ionigeria.com Nigerian Newspaper
U.S. regulators and 17 states sued Amazon on Tuesday in a pivotal case that could prove existential for the retail giant.
In the sweeping antitrust lawsuit, the Federal Trade Commission and a bipartisan group of state attorneys general paint Amazon as a monopolist that suffocates competitors and raises costs for both sellers and shoppers.
The FTC, tasked with protecting U.S. consumers and market competition, argues that Amazon punishes sellers for offering lower prices elsewhere on the internet and pressures them into paying for Amazon’s delivery network.
“Amazon is a monopolist and it is exploiting its monopolies in ways that leave shoppers and sellers paying more for worse service,” FTC Chair Lina Khan told reporters on Tuesday.
“In a competitive world, a monopoly hiking prices and degrading service would create an opening for rivals and potential rivals to … grow and compete,” she said. “But Amazon’s unlawful monopolistic strategy has closed off that possibility, and the public is paying dearly as a result.”
Amazon, in a statement, argued that the FTC’s lawsuit “radically departed” from the agency’s mission to protect consumers, going after business practices that, in fact, spurred competition and gave shoppers and sellers more and better options.
“If the FTC gets its way,” Amazon General Counsel David Zapolsky wrote in a post, “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.”
Broadly, Tuesday’s case escalates a long-running criticism of Amazon: It owns the online platform that many sellers use to reach shoppers, and it sells products on that very same platform. What’s more, it owns the shipping and delivery network that everyone on the platform is incentivized to use.
Around 60% of items purchased on Amazon are sold by third-party sellers, company executives have said. The FTC says Amazon’s fees are so high that sellers effectively keep only half of what they make on the platform.
The federal lawsuit did not immediately seek a breakup of the retail giant. Instead, the FTC and states are asking the court for a permanent injunction, although this could change down the road. The case, filed in federal court in Amazon’s hometown of Seattle, is expected to play out over several years.
