New York is among 17 states that are joining the Federal Trade Commission (FTC) is suing Amazon (NASDAQ: AMZN), alleging that the online retail and technology company is a monopolist.
The entities accuse Amazon of using “a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power,” the office of New York State Attorney General Letitia James said in its Tuesday announcement.
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.
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The Seattle, Washington–based ecommerce giant operates a fulfillment center in Clay and a delivery station in DeWitt.
The complaint alleges that Amazon violates the law not because it is big, but because it “engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging,” James’ office said in a news release.
By stifling competition on price, product selection, and quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon “ensures that no current or future rival can threaten its dominance,” the suit alleges.
Amazon’s “far-reaching schemes” impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers.
“Amazon illegally raised prices for consumers and took advantage of online sellers in its storefront and they should be held accountable,” James said in the release. “Amazon’s monopolistic behavior is hurting consumers, online sellers, competition, and the overall economy. Today my office is leading a multistate coalition in joining the FTC to put an end to Amazon’s abusive and manipulative practices to protect consumers and small businesses nationwide. Every company, big or small, must abide by the law and my office is not afraid to hold those that don’t to account.”
Amazon reaction
In an article about the lawsuit on the website of ABC News, Amazon reacted saying, “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” Amazon said. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”
The company also added, “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
Amazon has cooperated with the FTC over a years-long investigation, the company noted. “It was our hope the agency would recognize that Amazon’s innovations and customer-centric focus have benefited American consumers through low prices and increased competition in the already competitive retail industry,” the company added.
