The Federal Trade Commission and 17 state attorneys general have filed a lawsuit against Amazon.com. The lawsuit claims that the e-commerce giant has used its power to raise prices, reduce quality, and prevent innovation for consumers and businesses..
A complaint of 172 pages has been filed against Amazon (NASDAQ: AMZN) in the United States District Court for the Western District of Washington. The complaint claims the company is hindering the growth of competitors and stopping new ones from emerging.
The Federal Trade Commission has filed a lawsuit against Amazon following a four-year investigation. The investigation found that the Seattle-based company engaged in anticompetitive behavior in different markets, including online shopping and online marketplace services.
FTC Accuses Amazon of Unlawful Monopolistic Practices
FTC Chair Lina M. Khan stated on Tuesday that our complaint details Amazon’s use of punitive and coercive tactics to unlawfully maintain its monopolies.
The complaint alleges that Amazon is using its monopoly power to benefit itself, resulting in increased prices and decreased service for American families who use its platform and businesses that depend on Amazon to reach customers.
According to the complaint, Amazon is being sued by the FTC because Amazon sellers find it much costlier to offer their products on other platforms while using Amazon’s logistics platform, Fulfillment by Amazon, as Amazon mandates the use of this platform for Prime-eligible products.
The FTC also claims that Amazon “algorithmically punishes sellers” if it finds that they are selling the same or similar items elsewhere at a cheaper price.
The FTC stated that Amazon can push discounting sellers so far down in its search results that they essentially become invisible.
Amazon responds to the FTC suit
Amazon has issued a statement refuting the FTC’s claims.
David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, stated that today’s suit indicates a significant departure from the FTC’s mission of protecting consumers and competition. The practices being challenged by the FTC have indeed played a role in promoting competition and innovation within the retail industry. As a result, Amazon customers have benefited from a wider range of choices, more affordable prices, and faster delivery. Additionally, these practices have created more opportunities for businesses selling on Amazon’s platform.
Zapolsky Responds to FTC Lawsuit
Zapolsky stated that the outcome if the FTC’s desires are met, would lead to a decrease in product options, an increase in prices, delayed deliveries for consumers, and limited choices for small businesses. He emphasized that this would go against the intended purpose of antitrust law. The user states that the lawsuit filed by the FTC today is incorrect in terms of both the facts and the law. They express their anticipation of presenting their case in court.
According to Zapolsky, the firm has helped generate 1.5 million employment via its network of over 500,000 small enterprises selling items in the United States.
According to him, more than 60% of Amazon’s sales come from independent sellers, most of whom are small and medium-sized enterprises (SMEs), ever since the firm expanded its business model about 20 years ago to include third-party sellers.
Zapolsky Defends Amazon’s Practices Amid Antitrust Lawsuit Filed by FTC and 17 States
Despite the FTC’s claims, Zapolsky stressed that his company does not coerce vendors into using its supplementary offerings. “Sellers have options, and many are successful in our marketplace despite not using our advertising or logistics services.”
Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin are among the states involved in the litigation.
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