The US government has filed a lawsuit against Amazon, alleging that the internet giant unlawfully maintains a monopoly.
According to the Federal Trade Commission (FTC), Amazon engages in “a set of interlocking anticompetitive and unfair strategies” to increase prices and stifle competition.
Amazon has stated that the lawsuit is “incorrect based on the facts and the law, and we look forward to defending ourselves in court.”
It is the most recent technology titan to face legal action by US authorities.
Lina Khan, the head of the FTC, has had Amazon in her sights for years.
In 2017, Ms. Khan, who was only 29 at the time, published a significant academic article arguing that the online retailer had evaded antitrust scrutiny.
“With its missionary zeal for consumers, Amazon has marched towards a monopoly,” she stated at the time.
Since her surprise appointment as FTC Chair in 2021, this case has been widely expected – and viewed as a crucial measure of her leadership.
Some US legislators have called for action to increase competition in online search, retail, and social media in response to the dominance of a handful of large tech companies.
However, under Ms. Khan, the FTC’s robust rhetoric against Big Tech has yielded few results.
It failed in its endeavor to prevent Meta from acquiring VR company Within in February.
And in July, it failed in its attempt to prevent Microsoft from acquiring the Call of Duty developer.
Ms. Khan is under pressure to make at least one prominent complaint stick, and the FTC has high aspirations for this case.
Along with 17 state attorneys, the agency asserts that Amazon is a “monopolist” that prevents competitors and sellers from lowering prices.
In addition, the regulator claimed Amazon’s actions “degrade quality for consumers, overcharge sellers, stifle innovation, and prevent rivals from competing fairly with Amazon.”
However, Amazon claims that if the “misguided” FTC lawsuit is successful, consumers will have fewer options, pay higher prices, and experience delayed delivery times.
The key part of the case entails consumers losing money – getting worse deals – because of the alleged monopoly.
US anti-competition law is complex, but in general, prosecutors must demonstrate that a company’s actions have caused financial harm to consumers.
As many of Big Tech’s services, such as Google’s search engine and Meta’s Instagram, are free, proving this is not always straightforward.
Google and the United States government began a court battle earlier this month, with the government accusing Google of monopolizing advertising technology.
