FTC lawsuit against Amazon

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The Federal Trade Commission (FTC) and 17 state attorneys general have filed a lawsuit against Amazon.com, Inc., alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The lawsuit was filed on September 26, 2023. The FTC and its state partners argue that Amazon's actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon. The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging. The FTC and states allege Amazon's anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. These tactics include anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. Amazon is also accused of conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. The FTC, along with its state partners, are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition. The states that joined the Commission’s lawsuit include Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin. In response to the lawsuit, Amazon has argued that the FTC's complaint fundamentally misunderstands retail and that if the FTC were successful, it would result in practices that harm consumers and businesses, such as higher prices, slower or less reliable Prime shipping, and making Prime more expensive and less convenient. This lawsuit follows another action taken by the FTC against Amazon in June 2023, where the FTC charged that Amazon had knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime. The FTC alleged that Amazon used manipulative, coercive, or deceptive user-interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions and complicated the cancellation process for Prime subscribers who sought to end their membership.
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