Amazon company targeted by US complaint for “illegal” monopoly

by time news

2023-09-27 02:39:46
Amazon truck trailers parked at the airport in Miami, Florida, September 26, 2023. JOE RAEDLE / AFP

In the United States, relations between political powers and Amazon are not at a time of relaxation. After years of investigations, the American competition authority (FTC) and seventeen states filed a complaint on Tuesday, September 26, against the technology giant, accusing it of “illegally maintain its monopoly” thanks to “anti-competitive and unfair strategies”.

“It’s not the size of Amazon that’s to blame”specifies the FTC in a press release, but its “illegal methods which aim to exclude competitors, to prevent them from developing and to prevent alternatives from emerging”.

According to the federal agency, Amazon, for example, discourages sellers from offering prices lower than its own on products where the Seattle (Washington State) group competes with retailers. THE consumer policeman also criticizes the American giant for conditioning the eligibility of merchants for Prime – the subscription which allows consumers to have them delivered quickly – to the use of its logistics services qualified as “expensive”.

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“Amazon is exploiting its monopoly power to enrich itself, while driving up prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of companies that depend [de lui] » to market their products, asserts the president of the FTC, Lina Khan, quoted in the press release.

“The FTC has strayed from its protective mission,” says Amazon

“Today’s complaint clearly shows that the FTC has radically strayed from its mission to protect consumers and competition”, reacted David Zapolsky, a vice president of Amazon, in an online statement. He ensures that the practices called into question by the authority have, on the contrary, “helped drive competition and innovation across the retail industry, and delivered greater choice, lower prices, and faster delivery times to Amazon customers”.

The American group, which achieved 134.4 billion dollars (approximately 127 million euros) in turnover and generated a net profit of 6.7 billion in the second quarter of this year, regularly highlights the progression of sales made by merchants on its platform. In 2022, “more than 60% of transactions on Amazon came from independent sellers, the majority of whom are small and medium-sized businesses”, the company said in August. If the FTC wins, it “will force Amazon to implement measures that will harm consumers and SMEs”assure David Zapolsky.

Read also: Competition: Spain imposes nearly 200 million euros in fines on Apple and Amazon

But for many NGOs, SMEs suffer on the contrary from an unfavorable balance of power. “SMEs have been waiting for this moment for a very long timecommented on Tuesday, Stacy Mitchell, co-director of the Institute for Local Self-Reliance, which campaigns for local and environmentally friendly consumption. By controlling access to the market, Amazon can favor its own products if it wishes, spying on companies by stealing their best ideas and data. The group can dictate its law and govern with astonishing contempt. One day, he gave a seller the “delivery within twenty-four hours” option. The next day, he suspended his account, wiping out his sales. »

The platform represents 37.6% of online sales in the United States according to Insider intelligence, far ahead of supermarkets Walmart (6.8%), Apple (3.5%) and eBay (3.1%).

Amazon already attacked on several fronts

Many American elected officials and the Democratic government of Joe Biden have been trying for years to fight against the monopolies of technology giants, with little success. This summer, the FTC had to suspend its procedure to block the acquisition of Activision Blizzard (video games) by Microsoft, after a series of legal setbacks.

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Lina Khan, chair of the FTC since 2021, became known when she was still a student, with an article entitled “The Amazon Antitrust Paradox”, published in 2017 in the Yale University Law Review. She considered that the American legislative arsenal was insufficient to fight against the monopolistic practices of groups like Amazon.

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In June 2021, the company submitted a complaint to the FTC, accusing its manager of lack of impartiality. But that hasn’t stopped the federal agency from moving forward on several fronts. In June of this year, the FTC filed a complaint against Amazon for “trapped consumers” with its Prime subscription, which renews automatically and is ” complicated “ to be terminated.

The institution also attacked the group over respect for data confidentiality. A month earlier, in May, Amazon agreed to pay more than $30 million to end lawsuits against Ring and Alexa – connected doorbells and speakers, security cameras –, two ranges of products which collect a lot of information on their users.

Read also: Amazon Ring agrees to pay a fine of 5.4 million euros for letting its employees view its customers’ surveillance videos

The World with AFP

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