FTC and 17 U.S. States Sues Amazon for Antitrust Violations

The U.S. Federal Trade Commission (FTC) today sued Amazon.com for illegally maintaining its monopoly power by harming competition and consumers. 17 U.S. states—Connecticut, Delaware, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin—joined the FTC in its lawsuit.

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

The allegations here are many, but they fall into two broad categories, both related to its e-commerce activities. First, that Amazon is a monopolist, and not just in one market, but two: online stores and online market services. And second, that Amazon illegally abuses both of those monopolies by its exclusionary, anti-discounting conduct, by coercing sellers to use its fulfillment service, and via a series of anticompetitive tactics that work together to amplify its overall exclusionary effect.

“Amazon is a monopolist,” the hefty 172-page complaint reads. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon’s online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.”

Amazon denied any wrongdoing.

“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” Amazon senior vice president David Zapolsky writes in his firm’s response. “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.”