Federal Government Sues Amazon for Alleged Antitrust Violations

NEVADA – The federal government today sued Amazon.com, Inc. for alleged antitrust violations. Attorneys general from 17 states, including Nevada, also joined the effort. The complaint alleges that Amazon violates the law by stifling competition on price, product selection and quality.

“There is nothing inherently wrong with being a large company, but it is wrong to use your size and dominance to quash both current and potential competitors,” Nev. Attorney General Aaron Ford said in a press statement. “Amazon’s conduct has negatively impacted numerous businesses and their consumers, thereby thwarting its competition.”

The Federal Trade Commission and the state attorneys general say Amazon’s actions prevent current and future rivals from challenging the company’s dominance. Amazon has a fulfilment center north of Reno.

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina Khan. “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.”

The lawsuit takes aim at alleged illegal tactics enacted by Amazon, including:

• Anti-discounting measures that discourage online sellers offering prices lower than Amazon
• Making it expensive for sellers
• Replacing organic search results with “junk ads”
• Biasing search results to preference Amazon’s products over others
• Charging exorbitant fees to Amazon’s sellers

The states of Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin joined the lawsuit.

John Newman, deputy director of the FTC’s Bureau of Competition, said that “seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”

The FTC and states are seeking a permanent injunction in federal court that would prohibit Amazon from further unlawful conduct and restore competition. Amazon did not respond to a request for comment.

This is a significant development in the ongoing scrutiny of big tech companies, and it could have a major impact on the e-commerce market. If the government is successful in its lawsuit, it could force Amazon to change its business practices and make it easier for other companies to compete.

Credits: This is Reno / FTC.GOV