[Investopedia]
0 Facebook Twitter Reddit
On Tuesday, the Federal Trade Commission sued Amazon, alleging that the retailer is illegally abusing its monopoly power by preventing others by competing fairly with the tech giant.
The FTC, joined by 17 government officials, complains that Amazon uses “a set of interconnected anticompetitive and unfair strategies to unlawfully maintain its monopoly power.” The retailer “is committed to exceptional behavior that hinders the growth of current competitors and the emergence of new competitors.”
Because Amazon stifles competition on price, product selection and quality and “prevents its current or future competitors from attracting a critical mass of buyers and sellers,” the retailer ensures that “no current or future competitor can threaten it domination.”
“Our complaint outlines how Amazon used a range of punitive and enforcement tactics to unlawfully maintain its monopolies,” said Lina M. Khan, Chairwoman of the Federal Trade Commission. “The complaint lays out detailed allegations, noting that Amazon is now using its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on on Amazon for your own purposes. achieve them.” Khan continues, insisting that the lawsuit “seeks to hold Amazon accountable for these monopolistic practices and restore the lost promise of free and fair competition.”
The complaint alleges that Amazon is disrupting competition in two markets: online marketplaces serving buyers and marketplace services purchased by sellers.
Tactics include “anti-discount measures” that discourage other retailers from offering lower prices than Amazon, which in turn keeps prices higher elsewhere on the Internet than in Amazon's own store. There is also a condition for a seller to be able to get “Prime” rights to their products for sellers who use Amazon's fulfillment service, which also makes it more expensive to offer products on other platforms.
The FTC and states are seeking a permanent injunction in federal court to prevent Amazon from “engaging in illegal conduct and wresting Amazon's monopolistic control to restore competition.”
