(Image credit: NPR)
According to the FTC, Amazon has prevented competition by mandating sellers on its platform to purchase Amazon’s logistics services in order to secure “Prime eligibility”, or the best seller benefits. The parties also allege that Amazon punished sellers by using anti-discounting measures such as burying search results or knocking them off their "Buy Box" feature which allows the shopper to purchase the product. Furthermore, Amazon’s dominance in online commerce leaves sellers with little options but to accept Amazon’s terms, resulting in higher prices and worse services for consumers.
Following the launch of this new case, the FTC Chair Lina M. Khan argued that, “The complaint sets forth…how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service … Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”
This case is a prime example of the national government's ability to intervene in the economy specifically through the use of laws such as the Sherman Anti-Trust act, which serve to prevent monopolies from emerging in the market. This power is mainly granted through the commerce clause, as many corporations (including Amazon) have interstate deliveries and manufacturing, and thus falls under interstate commerce, and therefore is under the jurisdiction of the federal government.
From my perspective, it is invaluable that the government takes action against powerful companies such as Amazon. Domination of the market often leads to lower quality products and excessive greed, as the company has no fear over public reception due to their status as a monopoly. It seems to me that, by suing Amazon over their practices, the FTC serves as a reminder that there are still checks against malicious business practices in an age dominated by corporate lobbying and excessive deregulations.
- Daigo Hayashi
Bibliography:
- Sandhu-Longoria, A. K. (2023, September 27). “monopolistic practices”: Amazon sued by FTC, 17 states in antitrust lawsuit. USA Today. https://www.usatoday.com/story/money/2023/09/26/us-sues-amazon-for-monopoly/70972850007/
- Fung, B. (2023, September 27). US government and 17 states sue amazon in landmark monopoly case | CNN business. CNN. https://www.cnn.com/2023/09/26/tech/ftc-sues-amazon-antitrust-monopoly-case/index.html
- Day, M., & Nylen, L. (2023, September 26). FTC chief Lina Khan aims to end Amazon “illegal conduct.” Bloomberg.com. https://www.bloomberg.com/news/articles/2023-09-26/ftc-chief-aims-to-end-amazon-illegal-conduct-quiet-on-breakup#xj4y7vzkg
- Selyukh, A. (2023, September 26). U.S. sues Amazon in a monopoly case that could be existential for the retail giant. NPR. https://www.npr.org/2023/09/26/1191099421/amazon-ftc-lawsuit-antitrust-monopoly
- Ritchie, J. N. & A., & Staff in the Bureau of Competition & Office of Technology. (2023, September 26). FTC sues Amazon for illegally maintaining monopoly power. Federal Trade Commission. https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power