The US Federal Trade Commission (FTC) and 17 state attorneys general have filed a lawsuit against Amazon, alleging that the company has abused its monopoly power to harm consumers and sellers — following a July report that a lawsuit could be materialized soon.
“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” FTC’s Lina Khan said in a statement.
According to the complaint, Amazon’s actions prevent its rivals and sellers from lowering prices, which leads to higher prices for consumers. The e-commerce giant also also lowers the quality of its products and services, overcharges sellers, and stifles innovation.
Amazon is using its power to make it harder for its rivals to compete and for consumers to get good deals, both on its own website and on other websites that sell its products, according to the FTC and the states.
These tactics allegedly include punishing sellers who offer lower prices elsewhere, requiring sellers to use Amazon’s fulfillment service in order to be eligible for Prime, charging high fees to sellers, and biasing its search results to favor its own products.
“Amazon’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers,” the suit reads.