{"id":26291,"date":"2023-09-26T17:09:47","date_gmt":"2023-09-26T17:09:47","guid":{"rendered":"https:\/\/staging.sightlinemg.com\/federaltimes\/uncategorized\/2023\/09\/26\/federal-trade-commission-states-sue-amazon-over-alleged-market-abuses\/"},"modified":"2026-08-08T05:05:02","modified_gmt":"2026-08-08T05:05:02","slug":"federal-trade-commission-states-sue-amazon-over-alleged-market-abuses","status":"publish","type":"post","link":"https:\/\/staging.sightlinemg.com\/federaltimes\/federal-oversight\/2023\/09\/26\/federal-trade-commission-states-sue-amazon-over-alleged-market-abuses\/","title":{"rendered":"Federal Trade Commission, states sue Amazon over alleged market abuses"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Amazon is being sued by U.S. regulators and and 17 states over allegations that the company abuses its position in the marketplace to inflate prices on other platforms, overcharge sellers and stifle competition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lawsuit, filed Tuesday in U.S. District Court for the Western District of Washington, is the result of a years-long investigation into Amazon\u2019s businesses and one of the most significant legal challenges brought against the company in its nearly 30-year history.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to a statement sent by the agency, the Federal Trade Commission and states that joined the lawsuit are asking the court to issue a permanent injunction court that they say would prohibit Amazon from engaging in its unlawful conduct and loosen its \u201cmonopolistic control to restore competition.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They allege the company engages in anti-competitive practices through anti-discounting measures that deter sellers from offering lower prices for products on non-Amazon sites, mirroring allegations made in a separate lawsuit last year by the state of California. The complaint says Amazon can bury listings that are offered at lower prices on other sites.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The complaint also says the company degrades the customer experience by replacing relevant search results with paid advertisements, biasing its own brands over other products it knows to be of a better quality and charging heavy fees that forces sellers to pay nearly half of their total revenues to Amazon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe 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,\u201d FTC Chairman Lina Khan said in a prepared statement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Many had wondered whether the agency would seek to a forced break-up of the retail giant, which is also dominant in cloud computing and has a growing presence in other sectors like groceries and health care. In a briefing with reporters, Khan dodged questions of whether that will happen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAt this stage, the focus is more on liability,\u201d she said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some estimates show Amazon controls about 40% of the e-commerce market. A majority of the sales on its platform are facilitated by independent sellers consisting of small and medium-sized businesses and individuals. In return for the access it provides to its platform, Amazon rakes in billions through referral fees and other services like advertising, which makes products sold by sellers more visible on the platform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The vast majority of third-party merchants also use the company\u2019s fulfillment service to store inventory and ship items to customers. Amazon has been consistently raising fees for those reliant on the program and more recently <a href=\"https:\/\/apnews.com\/article\/amazon-seller-fees-antitrust-62517bb98af619341fcf7c173ab83d45\">imposed &#8211; and then abandoned- another fee<\/a> on some who don\u2019t, a move that was blasted by the company\u2019s critics.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Last quarter, Amazon reported $32.3 billion in revenue from third-party services. According to the anti-monopoly organization Institute for Local Self-Reliance, the fees cost U.S. sellers 45% of their revenue in the first half of this year &#8211; up from 35% in 2020 and 19% in 2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Amazon has also long faced allegations of undercutting businesses that sell on its platform by assessing merchant data and creating its own competing product that it then boosts on the site. In August, the company said it was eliminating some in-house brands that weren\u2019t resonating with customers and would relaunch some items under existing brands like Amazon Basics and Amazon Essentials. Booksellers and authors have also been urging the Department of Justice to investigate what they\u2019ve called Amazon\u2019s \u201cmonopoly power over the market for books and ideas.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Amazon did not immediately respond to a request for comment Tuesday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If successful, a court case could be a big boost for the FTC\u2019s Khan, a Big Tech critic who gained prominence as a Yale law student in 2017 for her scholarly work \u201cAmazon\u2019s Antitrust Paradox.\u201d In 2021, Amazon <a href=\"https:\/\/apnews.com\/article\/joe-biden-amazoncom-inc-technology-government-and-politics-business-e14b505560514ff9310793d213fab3f9\">had sought to get her recused<\/a> from agency probes against the company because of her earlier criticism.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under Khan\u2019s watch, the FTC has aggressively attempted to blunt Big Tech\u2019s influence but has been unsuccessful recently in some of the most high-profile cases, including its bid to block Microsoft\u2019s takeover of the video game maker Activision Blizzard and Meta\u2019s acquisition of the virtual reality startup Within Unlimited. The agency is currently in the middle of a protracted lawsuit against Facebook parent Meta, which it alleges to have engaged in monopolistic behavior. The Justice Department is also challenging Google\u2019s market power in court.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some of the agency\u2019s allegations in the Amazon case mirrors those made in a separate lawsuit last year by the state of California. A similar case filed by the District of Columbia was thrown out by a federal judge earlier last year and is currently under appeal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The federal complaint follows other actions the FTC has taken against Amazon in the past few months. In June, the agency sued the company, <a href=\"https:\/\/apnews.com\/article\/amazon-prime-ftc-lawsuit-9e60955fc71d9891ed16c5b856222279\">alleging it was using deceptive practices to enroll consumers into Amazon Prime<\/a> and making it challenging for them to cancel their subscriptions. Amazon disputes the allegations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In late May, the company agreed to pay a $25 million civil penalty to <a href=\"https:\/\/apnews.com\/article\/amazon-alexa-ring-doorbell-privacy-violations-ftc-971419109d7af10203d7ccfd28fcd0ad\">settle allegations that it violated a child privacy law<\/a> and misled parents about data deletion practices on its popular voice assistant Alexa.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many had wondered whether the agency would seek to break up of the retail giant, which is also dominant in cloud computing and other sectors.<\/p>\n","protected":false},"author":7,"featured_media":55379,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":9,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[60,39,12,31,61,9,62],"tags":[],"coauthors":[5871],"class_list":["post-26291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contracting","category-doj-fbi","category-govcon","category-home","category-m-a","category-federal-oversight","category-regulations-govcon"],"acf":{"subheadline":"","legacy_arc_id":"R6LQVBSAHJFL3GHRBCMNPCNMGE","arc_canonical_url":"\/federal-oversight\/2023\/09\/26\/federal-trade-commission-states-sue-amazon-over-alleged-market-abuses\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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