Amazon Faces Landmark Monopoly Lawsuit by FTC, Reports Reuters

By Diane Bartz

WASHINGTON – The U.S. Federal Trade Commission (FTC) has initiated an antitrust lawsuit against Amazon, marking a significant step in an ongoing effort to address perceived monopolistic practices in the tech industry. The FTC’s complaint, filed in federal court in Seattle, calls for the court to consider compelling Amazon to divest certain assets as it responds to growing concerns over the company’s dominance.

Amazon, which was founded in a garage in 1994 and is now valued at approximately $1.3 trillion, is accused of undermining competition by preventing sellers on its platform from offering lower prices elsewhere. The FTC claims that the company compels sellers to utilize its warehouses and delivery services, leading to higher costs for both consumers and sellers.

The FTC’s assertion is that Amazon operates as a monopoly, quoting a seller who stated, "We have nowhere else to go and Amazon knows it." This lawsuit follows years of escalating complaints regarding the monopolistic behavior of Amazon and other major tech firms, which have been accused of establishing themselves as gatekeepers in the online marketplace.

Efforts to regulate Big Tech have garnered bipartisan support, with both Democrats and Republicans acknowledging the need for action. The case is supported by 17 state attorneys general and follows extensive investigations into the practices of other tech giants, including Google and Facebook.

In its allegations, the FTC has called for a permanent injunction to halt Amazon’s purportedly unlawful conduct, stating that without intervention, the company will continue its practices that stifle competition. The lawsuit seeks equitable relief, which could involve structural changes to Amazon’s business.

FTC Chair Lina Khan, known for her critical views on Amazon’s market behavior, was asked about the potential for breaking up the company but maintained that the current focus is on proving liability.

In response, Amazon has vigorously disputed the FTC’s claims, asserting that its practices enhance competition and benefit consumers with greater selection, lower prices, and quicker delivery. Amazon’s general counsel, David Zapolsky, highlighted that the platform supports around 500,000 independent sellers.

Following the announcement of the lawsuit, Amazon’s shares fell, although some investors speculated that there could be long-term benefits regardless of the lawsuit’s outcome.

The FTC’s complaint also includes allegations that Amazon penalizes sellers who offer lower prices elsewhere by making it harder for consumers to find those sellers on its platform. Additionally, there are claims that Amazon prioritizes its products over those of competitors.

The case has been assigned to Judge John Coughenour, who has served on the bench since being nominated in 1981. Khan remarked that Amazon’s tactics have hindered potential competitors from challenging its market position.

Critics of Amazon, including advocates for fair competition, welcomed the lawsuit, warning that the company’s concentration of power poses a threat to market integrity and democratic governance.

Throughout the previous administration, the Justice Department and FTC launched investigations against major tech firms, resulting in multiple lawsuits against companies like Google and Facebook. The current administration continues these efforts to enforce antitrust laws in the tech sector.