US Trade Commission Accuses Amazon of Illegal Monopoly

‘Amazon uses a set of interlocking anticompetitive and unfair strategies to push up prices and stifle competition’

US Trade Commission Accuses Amazon of Illegal Monopoly

Amazon is being sued by US regulators, who claim that it is abusing its monopoly status.

Amazon is accused of using "a set of interlocking anticompetitive and unfair strategies" by the Federal Trade Commission (FTC) to raise prices and suppress competition.

Amazon said that the lawsuit was "wrong on the facts and the law, and we look forward to making that case in court".

Amazon has long been a target for Lina Khan, the head of the FTC.

A significant scholarly study alleging that the internet shop had dodged an anti-competition investigation was published in 2017 by Khan, who was only 29 at the time.

At the time, she declared, "Amazon has marched towards monopoly with its missionary zeal for consumers."

This lawsuit has been anticipated since her unexpected election as FTC Chair in 2021 and is seen as a vital test of her leadership.

Some US lawmakers have called for legislation that would encourage more competition in internet search, shopping, and social media as a result of the dominance of a small number of significant IT companies.

However, while using harsh language to criticize Big Tech, the FTC under Khan has not achieved much.

It failed in its attempt to prevent Meta from purchasing VR firm Within in February.

Additionally, it failed in its bid to stop Microsoft from closing the acquisition of the Call of Duty developer in July.

The FTC has great hopes for this case, and there is pressure on Ms. Khan to make at least one high-profile allegation stick.

The government contends that Amazon is a "monopolist" that prevents competitors and sellers from cutting prices, along with 17 state prosecutors.

Additionally, the regulator said that Amazon's practices "degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon."

Amazon, meanwhile, claims that if the "misguided" FTC action is successful, consumers will have fewer options, higher costs, and delayed delivery.

The main contention in this case is that, due to the purported monopoly, customers lost money and received poorer bargains.

Despite the complexity of US anti-competition law, prosecutors often need to demonstrate that businesses acted in a way that cost consumers money.

When it comes to Big Tech, where many of their services are free, like Google's search engine or Meta's Instagram, it isn't always an easy thing to show.

The US government has accused Google of possessing a monopoly in the field of advertising technology, and a legal dispute between the two parties started earlier this month.