The FTC and plaintiff states alleged that Amazon, an online retail and technology company, is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The lawsuit alleges that 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.
According to the complaint, Amazon engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging. The complaint alleges that Amazon’s anticompetitive conduct occurs in two markets — the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. Tactics described in the complaint include
- Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet.
- Conditioning sellers’ ability to obtain “Prime” eligibility for their products — a virtual necessity for doing business on Amazon — on sellers using Amazon’s costly fulfillment service, which makes it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has limited competitors’ ability to effectively compete against Amazon.
The complaint also alleges that Amazon extracts enormous monopoly rents from all market participants, including:
- Degrading the customer experience by replacing relevant, organic search results with paid advertisements and deliberately increasing junk ads that worsen search quality.
- Favoring Amazon’s search results to preference Amazon’s own products.
- Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. Combined, all of these fees force many sellers to pay close to 50 percent of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.