Washington
The US Federal Law Commission (FTC) and 17 US states on Tuesday (Sep 26) filed a long-awaited antitrust lawsuit against Amazon. The trade watchdog has accused the online retail giant of harming consumers with higher prices.
Attorney generals from 17 US states have joined the FTC lawsuit following a four-year investigation.
The latest move by the US government is aimed at breaking Big Tech's dominance of the internet.
The lawsuit was expected for years as complaints against the tech giants piled up. The complaints are over abuse of tech giants' dominance of search, social media and online shopping that makes them gatekeepers of the lucrative aspects of the online world.
Watch | US Trade commission set to file antitrust lawsuit against Amazon
Other tech giants like Alphabet's Google and Meta-owned Facebook have also been at the receiving end of federal lawsuits.
"The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon," the agency said in a statement.
The agency has said that it was asking the court for a permanent injunction and for an order to Amazon to refrain from unlawful conduct.
In its lawsuit, the FTC has said that Amazon punished sellers who wanted to offer prices that were lower than Amazon's by making it difficult for consumers to find these sellers on the platform.
Other allegations say that Amazon gave preference to its own products over those of competitors on the platform.
Lina Khan, the Chairperson of FTC, had written about Amazon's dominance when she was studying law at Yale University years ago. Khan was also on the staff of the US House of Representatives committee which, in 2020, wrote a report that supported reining in four tech giants: Amazon, Apple, Google and Facebook.
"Amazon is now exploiting that monopoly power to harm its customers, both the tens of millions of families that shop on Amazon's platform and the hundreds of thousands of sellers that use Amazon to reach them," she said on Tuesday, September 26
Reuters reported that immediately after news of the lawsuit broke, Amazon shares tanked by 3 per cent.
Wrongheaded lawsuit, says Amazon
The retail giant, quite expectedly, lashed out at the FTC and said that the lawsuit would hurt consumers as it would lead to higher prices.
"The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store," said David Zapolsky, Amazon's general counsel, as quoted by Reuters.
(With inputs from agencies)
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