The US Federal Trade Commission (FTC) and 17 states have filed a lawsuit against Amazon, alleging that the online retailer abuses its dominant position in the market to overcharge consumers, hinder competitors, and exploit sellers on its marketplace. The landmark lawsuit claims that Amazon increases fees for sellers on its platform, taking nearly half of their earnings. The FTC also accuses Amazon of penalizing sellers who offer heavy discounts by making their products “effectively invisible” in search results and pressuring merchants to use its expensive logistics network. This legal action represents a significant test of FTC Chair Lina Khan’s more aggressive approach towards regulating Big Tech companies.
Lina Khan, who gained prominence for advocating the breakup of Amazon in a 2017 academic paper, stated that the FTC’s complaint details Amazon’s use of coercive tactics to maintain its monopolies. In response, David Zapolsky, Amazon’s senior vice-president of global public policy and general counsel, argued that the lawsuit deviates from the FTC’s mission of protecting consumers and competition. The FTC seeks to obtain a court order to permanently cease Amazon’s allegedly illegal behavior. This lawsuit follows a separate lawsuit in which the FTC accused Amazon of deceiving customers into signing up for its Prime service without their consent. Additionally, Amazon recently agreed to pay $25 million to settle a lawsuit related to violating children’s privacy laws through its Alexa voice assistant.
Under the Biden administration, antitrust officials such as Lina Khan and Jonathan Kanter have intensified enforcement efforts to address corporate power in the United States. Kanter has sued Google over its dominance in digital advertising, while the FTC fights to compel Meta (formerly Facebook) to unwind its acquisitions of Instagram and WhatsApp. The FTC has also attempted to block Meta’s acquisition of virtual reality business Within. Currently, the FTC is still trying to prevent Microsoft’s acquisition of Activision. These legal battles reflect the heightened scrutiny and regulatory actions being taken against major tech companies.