Amazon’s headquarters in Seattle is abuzz over last week’s lawsuit. The suit was brought with the assistance of 17 Attorneys General and the Federal Trade Commission. (Source: WikiMedia)

17 States Join in FTC Lawsuit Charging Amazon with Unfair Business Practices

When President Biden appointed Lina Khan to the Federal Trade Commission Chair, there might have been a shudder going through some folks at Amazon. Khan has long been the voice claiming Amazon’s business practices are unfair. Now a long-awaited report and a lawsuit have been brought against Amazon and were made public this week.

Here is the breakdown of the report issued on Tuesday last week.

The Federal Trade Commission and 17 state attorneys general filed suit against Amazon alleging that the Seattle-based tech giant is a monopoly that “abuses its power.” The states involved 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 complaint alleges that Amazon uses ‘anti-competitive and unfair strategies’ that ‘stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing’ against the e-commerce giant.

The lawsuit, filed in U.S. District Court for the Western District of Washington, is the first major one for FTC Chair Lina Khan.

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” 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.”

Amazon Responds

Amazon was quick to issue a statement about the suit and dispute accusations of being a monopoly.

David Zapolsky, senior vice president, of Amazon Global Public Policy & General Counsel said this:

“Today’s suit makes clear 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. 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. 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.”

Other Tech Giants Reviewed

Amazon was found to be treating third-party suppliers unfairly back in 2020. This suit looks closer at how Amazon continues to dominate everything it touches. All of the major platforms are being looked at by several government committees.

That 450-page report resulted from a 16-month investigation into Facebook, Google, Amazon, and Apple as the operators of major online markets, and proposed widespread reforms for U.S. tech giants, including “structural separations to prohibit platforms from operating in lines of business that depend on or interoperate with the platform.”

It really isn’t hard to see why the FTC is concerned over these platforms. The fact that just a few control a huge percentage of the tech market makes many into monopolies that control e-commerce in the United States.