The U.S. Federal Trade Commission (FTC) and 17 states have filed a lawsuit against Amazon, alleging the company unlawfully upholds an online monopoly, according to an FTC release.
Lina Khan, FTC Chair, emphasized that Amazon uses coercive tactics to maintain its dominant position.
The FTC has multiple ongoing probes against Amazon, focused on areas like data privacy.
According to the FTC, the issue isn’t Amazon’s size. Instead, it’s about tactics aimed at stifling competitors and blocking alternatives.
For example, the agency says Amazon discourages sellers from undercutting its prices.
Moreover, they allege that Amazon ties its Prime service to its own costly delivery services.
Lina Khan accuses Amazon of exploiting its market power. She says it harms both consumers and small businesses.
In response, David Zapolsky, Amazon Vice President, asserts that the FTC has strayed from its mission.
He adds that the lawsuit is both factually and legally flawed.
Amazon counters by saying it has boosted competition and retail innovation. It claims to offer better prices, quicker deliveries, and more choices.
Also, it states that it provides valuable opportunities for numerous businesses.
Since Joe Biden became President, the FTC has been active against tech giants. Relations between Amazon and the FTC are tense.
Khan, who assumed FTC leadership in 2021, had criticized U.S. laws as inadequate in a 2017 paper.
Last June, Amazon questioned Khan’s impartiality but the FTC continued its actions.
Background
In recent history, big tech firms have been under increasing scrutiny. Specifically, the FTC has been keen on reining in monopolistic behaviors.
Amazon is not the first; companies like Facebook and Google have also faced similar lawsuits. Since Biden’s presidency began, tech regulation seems to be a priority.
Khan’s 2017 paper suggested that current laws were insufficient to tackle big tech monopolies.
Fast forward to today, she’s in a position to effect change.
Tensions between the FTC and Amazon spiked last year when the agency sued Amazon over its Prime service.
The ongoing investigations by the FTC could set a new standard for tech regulation, shaping the future of e-commerce and data privacy.