTC’s focus has radically departed from its mission of protecting consumers and competition.”

“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 announcement follows a separate legal action taken against Amazon by the FTC earlier this year. In June, the E-commerce company was accused of using deceitful tactics to trick millions of customers into enrolling in its Prime subscription service while making it excessively difficult to cancel.

The antitrust lawsuit filed against Amazon by the Federal Trade Commission and 17 state attorneys general marks a significant moment in the ongoing debate over the tech giant’s market dominance. The outcome of this lawsuit will likely have far-reaching consequences for Amazon and the wider industry it dominates.

Amazon’s strong defense, claiming that its actions promote competition and benefit consumers, paves the way for a complex legal battle. This battle could reshape the e-commerce landscape while establishing new limits of monopolistic conduct in online commerce.