{"id":14842,"date":"2023-09-26T01:55:30","date_gmt":"2023-09-26T08:55:30","guid":{"rendered":"https:\/\/worldcampaign.net\/?p=14842"},"modified":"2023-09-27T02:05:24","modified_gmt":"2023-09-27T09:05:24","slug":"us-government-and-17-states-sue-amazon-in-landmark-monopoly-case-cnn","status":"publish","type":"post","link":"https:\/\/worldcampaign.net\/?p=14842","title":{"rendered":"“US government and 17 states sue Amazon in landmark monopoly case”, CNN"},"content":{"rendered":"\n

By\u00a0Bri<\/a>an Fung, CNN, September 26, 2023<\/p>\n\n\n\n

The US government and 17 states are suing Amazon in a landmark monopoly case reflecting years of allegations that the e-commerce giant abused its economic dominance and harmed fair competition.<\/a><\/p>\n\n\n\n

\"A<\/figure>\n\n\n\n

A fast-moving conveyor moves packages to delivery trucks during operations on Cyber Monday at Amazon’s fulfillment center in Robbinsville, New Jersey, U.S., November 29, 2021.\u00a0Mike Segar\/ReutersCNN\u00a0\u00a0<\/p>\n\n\n\n

The groundbreaking lawsuit by the Federal Trade Commission and 17 attorneys general marks the government\u2019s sharpest attack yet against Amazon, a company that started off selling books on the internet but has since become known as \u201cthe everything store,\u201d expanding into selling a vast range of consumer products, creating a globe-spanning logistics network and becoming a powerhouse in other technologies such as cloud computing. <\/p>\n\n\n\n

The 172-page complaint<\/a> alleges Amazon unfairly promotes its own platform and services at the expense of third-party sellers who rely on the company\u2019s e-commerce marketplace for distribution. <\/p>\n\n\n\n

For example, according to the FTC, Amazon has harmed competition by requiring sellers on its platform to purchase Amazon\u2019s in-house logistics services in order to secure the best seller benefits, referred to as \u201cPrime\u201d eligibility. It also claims the company anticompetitively forces sellers to list their products on Amazon at the lowest prices anywhere on the web, instead of allowing sellers to offer their products at competing marketplaces for a lower price. <\/em><\/p>\n\n\n\n

That practice is already the subject of a separate lawsuit targeting Amazon filed by California\u2019s attorney general last year. <\/p>\n\n\n\n

Because of Amazon\u2019s dominance in e-commerce, sellers have little option but to accept Amazon\u2019s terms, the FTC alleges, resulting in higher prices for consumers and a worse consumer experience. Amazon also ranks its own products in marketplace search results higher than those sold by third parties, the FTC said.<\/p>\n\n\n\n

Amazon is \u201csquarely focused on preventing anyone else from gaining that same critical mass of customers,\u201d FTC Chair Lina Khan told reporters Tuesday. \u201cThis complaint reflects the cutting edge and best thinking on how competition occurs in digital markets and, similarly, the tactics that Amazon has used to suffocate rivals, deprive them of oxygen, and really leave a stunted landscape in its wake.\u201d<\/p>\n\n\n\n

The states involved in the case are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.<\/p>\n\n\n\n

Next steps in the case<\/h2>\n\n\n\n

The complaint was filed in the US District Court for the Western District of Washington, and seeks a court order blocking Amazon from engaging in the allegedly anticompetitive behavior.<\/p>\n\n\n\n

The FTC isn\u2019t ruling out a possible breakup of Amazon \u2014 nor the potential for individual executives to be named in a landmark antitrust case against the e-commerce giant, according to Khan. <\/p>\n\n\n\n

Speaking Tuesday just hours after the lawsuit was filed, Khan declined to say that the FTC would specifically seek a breakup as a remedy to Amazon\u2019s allegedly illegal monopoly. <\/p>\n\n\n\n

\u201cAt this stage, the complaint is really focused on the issue of liability,\u201d Khan said at the event hosted by Bloomberg News in Washington.<\/p>\n\n\n\n

But the agency\u2019s complaint, filed in Seattle federal court, suggests that any court order to address the issue could include \u201cstructural relief,\u201d a legal term referring to a potential breakup of Amazon. <\/p>\n\n\n\n

Asked about that request, Khan said the FTC is broadly interested in any relief that can effectively stop Amazon\u2019s allegedly anticompetitive behavior.<\/p>\n\n\n\n

