17 States in The United States Have Joined Forces To Sue Amazon, And Amazon May Face The Fate Of Breaking Up

On Sept. 26, the Federal Trade Commission (FTC) and the attorneys general of 17 states filed an antitrust lawsuit against global e-commerce giant Amazon, accusing the company of using its monopoly power to raise prices, reduce the quality of shopping, and illegally exclude competitors, thereby undermining competition.

 

 

CNN reported that it was a landmark lawsuit that represented the harshest attack on Amazon by the US government to date.

 

“The US government and 17 states are suing Amazon in a landmark monopoly case reflecting years of allegations that the e-commerce giant abused its economic dominance and harmed fair competition.”

 

The 172-page complaint alleges that Amazon unfairly promoted its platform and services at the expense of third-party sellers who rely on the company's e-commerce market for distribution.

 

For example, according to FTC, Amazon undermines competition by requiring sellers on its platform to buy Amazon's internal logistics services in order to gain so-called "Prime" qualifications.

 

The lawsuit also alleges that Amazon forces sellers to list their products at the lowest prices anywhere on Amazon, rather than allowing sellers to sell their products at lower prices in a highly competitive market.

 

Because of Amazon's dominant position in e-commerce, sellers have no choice but to accept Amazon's terms, resulting in higher prices and a worse consumer experience, according to the Federal Trade Commission. Amazon also ranks higher than third-party products in market search results, according to the Federal Trade Commission.

 

It is reported that the 17 states involved in the case 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 lawsuit was filed in federal court in Seattle, where Amazon is headquartered. FTC has been planning a lawsuit against Amazon for a long time, and the agency has been preparing for it since at least the beginning of this year.

 

"Amazon is a monopoly and it uses its monopoly to make shoppers and sellers pay more for worse services," Lina Khan, chairman of FTC, said at a news conference on Tuesday. "The risk is high and the damage caused by the platform continues to occur. For every $2 the seller pays, he has to pay $1 to Amazon. "

 

FTC did not give details of possible remedies, but if FTC wins the lawsuit, it may ask a judge to restructure Amazon and possibly order the company to spin off its logistics and other businesses.

 

"If we succeed, competition will resume and people will benefit from lower prices and better quality," Khan said. 

 

In response to the allegations, David Zapolsky, Amazon's general counsel, said in a statement: "Today's lawsuit shows that FTC's focus deviates radically from its mission of protecting consumers and competition."

 

"Amazon's approach helps stimulate competition, innovation and choice throughout the retail industry," Zapolsky said. "It also believes that Amazon has pushed down prices, accelerated delivery, and helped small businesses sell their products. "

 

He went on to say that the lawsuit could not be seen from a factual or legal point of view, adding that it was expected to be proved in court.

 

The lawsuit against Amazon, which could take years to end, makes it the third technology giant after Google and Meta to be fully charged by the US government, CNN reported.