FTC Says Firm Uses ‘Illegal Monopoly’ Practices To Inflate Prices, Cheapen Products And Stifle Innovation
September 26, 2023—The U.S. government came out swinging hard today against one of the world’s largest tech companies. In a lawsuit filed today, the Federal Trade Commission and 17 state attorney generals accuse Amazon.com ofusing illegal strategies to “inflate prices, degrade quality, and stifle innovation for consumers and businesses.”
Massive Lawsuit
It’s an extensive lawsuit in its scope of accusations of monopolistic power.
“With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach,” the FTC said in a release on Tuesday.
The 172-page lawsuit takes aim at the company’s practices, specifically accusing Amazon.com of the following antitrust violations:
- Monopolistic pricing on products;
- Burying competitors’ products priced lower in search results; and
- Limiting sellers’ ability to sell outside Amazon through the use of its Prime eligibility
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan.
Impact On Big Tech, Consumers And Sellers
Amazon is the world’s fourth-largest tech giant and sixth-largest company, according to its market value of $1.35 trillion. The lawsuit could impact consumers and sellers.
The states that joined the FTC in the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.
