Amazon goes to court

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Amazon goes to court; Complaint by FTC and 17 US states protesting monopolistic policies

The complaint alleges that Amazon uses “unfair and anti-competitive strategies” to maintain its monopoly and undermine its competitors.

The US Federal Trade Commission (FTC) and 17 state attorneys general have sued Amazon, alleging that the online retail giant used “unfair and anti-competitive strategies” to maintain a monopoly and raise prices for online buyers and sellers.

According to published reports, the states and the FTC alleged in their complaint:

“Amazon violates the law not because it is big, but because it engages in monopolistic behavior that prevents the growth of existing competitors and the emergence of new ones. By suffocating competition on price, product selection, quality, and preventing existing or future competitors from attracting buyers and sellers, Amazon has ensured that no current or future competitor can threaten its dominance.

Amazon goes to court
Amazon goes to court

The complaint alleges that Amazon’s business practices affect online buyers and sellers, including:

  • Replacing your product search results with paid ads

     

  • Placing your products at the top of search results

     

  • Applying rates that force sellers to pay Amazon nearly 50% of their total revenue

     

  • Charging high fees from sellers to maintain Prime service

John Newman, deputy director of the FTC’s Office of Competition, explains:

“Amazon is a monopoly that uses its power to raise prices for American shoppers and charge huge fees to hundreds of thousands of online sellers.”

Amazon’s Response to FTC Complaint

Amazon's Response to FTC Complaint
Amazon’s Response to FTC Complaint

Amazon also published a long response to this complaint on its website and called it “misguided”. The online retail giant explains that if the lawsuit is successful, it will be forced to raise product prices, make shipping slower and less reliable, and charge Prime customers more.

In this post, Amazon General Counsel David Zapolsky explains:

“All businesses that sell in-store set their own prices, but to help increase sales and make our store more attractive to customers, we also invest in tools and training to help them offer competitive prices. “Just like any store owner doesn’t want to promote a bad deal to their customers, we don’t highlight or promote offers that aren’t competitively priced.”

States suing Amazon include Connecticut, Massachusetts, Michigan, New York, Oklahoma, and others.

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