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Tuesday, September 26, 2023

U.S. government sues Amazon over online marketing monopoly

Amazon was accused of forcing merchants to use its logistics services to be offered part of its Prime subscription bundle.

• September 26, 2023
Amazon
Amazon

American e-commerce and tech company Amazon has been hit with a lawsuit by the United States Federal Trade Commission (FTC) and 17 other states for illegally protecting monopoly in online retail.

On Tuesday, Amazon was accused of forcing merchants to use its logistics services to be offered part of its Prime subscription bundle – it had also stopped merchants on its platform from offering lower prices elsewhere.

As a result of this practice, the agency and states said that higher prices and worse shopping experiences for consumers have been recorded.

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said Lina Khan, the chair of the FTC, according to the New York Times.

After years of scrutiny, the lawsuit has brought the spotlight to the tech and e-commerce giant, and the government’s challenge of the company could change the way Americans buy products.

Its online marketplace, also known as “everything store” for the range of products it sells and the speed with which it delivers them, has given Amazon its most marketing power as it boasts of a $1.3 trillion cap business.

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