Amazon is being sued by the US antitrust agency for allegedly operating an unlawful online retail monopoly

On Tuesday, a leading US antitrust regulator filed a lawsuit against Amazon, claiming that the online retail giant was operating an unlawful monopoly by suppressing prospective competitors.

Chair of the Federal Trade Commission Lina Khan stated, “Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies.”

17 states joined the FTC in the lawsuit and claimed that Amazon had broken two antitrust statutes.

In the first instance, the lawsuit claims that Amazon penalizes businesses by devaluing their products on the website when they sell them elsewhere for less money.

The FTC said that it also forces businesses to utilize Amazon’s “expensive” delivery service in order to reach Prime subscribers, the site’s largest and best catered-to audience.

John Newman, Deputy Director of the FTC’s Bureau of Competition, remarked that one case has seldom had the potential to benefit so many individuals in the history of US antitrust law.

Amazon said that it vehemently disagreed with the case’s basis.

“Today’s lawsuit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Senior Vice President of Global Public Policy at Amazon.

“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,” he said.

Khan, who established her reputation in academics by challenging whether antitrust rules were appropriate in the digital era in a study titled “Amazon’s Antitrust Paradox,” finds the case to be very significant.

Her renowned study was a response to a key publication by conservative academic Robert Bork, who argued that regulators of fair competition should not interfere with mergers unless there was a demonstrable risk of increased prices and a danger to consumers.

Written in the 1970s, the concept shaped government policies and judges who now decide the most important issues.

Khan was chosen by US President Joe Biden in 2021 to head the agency in charge of defending consumer interests and maintaining a fair playing field for corporations.

Her record since entering the position has been shaky as a result of a string of court losses that raised concerns about her ability to overturn decades of lax antitrust enforcement in Washington.

Khan suffered her most recent setback in July when a federal judge rejected her agency’s challenge to Microsoft’s $69 billion acquisition of the Activision video game company.

She had previously lost in the same San Francisco courthouse when the judge ruled that the FTC’s objection to Facebook owner Meta purchasing VR software startup Within was improper.