Why is Amazon being sued by the FTC? Online retail monopoly lawsuit explored

American E-commerce company Amazon has been sued by the Federal Trade Commission and 17 states over the allegations that the corporation has abused its position in the marketplace, overcharged sellers, and stifled fair competition. The case, filed in federal court in Washington on September 26, is the outcome of a years-long probe into the company's operations and one of the most major legal challenges taken against it in the company's almost 30-year existence.

The Federal Trade Commission, together with the other states in the complaint, argues that the E-commerce company is in violation of both federal and state antitrust laws. The plaintiffs are seeking a permanent injunction from the court, stating that it would prevent the Seattle-based company from participating in its illicit conduct and reduce its "monopolistic control" in order to reinstate a competitive environment.

The lawsuit accuses the business of engaging in anti-competitive tactics by enacting policies that discourage sellers from providing cheaper pricing for items on non-Amazon sites, a claim that mirrors charges made in a separate case launched by the state of California in 2022. The case read:

"We have nowhere else to go and Amazon knows it."

Aside from the FTC, the states involved in the case are Delaware, Maryland, Minnesota, New Hampshire, Nevada, Oklahoma, Pennsylvania, Wisconsin, Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island, Michigan, Oregon and New Mexico.

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Amazon retaliated stating the FTC lawsuit won't bode well for customers

As per news outlet Reuters, following years of allegations that Amazon and other computer firms misused their dominant positions in search, social networking, and online shopping in order to become gatekeepers on the most lucrative portions of the internet, the recent case had been anticipated and was not a surprise.

One of the few issues that Republicans and Democrats have agreed upon is the necessity for action against Big Tech, and the FTC director has expressed specific alarm about the E-commerce company's influence on the market.

According to the FTC, it is seeking that the court provide a permanent injunction compelling the E-commerce company, which is headquartered in Seattle, to cease its unlawful activities. The complaint read:

"Left unchecked, Amazon will continue its illegal course of conduct to maintain its monopoly power. [The FTC requested] to put an end to Amazon's illegal course of conduct, pry loose Amazon's monopolistic control, deny the company the fruits of its unlawful practices, and restore the lost promise of competition."

According to the E-commerce company, however, the FTC case was misguided and would harm customers by resulting in increased costs and delayed delivery. In a statement, the company's general counsel, David Zapolsky, said:

"The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for its customers and greater opportunity for the many businesses that sell in the company's store."

The federal case follows earlier efforts filed by the FTC against the E-commerce company in recent months. The agency sued the firm in June 2023, saying that it used misleading techniques to enroll customers in Prime and made it difficult for them to terminate their memberships. The company denies the accusations.