Online retail giant Amazon is under attack from President Joe Biden’s Federal Trade Commission (FTC) and 17 state attorneys general. Their charge? The company wields its considerable power to make itself more successful.
Specifically, the antitrust lawsuit filed Tuesday alleged Amazon engages in monopoly practices. The results include higher prices, lower quality, and a suppression of innovation for its customers and business clients.
For the record, the states enlisted in the lawsuit are almost entirely blue.
FTC Chair Lina Khan accused Amazon of using “a set of punitive and coercive tactics to unlawfully maintain its monopolies.” The complaint claimed that the company’s actions enriched itself “while raising prices and degrading service.”
Khan wrote a Yale Law Journal article in 2017 accusing Amazon of operating with a structure and practices that stifled competition. She alleged the company successfully avoided antitrust regulators while achieving its dominant position.
The Biden agency said the retailer functions without competition in multiple markets, contributing to its “monopolistic practices.”
Amazon stock falls as the US government sues the online retail giant in a landmark monopoly case https://t.co/kAwDsm5YrF
— Insider Business (@BusinessInsider) September 27, 2023
The world’s largest online retailer struck back in a statement after the FTC announcement. It blasted the legal action and said the agency lost sight of its purpose.
Amazon declared the legal action proves “the FTC’s focus has radically departed from its mission of protecting consumers and competition.” It said the very practices the government denounced are those that “spur competition and innovation.”
It asserted that company practices “produced greater selection, lower prices, and faster delivery speeds.”
Amazon also said that businesses that sell their wares in its store benefit greatly from the platform.
The retailer and the FTC were already entangled in a legal tussle when this latest action was announced. In June, regulators accused the company of using deceptive practices to lure millions into signing up for its Prime subscription service.
The federal government’s lawsuit continued a trend of going after large businesses. Recent actions targeted Alphabet’s Google and Meta’s Facebook over complaints that these major entities misused their power.
As for Khan, this is just another battle in her war against Big Tech.
The Biden administration clearly has a gripe with major companies — unless they are unionized. In that case, they can count on federal subsidies and visits from the president touting their successes.
