Sep 26, 2023 - Technology

Amazon illegally maintains a monopoly, major new federal suit charges

Illustration of a hand reaching for Amazon's logo.

Illustration: Shoshana Gordon/Axios

The Federal Trade Commission is suing Amazon over alleged anticompetitive business practices in a long-awaited lawsuit against the massive online retailer and platform.

Why it matters: A win for the FTC, led by Democrat Lina Khan, could fundamentally alter the way Amazon's business operates.

Driving the news: The FTC voted 3-0 to proceed with the Amazon suit, per an announcement Tuesday.

  • Rumors of a big Amazon FTC case have been flying for years, starting under the Trump administration, and the agency started working on its complaint in earnest earlier this year.
  • 17 state attorneys general also signed onto the complaint.

What they're saying: Amazon "is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power," the FTC said in a statement.

  • "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 agency says.

The other side: "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," David Zapolsky, Amazon senior vice president of global public policy and general counsel, said in a statement.

  • "The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon's store," Zapolsky said.

Between the lines: Khan has been eyeing Amazon since she was a law student and won attention for a paper on how antitrust law should be applied to the online retail giant.

The big picture: Under Khan, the FTC has suffered a string of losses in court attempting to bring down Big Tech companies, including a bid to block Microsoft's acquisition of Activision Blizzard and an attempt to keep Meta from buying virtual reality fitness startup Within.

The FTC also sued Amazon in June for allegedly tricking people into Prime memberships and making it difficult to cancel, Axios previously reported, and added names of executives to the suit last week. Amazon said the suit was wrong on "both the facts and the law."

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