The Federal Trade Commission on Tuesday, took action against online shopping giant Amazon, charging it with illegally restricting competition as it forged its way to become a ubiquitous retail presence and one of the most valuable companies in the world.
The FTC was joined in the case by the attorneys’ general of 17 states. They claim that Amazon uses a “set of interlocking anticompetitive and unfair strategies” to preserve its monopoly.
Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin are the states that have endorsed the FTC’s move.
“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,” FTC Chair Lina M. Khan said.
Amazon in response debunked the allegations of market dominance through the company’s general counsel.
“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,” Amazon 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.”
The FTC and its state allies claimed that Amazon’s extensive online storefront for customers and its marketplace for sellers both violate antitrust law. Among the anti-competitive practises mentioned by the FTC in the case are Amazon’s practise of penalising sellers who provide lower prices away from Amazon and its policy of aggressively pushing vendors towards acquiring Prime status for their items.
