By Haleluya Hadero | Associated Press
The Federal Trade Commission and states that joined the lawsuit allege Amazon is violating federal and state antitrust laws. They are asking the court to issue a permanent injunction that they say would prohibit Amazon from engaging in its unlawful conduct and loosen its “monopolistic control to restore competition.”
“The 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,” FTC Chairman Lina Khan said in a prepared statement.
The lawsuit also accuses Amazon of degrading customers’ experience by replacing relevant search results with paid advertisements, favoring its own brands over other products it knows to be of better quality, and charging heavy fees that force sellers to pay nearly half of their total revenues to Amazon. According to the anti-monopoly organization Institute for Local Self-Reliance, the cut sellers give to Amazon from their revenue is up from 35% in 2020 and 19% in 2014.
The vast majority of third-party merchants also use the company’s 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 imposed — and then abandoned — another fee on some who don’t, a move that was blasted by the company’s critics. Last quarter, Amazon reported $32.3 billion in revenue from third-party services.