The Federal Trade Commission and more than a dozen state attorneys general have filed a sweeping antitrust lawsuit against Amazon, alleging that the e-commerce giant has unlawfully leveraged its market dominance to stamp out would-be competitors.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina Khan said in a statement Tuesday. “The complaint sets forth detailed allegations noting how Amazon is now exploiting 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 Amazon to reach them.”
“The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court,” Amazon said in a statement Tuesday.
The suit targets the parts of Amazon’s business that service consumers and sellers, according to an FTC press release. Specifically, the agency is accusing Amazon of punishing sellers who offer lower-priced products on different platforms and restricting which sellers are eligible for Prime shipping benefits. The agency is also targeting Amazon’s ability to bias its search results in favor of the company’s own products.
The agency says that it is “seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.”
Rumors about a potential lawsuit from the FTC have been swirling for months, with a July report from Politico suggesting that legal action was getting closer to materializing.
The FTC has taken numerous jabs at Amazon over the past several months. In June, the FTC filed a lawsuit against the tech giant for allegedly tricking customers into signing up for its Prime subscription and making it difficult to cancel. There’s also Amazon’s now-$1.42 billion acquisition of robot vacuum maker iRobot that the FTC began reviewing last year as well as its acquisition of MGM.
The FTC has been looking into other areas of Amazon’s business as well, including Amazon’s Ring doorbell service. Earlier this year, Amazon agreed to pay $5.8 million to settle an FTC lawsuit that accused Ring workers and hackers of illegally spying on customers. The tech giant also paid $25 million to settle a separate complaint from the FTC, which alleged Amazon’s Alexa product stored the recordings of children’s voices in violation of several federal laws.
The Amazon investigation prompting Tuesday’s suit started under Joe Simons, the former FTC chair under Donald Trump. But Simons reportedly diverted agency resources from that probe against Meta’s Facebook following the platform’s Cambridge Analytica scandal. Khan, the current FTC chair, has long criticized Amazon’s e-commerce dominance and bulked up the agency’s ongoing Amazon probe after her 2021 confirmation.
Khan is a known critic of Amazon. Before heading up the FTC, Khan penned a 2017 article for the Yale Law Journal titled “Amazon’s Antitrust Paradox.”