In a significant development on Tuesday, the Federal Trade Commission (FTC) and 17 state attorney generals came together to levy serious accusations against tech giant Amazon.
The allegations revolve around the company’s unlawful use of its monopoly power, with the authorities claiming these actions have had detrimental effects on prices, quality, and innovation for both consumers and businesses.
1. Today @FTC and 17 state AGs filed a lawsuit detailing how Amazon uses punitive & coercive tactics to unlawfully maintain its monopolies. Amazon is exploiting its monopoly power to enrich itself while raising prices & degrading service for its customers.https://t.co/7NiPGxx2CU
— Lina Khan (@linakhanFTC) September 26, 2023
The states that joined forces with the FTC in this 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.
FTC Chair Lina Khan minced no words, stating firmly, “Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies.”
Khan continued, “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.”
Additionally, the lawsuit claims Amazon, as the world’s largest online retailer, is operating without meaningful competition in two crucial markets, a situation that enables the company to engage in what authorities are calling “monopolistic practices.” However, Amazon swiftly responded with a counterstatement after the lawsuit was unveiled.
The company vehemently refuted the allegations, characterizing the legal action as misguided and asserting that the FTC had lost sight of its original mission. “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” Amazon argued.
This latest announcement follows the separate legal action that was taken against Amazon by the FTC earlier this year. In June, the e-commerce behemoth faced allegations of employing deceptive tactics to persuade millions of customers to enroll in its Prime subscription service.
The legal battle between Amazon and the FTC is expected to be closely watched as it unfolds, as it has the potential to disrupt and reinvent the e-commerce industry — completely changing how business is conducted on a global scale.