FTC and 17 US states are suing Amazon for anti-competitive behavior

The American market regulator FTC, together with seventeen American states, has sued Amazon. The FTC and the states believe that the tech giant is exhibiting anti-competitive behavior with its online store. The parties want Amazon to stop this.

“In our complaint, we explain how Amazon uses multiple punitive and coercive practices to unlawfully maintain its monopoly position,” says FTC Chairman Lina M. Khan. One example is that, according to the FTC, Amazon penalizes sellers with lower rankings in search results if they sell their products elsewhere for a lower price.

Another example is that sellers’ products would only be covered by Prime membership if those sellers used Amazon’s “expensive” fulfillment service. With Amazon Prime, consumers receive free delivery on Prime products; According to the FTC, this service is therefore de facto mandatory for sellers who want to sell on Amazon. But because they are in practice obliged to use Amazon’s relatively expensive order processing service, they would be unnecessarily incurring costs, according to the FTC.

The FTC and the states claim that Amazon’s behavior makes it impossible for competitors to gain a foothold, while forcing companies and consumers to pay more than necessary. ‘Many’ Amazon sellers would pay almost fifty percent of their total turnover to Amazon, the FTC says.

With the complaint, the FTC and the states want the federal court to prohibit Amazon from engaging in this anti-competitive behavior. The states of Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin are participating in the lawsuit.

Amazon says in response that with this complaint, the FTC “has made clear that its focus has radically deviated from its mission to protect consumers and competition.” The tech giant claims that the controversial practices have actually promoted competition and innovation, with more choice, lower prices and faster delivery times for consumers. The complaint would therefore be wrong on the facts and the law, Amazon said.