The Federal Trade Commission, the U.S. government’s primary business regulator, sued Amazon on Tuesday, alleging that the company has used its power to warp ecommerce across the internet.
The FTC said it filed an antitrust lawsuit in the U.S. District Court for the Western District of Washington state, backed by the attorneys general of 17 states, including two Republicans. Amazon is based in Washington state.
The allegations are the most aggressive actions yet from President Joe Biden’s FTC chair, Linda Khan, a longtime critic of Amazon. The agency said Amazon “uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power,” the FTC said in a news release.
The allegations focus on the company’s main ecommerce platform, Amazon.com, and paint a picture of a company able to use its size and power to pressure sellers to agree to its terms and warp the prices of goods.
“There is immediate harm that is ongoing here,” Khan said in a news conference ahead of the announcement. “Sellers are paying one of every $2 to Amazon. Shoppers are paying higher prices as a result, not just on Amazon but across the internet. And the public as a whole has been deprived of the benefits of open and fair and free competition. And so that’s what this case is really about, and those are the harms that we’re looking to fix.”
The FTC alleges that Amazon deters sellers from discounting goods and lowering prices below what is available on Amazon, pushing prices higher across the internet. It also argues that Amazon pushes sellers into its fulfillment services, making it more expensive for sellers to offer their goods elsewhere.
Under Khan’s leadership, the FTC has already taken several actions to counter Amazon this year. It sued the company this year for how it automatically renewed customers’ Prime subscriptions. It has proposed that Amazon pay $25 million for alleged improper storage of children’s data obtained through Alexa devices. And Amazon settled with the agency for $5.8 million in May after the FTC accused it of allowing employees to view data obtained via Ring cameras.