The Federal Trade Commission and the attorneys general from 17 states have sued Amazon over allegations that it abuses its dominant position in the e-commerce marketplace to inflate prices, overcharge sellers, and stifle its competition, the Associated Press reported.
In the lawsuit filed in federal court in Washington state last Tuesday, the plaintiffs allege that the e-commerce giant is violating state and federal antitrust laws and are asking the court to impose a permanent injunction prohibiting Amazon from continuing its unlawful practices while loosening the company’s “monopolistic control to restore competition.”
The lawsuit, which follows a yearslong investigation into Amazon’s businesses, is one of the most significant legal challenges to the company since its founding nearly 30 years ago.
The plaintiffs accuse Amazon of using anti-competitive practices to discourage sellers from offering lower prices on products at non-Amazon sites, an argument similar to those in a separate lawsuit filed against the company in California last year.
Amazon is accused of burying lower-price listings offered on other sites while charging sellers high fees and forcing merchants to increase prices both on Amazon’s site, as well as other e-commerce sites to keep product prices competitive on Amazon.
In a statement announcing the lawsuit, FTC Chairman Lina Khan said the lawsuit details how the e-commerce behemoth exploits its “monopoly power to enrich itself” while increasing prices for Americans who shop on its platform and “degrading services” for the businesses that depend on Amazon to reach their customers.
Amazon is disputing the claims, arguing that the FTC has departed from its role of protecting competition and consumers and is “wrong on the facts and the law.”
In a statement last week, Amazon General Counsel David Zapolsky warned that if the FTC is successful in its lawsuit, there would be fewer products, slower deliveries, higher prices, and “reduced options for small businesses,” all of which are the “opposite of what antitrust law is designed to do.”