FTC Sues Amazon

The lawsuit seeks to restore competition from the alleged monopoly the company holds.

September 27, 2023

The Federal Trade Commission and 17 states filed a lawsuit against Amazon, alleging that the online retailer illegally wields monopoly power, keeping prices artificially high, locks sellers into its platform and harms its rivals, reports the Wall Street Journal.

The lawsuit was filed in Seattle federal court and, according to the Journal, has been anticipated for months. The newspaper had previously reported the FTC preparing an antitrust suit in February 2023.

In the suit, the FTC and the states alleged that Amazon violated antitrust laws by using anti-discounting measures that punished merchants who offered lower prices in other locations, reports the Journal. Additionally, the government said that in order for sellers to appear in Amazon Prime, sellers were to use Amazon’s logistics services. The complaint states that this “tying” illegally “restricts sellers’ choices.”

The Wall Street Journal also reported that the FTC alleges that sellers feel as though they must use Amazon’s services, such as advertising, in order to be successful on the platform. Between logistics, advertising and more, Khan said that “Amazon now takes one of every $2 that a seller makes.”

According to the Journal, David Zapolsky, Amazon’s general counsel and head of public policy, stated that “the lawsuit filed by the FTC is wrong on the facts and the law, and we look forward to making that case in court.”

Through the suit, the FTC is seeking a court order to prohibit Amazon “from engaging in its unlawful conduct” and “pry loose” the company’s monopoly to restore competition.

Amazon commands 38% of all online retail in the United States.

In a statement, Khan said, “This case is entirely pro business. We believe that this lawsuit, if we are successful, will actually restore the promise of free competition.”