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Home » Global Trade & Economics » FTC, States Accuse Amazon of Illegally Stifling Competition

FTC, States Accuse Amazon of Illegally Stifling Competition

AMAZON TRUCK ON HIGHWAY

Photo: iStock.com/Sundry Photography

September 27, 2023
SupplyChainBrain

The U.S. Federal Trade Commission (FTC) and 17 states accused Amazon on September 26 of illegally protecting a monopoly in large areas of online retail by stifling rival merchants and favoring its own services. The New York Times reports this is the government’s most significant challenge to the power of the e-commerce giant, and could alter the way Americans shop online.

The FTC and state attorneys general from New York and other states joined in a lawsuit that alleges Amazon had stopped merchants on its platform from offering lower prices elsewhere and forced them to ship products with its logistics service if they wanted to be offered as part of its Prime subscription bundle. Those practices led to higher prices and a worse shopping experience for consumers, the agency and states said.

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said Lina Khan, the chair of the F.T.C.

Amazon has become notorious for the breadth of products it sells online, as well as the speed with which it delivers them. It has set the working conditions for more than one million warehouse workers, and pushed the U.S. Postal Service to deliver on Sundays.

The new lawsuit pits Amazon directly against Khan, who published a paper while still a Yale law student, arguing that U.S. antitrust laws had failed to adequately stop Amazon from amassing power over its customers, competitors and suppliers. The paper helped kick off a debate about whether antitrust laws were sufficient to limit the power of tech giants.

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