CONCORD, NH — The Federal Trade Commission and the state attorneys general in 17 states, including New Hampshire, sued Amazon Tuesday, alleging the company of illegal monopolistic practices.
The lawsuit contends that Amazon’s actions allow it to keep rivals and sellers from lowering prices, degrade shopper experiences, overcharge sellers and prevent rival businesses from fairly competing against the company.
“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,” FTC Chair Lina M. Khan said in a commission release. “Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”
Amazon officials could not immediately be reached for comment.
“We are suing Amazon on behalf of New Hampshire’s consumers and small businesses alike,” John Formella, the attorney general of New Hampshire, said. “Amazon’s ongoing pattern of illegal conduct takes advantage of shoppers and undermines small businesses throughout the Granite State. We have seen Amazon illegally work to stifle competition online and use its monopoly power to force small businesses into paying enormous fees while inflating the prices they are charging consumers. Our aim is to help enhance New Hampshire entrepreneurship by working to restore a fair, open, and competitive online economy for all Granite Staters.”
The lawsuit alleges Amazon’s anti-competitive practices occur in the online superstore for shoppers and the online marketplace servers that sellers purchase.
For example, the company allegedly employs anti-discounting tactics that punish other online retailers from offering prices lower than than its own.
If Amazon finds a seller offering lower prices on products elsewhere, it can bury discounters so far down in Amazon’s search results that they essentially are invisible. The result of this tactic is higher prices across the entire internet, the lawsuit asserts.
Amazon also allegedly pressures sellers to obtain “Prime” eligibility for their products. That virtual necessity for doing business on Amazon has made it much more expensive for sellers to also offer their products on other platforms. Such coercion is illegal and has limited competitors’ ability to compete against Amazon, the lawsuit contends.
With its incredible power across both the online superstore market and online marketplace services market, Amazon extracts what the lawsuit contends is “enormous monopoly rents from everyone within its reach.”
Among the allegations in the lawsuit are that Amazon:
- Degrades the customer experience by replacing organic product search results with paid advertisements that worsen search quality.
- Biasing Amazon’s search results to preference Amazon’s own products over other that Amazon knows are of higher quality.
- Charges costly fees on the hundreds of thousands of sellers that must rely on Amazon to stay in business. These fees hurt not only sellers but also consumers who then pay increased prices for products sold on Amazon.
New Hampshire joined the FTC and 16 other states: Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.
The FTC and its state partners are seeking a permanent federal court injunction prohibiting Amazon from engaging in the allegedly unlawful conduct and loosening Amazon’s monopolistic control to restore competition.
Source : Patch
