The US trade regulator has been researching, examining and interviewing for years, and now the time has come. The authority, which is responsible for both antitrust law and consumer protection in the USA, is suing Amazon because of the conditions that the company sets for retailers on its online marketplace. In the indictment filed Tuesday in federal court in Seattle, the Federal Trade Commission (FTC) and 17 US states accuse Amazon of unfair practices designed to keep competitors down.
The core of the allegations revolve around the trading platform for third parties, the so-called “Marketplace”. Retailers use this to sell their goods on the Amazon website – and pay a commission for it. Amazon also offers a range of other services, from storing goods to shipping. More than half of the sales on the site today are third-party transactions.
The FTC is now accusing Amazon of a number of unfair practices that would result in retailers having little choice but to take advantage of the extra offers. According to the FTC, products end up higher in the search results if retailers also use Amazon’s logistics offerings. Another rule that is questionable under antitrust law is that Amazon prohibits retailers from offering lower prices elsewhere than on Amazon. This is particularly damaging to customers.
An Amazon lawyer said the FTC’s lawsuit is wrong and likely to harm consumers by leading to higher prices and slower deliveries.
Amazon considers the FTC boss to be biased
FTC boss Lina Khan sharply criticized the online retailer in a press conference: “Amazon is a monopolist that exploits its position in a way that makes consumers and retailers pay more for worse service.” Khan, who was brought into the FTC by US President Joe Biden in 2021, has long been known as an Amazon critic. In her law studies, she wrote that the antitrust law in force at the time was hardly suitable for taming giants like Amazon. Now Khan is trying anyway.
Because of these academic papers and other statements by Khan, the company had tried in vain to have the FTC boss declared biased in his case.
The lawsuit is not the regulator’s only case against Amazon this year, but it is by far the most important. In May, the FTC sued the company for failing to delete data from minors collected through Alexa speakers and Ring-branded digital door cameras. In another case, the FTC accused Amazon of tricking customers into selling Prime memberships and making it extremely difficult for them to cancel them. The planned takeover of the vacuum cleaner robot manufacturer iRobot (Roomba) by Amazon for around 1.7 billion dollars is currently being examined by the FTC and EU antitrust authorities.