The US Federal Trade Commission (FTC) and 17 states have filed a lawsuit against Amazon, alleging that the company illegally uses its monopoly power to charge consumers higher prices, hinder competitors, and exploit sellers on its marketplace. The landmark lawsuit claims that Amazon raises fees for sellers on its platform, taking almost half of their earnings. The FTC also accuses the company of penalizing sellers who heavily discount their products by making them less visible in search results and pushing merchants to use Amazon’s expensive logistics network. This lawsuit marks a significant test for FTC Chair Lina Khan’s more aggressive approach to regulating Big Tech.
FTC Chair Lina Khan, who rose to prominence for advocating the breakup of Amazon in a 2017 academic paper, stated that the complaint against Amazon demonstrates how the company has used punitive and coercive tactics to maintain its monopolies. However, Amazon’s Senior Vice President of Global Public Policy and General Counsel, David Zapolsky, criticized the lawsuit, stating that the FTC’s focus has deviated from its mission of protecting consumers and competition. Amazon intends to defend its position in court. The FTC is seeking a permanent injunction to prevent Amazon from engaging in the alleged illegal conduct.
Under the Biden administration, antitrust officials such as Lina Khan and Jonathan Kanter have ramped up enforcement efforts to address corporate power in the US. Jonathan Kanter has sued Google over its dominance in digital advertising, while the FTC is also involved in legal battles against companies like Meta and Microsoft. With this lawsuit, the FTC is taking a strong stance against Amazon’s market practices and asserting its authority to regulate big tech companies.
