Federal government sues Amazon in major antitrust case

September 27, 2023

Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.

Federal Trade Commission (FTC) Chair Lina Khan, who is leading the FTC and 17 states in suing Amazon. The e-commerce company is valued at more than $1 trillion, with some estimates showing it controls around 40% of the e-commerce market.

Federal Trade Commission (FTC): A federal agency responsible for protecting consumers from unfair or deceptive business practices, as well as unfair methods of competition – such as monopolies.

Why It Matters: Tuesday’s case against Amazon is the fourth FTC suit against the popular e-commerce retailer this year. Questions have been raised as to whether the FTC could seek a breakup of the company, though Khan has said, “At this stage, the focus is more on liability.” CNN reports, “The litigation could take years to play out.”

What To Know: The FTC and 17 states are suing Amazon for allegedly stifling competition and “exploiting its monopoly power to enrich itself while raising prices and degrading service” to both consumers and sellers who use the platform, Khan explained. Among the allegations, Amazon has been accused of “anti-competitive practices” and punishing sellers for offering lower prices on different platforms, which can ultimately lead to higher prices for consumers. The FTC and states are asking the court to help loosen Amazon’s “monopolistic control to restore competition.”

Amazon has denied allegations of stifling competition. David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, said: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.Read Amazon’s full response here.

Amazon sued by FTC and 17 states over allegations it inflates online prices and overcharges sellers

by Emily Hooker, based in Texas