Federal Trade Commission Chair Lina Khan has long argued that tech companies have become too powerful. Photo: POOL/REUTERS
Competition czar Joe Biden accuses Amazon of using “punitive and coercive tactics” to block business and siphon money from Prime subscribers.
Lina Khan, the 34-year-old Democratic chairwoman of the Federal Trade Commission (FTC), sued Amazon to block its “unlawful” monopoly on the online marketplace.
On Tuesday, the US competition watchdog and 17 states sued the company, alleging it used its dominance to keep prices high and forced sellers to use their own delivery services.
The Federal Trade Commission said Amazon has begun providing biased recommendations and search results that favor its own products, even if they are of lower quality than those of competitors.
The company said that Amazon is gradually deteriorating the quality of customer service in its online store. , clogging the site with items that sellers have paid to promote, even if they are of poor quality.
The regulator added that sellers are regularly “punished” if they offer items at a lower price on rival websites because Amazon reduces their visibility in your store.
Sellers must also ensure they are eligible to receive Prime shipping discounts using Amazon's Own Shipping Services. The Federal Trade Commission said the $1.3 trillion company «extracts massive monopoly rents from everyone within its reach.»
Third-party companies selling on Amazon are handing over up to 50% in some cases. their total revenues to technology companies. giant, the Federal Trade Commission said.
Ms. Khan said Amazon had degraded its service to «the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon.»
In a statement to the Federal Trade Commission The FTC said: “Amazon broke the law not because it was big, but because it used its scale and power to stifle competition.”
Amazon denied the charges. David Zapolsky, Amazon's general counsel, said: «Today's lawsuit makes clear that the FTC has radically departed from its mission to protect consumers and competition.»
“If the Federal Trade Commission gets its way, the result will be fewer products to choose from, higher prices, slower deliveries to consumers and fewer opportunities for small businesses.”
Under the leadership of Ms. Khan, a legal prodigy , which Quickly gained influence over Democratic politicians, the Federal Trade Commission began a crusade against the tech giants.
She has long argued that tech companies have become too powerful: Ms Khan rose to prominence as a student in 2017 after publishing an article entitled «The Amazon Antitrust Paradox». The newspaper argued that Amazon should be broken up even if it has lowered prices for consumers.
The Federal Trade Commission's legal challenge did not amount to a demand that Amazon be broken up. He called for a permanent ban to block a number of sales methods that the regulator believes are illegal.
The watchdog has already sued Amazon over claims it makes it too difficult to cancel a Prime membership, which offers cheaper and free shipping. . Amazon disputes these claims.
More than 200 million people worldwide subscribe to Prime, which costs £8.99 a month in the UK.
The latest lawsuit is just one of many competition cases Ms. Khan has brought against big tech companies since being sworn into office. as chairman of the Federal Trade Commission in 2021, although some have been fired.
An attempt to block Microsoft's takeover of Call of Duty maker Activision in a $69 billion deal was overturned by the court, although the FTC appealed . decision.
An attempt to stop the takeover of a tiny virtual reality startup by Facebook owner Meta also failed.
In a separate case brought by the Biden Justice Department, Google is fighting a lawsuit over its dominance in online search . The case is ongoing.
In the UK, the Competition and Markets Authority (CMA) is also investigating Amazon's digital marketplace over concerns about its dominance.
The tech giant has proposed a number of measures to ease regulator concerns, including not using data from rival sellers to give it an advantage. The UK regulator is currently consulting on these proposals.
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