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The U.S. Federal Trade Commission (FTC) and the attorneys’ general of 17 states today filed an antitrust lawsuit against Amazon over its e-commerce business, accusing the company of being a “monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.”
The FTC was joined by attorneys’ general of New York, Connecticut, Pennsylvania, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, and Wisconsin.
“Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition, in the agency’s press release.
One of the complaints filed by the governments targets Amazon’s “sponsored products” on its e-commerce store website, which users know well appear on the top of search results and often push down the actual results, similar to what is seen on Google, but with often many more entries.
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Amazon is accused of “replacing relevant, organic search results with paid advertisements—and deliberately increasing junk ads that worsen search quality and frustrate both shoppers seeking products and sellers who are promised a return on their advertising purchase.”
Amazon Basics, the e-commerce giants own line of products, is also cited as an example of monopolistic power, as Amazon is said to “preference Amazon’s own products over ones that Amazon knows are of better quality,” in its search results.
The governments allege that the fees Amazon charges third-party sellers are another example of anticompetitive practices, as they “force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon. ”
Read the full complaint here:
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