Amazon is facing legal challenges as US regulators have filed a lawsuit against the company, accusing it of illegally maintaining monopoly power. The Federal Trade Commission (FTC) alleges that Amazon employs “a set of interlocking anticompetitive and unfair strategies” to elevate prices and hinder competition.
Responding to the allegations, Amazon has defended itself, stating that the lawsuit is “wrong on the facts and law,” and the company is prepared to present its case in court. This lawsuit marks another instance of a tech giant being pursued by US regulators.
Lina Khan, the head of the FTC, has been scrutinizing Amazon for several years. In 2017, she published a significant academic article, suggesting that Amazon had evaded anti-competition scrutiny and was marching towards monopoly. Her appointment as FTC Chair in 2021 led to anticipations of such a case, seen as a vital test of her leadership.
The increasing influence of a few tech giants has prompted some US politicians to advocate for measures promoting more competition in various online sectors, including search, retail, and social media. However, the FTC, under Khan’s leadership, has faced challenges in curbing Big Tech’s expansion, with failed attempts to prevent acquisitions by Meta and Microsoft.
The pressure is mounting on Khan to secure a victory in a high-profile case, and the FTC, along with 17 state attorneys, is hopeful about this lawsuit against Amazon. They argue that Amazon, as a “monopolist,” prevents competitors and sellers from reducing prices and allege that the company’s actions adversely affect shoppers, overcharge sellers, inhibit innovation, and obstruct fair competition.
Amazon counters that a successful lawsuit by the FTC would result in limited product choices, increased prices, and delayed deliveries for consumers. A crucial aspect of the case revolves around consumers suffering financial losses due to the alleged monopoly. Demonstrating financial harm to consumers is a requisite under US anti-competition laws, which poses a challenge in cases involving Big Tech companies that offer many free services.
This lawsuit against Amazon comes as Google is also embroiled in a legal battle with the US government over accusations of maintaining an advertising technology monopoly.