The US federal competition authority filed a lawsuit against Amazon for monopolistic practice and anti-competitive strategies

After years of investigations, and tensions between political powers and the Amazonthe US Federal Competition Authority, the FTC, and 17 states, filed a lawsuit yesterday against the tech giant, accusing it of “illegally maintaining its monopoly” thanks to “anti-competitive and abusive strategies”. “What counts is not Amazon’s size,” the FTC clarifies in its announcement, but “illegal methods aimed at excluding competitors, hindering their development and the emergence of alternatives”.

According to the federal authority, Amazon discourages, for example, retailers from offering lower prices than its own on products where the Seattle group is in competition with retail suppliers, as reported by APE-MPE. The authority also accuses the American giant that sets as a condition of merchant eligibility for Prime (a service that allows consumers to have expedited delivery) using Amazon’s expensive supply chain services.

“Amazon is exploiting the power it derives from its monopoly to get richwhile driving up prices and worsening service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that depend on Amazon” to market their products, FTC Chairwoman Lina Kahn said in a statement. announcement.

“It has the ability to enforce its law”

“The lawsuit filed today clearly shows that the FTC has drastically departed from its mission of protecting consumers and competition,” Amazon vice president David Zapolsky said in a statement posted online. The Amazon executive asserts that the practices for which the group is being complained about by the federal authority have on the contrary “helped to stimulate competition and innovation throughout the retail sector and have allowed us to offer more choices, lower prices and shorter shipping times to customers.” of Amazon”.

The American group, with a turnover of 134.4 billion dollars and profits of 6.7 billion during the second quarter of 2023, systematically projects the increase in sales achieved by merchants through the platform. In 2022, “over 60% of sales through Amazon came from independent sellers, the majority of which are small and medium-sized businesses,” the group claimed last month.

If the FTC wins this battle, it “will force Amazon to implement measures that harm consumers and small and medium-sized businesses,” David Zapolsky threatened in his announcement. But according to non-governmental organizations, SMEs suffer on the contrary due to the unfavorable balance of power. “SMEs have been waiting a long time for this moment,” commented Stacey Mitchell, one of the directors of the Institute for Local Self-Reliance, which promotes local consumption with respect for the environment.

“By controlling market access, Amazon has the ability to prioritize its own products, spy on businesses by stealing their best ideas and data. It has the ability to impose its law and rule with astonishing contempt. On one day, it grants a retailer the “ship within 24 hours” perk. The next day he deletes his account wiping out his sales». The platform accounts for 37.6% of online sales in the US, according to Insider intelligence, compared to Walmart (6.8%), Apple (3.5%) and eBay (3.1%).

“bias”

Parliamentarians, state actors and members of his government Joe Biden have been struggling for years with the fight against the monopolies of the tech giants, without much success. Over the summer, the FTC was forced to drop legal proceedings to block Microsoft’s acquisition of Activision Blizzard (video games) after a series of court defeats. Lina Kahn, chair of the FTC since 2021, rose to prominence while still a student with the article titled “Amazon’s Antitrust Paradox” published in 2017 in the Yale University Law Review. In her article she opined that the US legal arsenal is inadequate to deal with the monopolistic practices of conglomerates like Amazon.

In June 2021, the company filed a complaint with the FTC accusing its director of “bias”. But this did not stop the federal authority from advancing on several fronts. In June, the FTC filed a lawsuit against Amazon for “consumer entrapment” with the Prime subscription, which renews automatically, while at the same time the cancellation process is complicated.

The federal authority also attacked the group for respecting data confidentiality. Last May, Amazon agreed to pay $30 million to end litigation against Ring and Alexa (smart doorbells, speakers and security cameras), two product lines that collect information about their users.