FTC and 17 States Sue Amazon

The FTC and 17 states are suing Amazon after more than a decade of complaints by regulators and consumer advocates that the company uses its commercial dominance to unfairly harm competition.

CNN reports that a 172-page complaint filed in the US District Court for the Western District of Washington alleges Amazon unfairly promotes its own platform and services in a way that harms third-party sellers who rely on Amazon’s e-commerce marketplace for distribution.

According to the FTC, Amazon harms competition in two fundamental respects: by requiring sellers to purchase Amazon’s in-house logistics services to secure “Prime” eligibility, a major benefit, by forcing sellers to list their products on Amazon at the lowest prices anywhere on the web, instead of allowing them to sell lower at competing marketplaces. The latter is the subject of a separate lawsuit filed by California’s attorney general in 2022.

“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Amazon’s senior vice president of global public policy and general counsel. Zapolsky said Amazon’s business strategy has spurred competition, innovation, and selection across the retail industry. He also claims that Amazon fosters lower prices, faster delivery, and helps small businesses make sales.

The complaint asks for a court order blocking Amazon from engaging in allegedly anti-competitive behavior. The FTC also refused to rule out seeking “structural relief,” meaning the breakup of Amazon, or for individual executives to be named in a separate antitrust case. FTC Chair Lina Khan said her agency is interested in any relief that can effectively stop Amazon’s allegedly anti-competitive behavior.