Amazon is being sued for alleged price-fixing

by | Oct 3, 2023

The Federal Trade Commission (FTC) and 17 state attorney generals have filed an antitrust lawsuit against Amazon, alleging the e-commerce behemoth uses its position in the marketplace to inflate prices on other platforms, overcharge sellers and stifle competition.

The lawsuit was filed in the U.S. District Court for the Western District of Washington and is the result of a years-long investigation into Amazon’s businesses and one of the most significant legal challenges brought against it in the company’s nearly 30-year history.

The allegation comes after the FTC filed another lawsuit in June this year accusing the company of using deceptive designs, known as ‘dark patterns’, to trick consumers into enrolling in its Prime program. The regulatory agency, led by Big Tech critic and FTC Chair Lina Khan, also alleged the company’s leadership slowed or rejected changes that made cancelling the subscription easier.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” Ms Khan said in a statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”

The latest lawsuit also follows another Amazon-related win by the agency at the start of June. Amazon agreed to pay a $25 million civil penalty to settle allegations that it violated a child privacy law for storing kids’ voice and location data recorded by its Alexa voice assistant. It also agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its doorbell camera Ring.

According to a news release sent by the agency, the FTC and states that joined the most recent lawsuit are asking the court to issue a permanent injunction court that they say would prohibit Amazon from engaging in its unlawful conduct and loosen its “monopolistic control to restore competition”.

“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” Ms Khan said.

Many had wondered whether the agency would seek a forced break-up of the retail giant, which is also dominant in cloud computing and has a growing presence in other sectors like groceries and health care. In a briefing with reporters, Ms Khan avoided making any comment about whether that would happen.

“At this stage, the focus is more on liability,” she said.