U.S. Federal Trade Commission and 17 States Sue Amazon for Monopoly Practices

In a groundbreaking legal move, the Federal Trade Commission (FTC) and 17 state attorneys general have launched a lawsuit against ecommerce giant Amazon, accusing it of engaging in a wide array of anti-competitive practices.

 Christy Hoffman, General Secretary of UNI Global Union, reacted to the lawsuit, stating, “I tip my hat to Chairperson Lina Kahn and the FTC, together with the attorneys general, for bringing this important case. Amazon doesn’t understand the meaning of fair play. Its bullying tactics and refusal to follow the rules mean that workers, competitors and the businesses which sell products on the giant’s ecommerce platform have all felt the harsh blow of Amazon’s abuse of power. Even its customers are forced to pay more because the company limits the ability of vendors to drop prices. It’s time to end this.”  

The joint complaint alleges that Amazon dominates the ecommerce market not only through its size but also because its tactics block competitors’ growth and prevent new companies from entering.  According to the complaint, this limits competition on price, variety and quality when it comes to the products on its platform.

FTC Chair Lina M. Khan said, “Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

The complaint argues that Amazon’s anticompetitive behaviour extends across two critical markets: the online superstore serving consumers and the online marketplace services for sellers where Amazon’s rules are designed to limit competition. Amazon prevents sellers from offering lower prices elsewhere, and pressures sellers to use Amazon’s delivery services, and the company degrades the customer experience by replacing organic search results with paid advertisements.

Competitors struggle to establish themselves, meaning that Amazon is often the only option for a small business selling products online. This gives Amazon the possibility to charge monopolistic fees in order to sell on its platform. 

The FTC and state partners are seeking a permanent injunction in federal court to put an end to these practices and restore competition.   

John Newman, Deputy Director of the FTC’s Bureau of Competition, emphasized the significance of this action, stating, “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”

This lawsuit against Amazon represents a critical moment in the battle for fair competition, with far-reaching implications for the digital marketplace.

In 2020, UNI submitted a sweeping set of recommendations to the European Commission to ensure that the Digital Services Act (DSA) protects workers’ rights and upholds the European social model. UNI has also challenged Amazons’ loss-making international ecommerce business as unfair to companies with long track records of social dialogue and relations with trade unions. 

The EU has already taken some of the steps called for in the FTC lawsuit, through its 2022 antitrust settlement with Amazon and the Digital Markets Act. More work remains to establish a level playing field and ensure enforcement.