United States: competition authority and 17 states sue Amazon for “illegal” monopoly

United States: competition authority and 17 states sue Amazon for “illegal” monopoly

2023-09-27 02:55:52

After years of investigations and tensions between political powers and Amazon, the American competition authority (FTC) and 17 states filed a complaint on Tuesday against the technology giant, accusing it of “illegally maintaining its monopoly” through “anti-competitive and unfair strategies”.

“It is not the size of Amazon that is at issue”, 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 group competes with retailers.

The authority also criticizes the American giant for making merchants’ eligibility for “Prime” (a subscription which allows consumers to have them delivered quickly) conditional on the use of Amazon’s “expensive” logistics services.

“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 on Amazon” to market their products, asserts the president of the FTC, Lina Khan, quoted in the press release.

Amazon rejects these accusations

“The complaint filed today clearly shows that the FTC has radically departed from its mission to protect consumers and competition,” responded David Zapolsky, a vice president of Amazon, in an online statement.

He assures that the practices questioned by the authority have on the contrary “contributed to stimulating competition and innovation throughout the retail sector, and have made it possible to offer greater choice, lower prices lower prices and shorter delivery times to Amazon customers.

The American group, which achieved $134.4 billion in turnover and generated a net profit of $6.7 billion in the second quarter of this year, regularly highlights the increase in sales made by merchants on its platform.

In 2022, “more than 60% of sales on Amazon came from independent sellers, the majority of whom are small and medium-sized businesses,” the company said last month. If the FTC wins, it “will force Amazon to implement measures that harm consumers and SMEs,” assures David Zapolsky.

A long-denounced balance of power

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 time,” commented 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 their data. She can dictate her law and govern with astonishing contempt. One day, she gives a seller the 24-hour delivery option. The next day, she suspended her account, completely wiping out her 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%).

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.

Last June, the FTC filed a complaint against Amazon for having “trapped consumers” with its Prime subscription, which renews automatically and is “complicated” to cancel.

READ Also:  "If so, I'll close" – Libero Quotidiano

The institution also attacked the group over respect for data confidentiality. Last May, Amazon agreed to pay more than $30 million to end lawsuits against Ring and Alexa (connected doorbells and speakers, security cameras), two product lines that collect a lot of information about their users.

#United #States #competition #authority #states #sue #Amazon #illegal #monopoly


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent News

Editor's Pick