After Google, US government sues Amazon for antitrust violations
What's the story
Amazon is being sued by the Federal Trade Commission (FTC) and 17 state attorney generals for alleged antitrust violations, accusing the e-commerce giant of abusing its position to inflate prices, overcharge sellers, and stifle competition.
The lawsuit, filed in Washington, DC is the result of a years-long investigation and poses a significant legal challenge to the company's nearly 30-year history.
This lawsuit comes at a time when Google is also facing one of the biggest antitrust trials in the US.
Details
Allegations of price inflation and unfair practices
The lawsuit claims that Amazon deters sellers from offering lower prices on non-Amazon sites, echoing allegations filed in a separate lawsuit by California last year.
It also accuses Amazon of degrading customer experience by replacing relevant search results with paid ads, favoring its own brands over better-quality products, and charging heavy fees that force sellers to pay nearly half of their total revenues to Amazon.
What Next?
Forced reliance on Amazon's logistics service
The lawsuit also claims that Amazon forces sellers to use its 'Fulfillment by Amazon' logistics service to qualify for Amazon Prime, even if they prefer other delivery options.
Critics argue that Amazon consistently raises fees for those reliant on the program and has even imposed additional fees on some who don't use it.
Last quarter, Amazon reported $32.3 billion in revenue from third-party services.
Insights
FTC's ongoing actions against Amazon
The FTC's federal complaint is one in a string of actions against Amazon by the agency in recent months.
In June, the FTC sued Amazon for alleged deceptive practices in signing up consumers for Amazon Prime and making it difficult for them to cancel subscriptions, which Amazon denies.
In late May, Amazon agreed to pay a $25 million civil penalty to resolve allegations of violating child privacy laws and misleading parents about data deletion practices on its Alexa voice assistant.