Amazon antitrust overview:
- Who: The Federal Trade Commission and 17 state attorneys general filed a lawsuit against Amazon.com.
- Why: Amazon is a monopoly that limits online competition as the company takes seller fees of up to half of the revenue from every seller, the Amazon lawsuit said.
- Where: The Amazon antitrust lawsuit was filed in federal court in Washington.
Amazon is facing a lawsuit from the Federal Trade Commission and 17 state attorneys general claiming the company has created an unfair monopoly that hurts consumers and violates federal antitrust laws.
Amazon is also degrading its customers’ experience on the site by serving them pay-for-play advertised products rather than products that might be useful for them, the Amazon antitrust lawsuit says.
“This practice, too, harms both sellers and shoppers alike,” the FTC Amazon lawsuit says. “Most sellers must now pay for advertising to reach Amazon’s massive base of online shoppers, while shoppers consequently face less relevant search results and are steered toward more expensive products.”
Amazon raising prices and lowering the value of services would normally create an opening for competitors If there were a competitive marketplace, but since Amazon controls all aspects of the marketplace it can hurt both consumers and sellers without having an impact on its increased profits, the FTC Amazon lawsuit claims.
Amazon allegedly monitors lower prices elsewhere, then punishes selling, lawsuit alleges
Amazon allegedly uses its control of the order fulfillment process to prevent others from meaningfully competing with Amazon.
Amazon has more sales than the next 15 online retail shopping firms combined, the Amazon antitrust lawsuit says.
“Amazon deploys a sophisticated surveillance network of web crawlers that constantly monitor the internet, searching for discounts that might threaten Amazon’s empire,” the FTC alleges. “When Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same product on Amazon, Amazon punishes that seller. It does so to prevent rivals from gaining business by offering shoppers or sellers lower prices.”
Earlier this year, a federal judge trimmed a class action alleging Amazon restricts third-party sellers but denied the company’s motion to dismiss the entire case, preserving most of the plaintiffs’ claims of third-party restrictions that allegedly cost shoppers billions.
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