Amrutha Avasarala, Pune
Amazon is taken to court by the Federal Trade Commission (FTC) and 17 other States on account of practicing unfair means to protect its monopoly, on Tuesday.
The FTC filed a 172 page lawsuit against the e-commerce platform. The lawsuit mentions that Amazon uses “a set of interlocking anticompetitive and unfair strategies” to keep away its competitors and attract consumers to buy products on Amazon. It further adds that the company fueled these motives at an expense of third party sellers who depend on Amazon for distribution of their products. The lawsuit also mentions that a single company, Amazon, has seized control over much of the online retail economy.
It is said that the merchants were blocked from selling their products on other sites at lower prices. It is regarded as an artificial price hike and according to officials, Amazon has been practicing this since long. This made its rivals impotent and impossible to compete with the powerful business giant.
The case is filed in District Court for Western District of Washington. FTC has requested the court to issue an order restricting Amazon to engage in “unlawful conduct”. Lina Khan, the chairperson of FTC said that a healthy competition would be restored if the judgment turns in favour of FTC and added that it would in turn help the consumers by providing various options to choose and pick.
Amazon responded that the allegations are made on misunderstanding the facts and that the company is ready to face and fight the government in the court of law.
David Zapolsky, the general counsel at Amazon said that if the F.T.C. intervenes in the system, it would result in higher prices, slower deliveries and reduced options for the customer base.
The battle between Amazon and the federal government is not a recent development. FTC began its investigation in summer 2019, with complaints filed against the company by critics and rivals for its unfair trade practices. The investigation took a serious turn when Lina Khan took charge as the chairperson of FTC in 2021. Weeks after she came into power, Amazon filed a petition against FTC to keep it away from the matters of the company.
In 2022, Amazon accused FTC of harassment in its attempt to interview Mr. Bezos and Mr. Andy Jassy, Chief Executive of Amazon regarding Amazon Prime subscriptions.
In June, FTC sued the company to have violated consumer protection laws for tricking and leading people to buy Amazon Prime subscriptions.
Such lawsuits are not new to Amazon. In 2021, Columbia challenged the company in court but the case was dismissed the next year. A similar case was put forward by California as well but remained ineffective.