\u201cUltimately, you will want to make sure that any remedy is halting the illegal conduct, preventing a recurrence and ensuring that Amazon is not able to profit and benefit from its illegal behavior,\u201d Khan said Tuesday afternoon. \u201cWhen we get to the issue of remedy, those are going to be the principles we\u2019ll be focused on.\u201d<\/p>\n\n\n\n

Khan also left open the possibility that Amazon executives could be held personally liable if there is sufficient evidence of their responsibility for Amazon\u2019s allegedly illegal conduct. <\/p>\n\n\n\n

\u201cWe want to make sure that we are bringing cases against the right defendants,\u201d Khan said in response to a question from CNN about whether the FTC considered naming specific executives in Tuesday\u2019s case. \u201cIf we think that there is a basis for doing so, we won\u2019t hesitate to do that.\u201d<\/p>\n\n\n\n

The suit makes Amazon the third tech giant after Google and Meta to be hit with sweeping US government allegations that the company spent years violating federal antitrust laws, reflecting policymakers\u2019 growing worldwide hostility toward Big Tech that intensified after 2016. The litigation could take years to play out. But just as Amazon founder Jeff Bezos and his spectacular wealth have inspired critics to draw comparisons to America\u2019s Gilded Age, so may the FTC lawsuit come to symbolize a modern repeat of the antitrust crackdown of the early 20th century. <\/p>\n\n\n\n

In a release, Khan accused Amazon of using \u201cpunitive and coercive tactics\u201d to preserve an illegal monopoly.<\/p>\n\n\n\n

\u201cAmazon 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,\u201d Khan said. \u201cToday\u2019s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.\u201d<\/p>\n\n\n\n

Amazon rejects Khan\u2019s logic<\/h2>\n\n\n\n

\u201cToday\u2019s suit makes clear the FTC\u2019s focus has radically departed from its mission of protecting consumers and competition,\u201dsaid David Zapolsky, Amazon\u2019s senior vice president of global public policy and general counsel. He said Amazon\u2019s practices have helped spur competition, innovation and selection across the retail industry. He argued that Amazon has fostered lower prices, faster delivery and helped small businesses sell their goods. <\/p>\n\n\n\n

\u201cIf the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses \u2014 the opposite of what antitrust law is designed to do,\u201d he said. \u201cThe lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.\u201d<\/p>\n\n\n\n

In a subsequent blog post<\/a>, Zapolsky warned that the FTC suit could not only force Amazon to list products at a higher price point than on rival marketplaces, but also that it could raise Amazon\u2019s costs of doing business \u2014 costs that may then be passed along to consumers in the form of higher Amazon Prime subscription prices or slower shipping times. <\/p>\n\n\n\n

\u201cWe respect the role the FTC has historically played in protecting consumers and promoting competition,\u201d the blog post said. \u201cUnfortunately, it appears the current FTC is radically departing from that approach, filing a misguided lawsuit against Amazon that would, if successful, force Amazon to engage in practices that actually harm consumers and the many businesses that sell in our store\u2014such as having to feature higher prices, offer slower or less reliable Prime shipping, and make Prime more expensive and less convenient.\u201d<\/p>\n\n\n\n

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\"Detail<\/a><\/figure>\n\n\n\n

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Amazon is bringing ads to Prime Video and will charge you to avoid them<\/a><\/p>\n\n\n\n

For years, Amazon\u2019s critics including US lawmakers, European regulators, third-party sellers, consumer advocacy groups and more have accused the company of everything from mistreating its workers to forcing its third-party sellers<\/a> to accept anticompetitive terms. Amazon has unfairly used sellers\u2019 own commercial data against them, opponents have said, so it can figure out what products Amazon should sell itself. And the fact that Amazon competes with sellers on the very same marketplace it controls represents a conflict of interest that should be considered illegal, many of Amazon\u2019s critics have said. <\/p>\n\n\n\n

But Tuesday\u2019s FTC suit is more narrowly focused, taking aim at Amazon\u2019s behavior in two specific markets: an \u201conline superstore\u201d market, in which its conduct allegedly harmed shoppers; and an \u201conline marketplace services\u201d market serving independent sellers. Amazon\u2019s deliberate self-preferencing of its own products in search results is an outgrowth of the underlying anticompetitive behavior at issue in the case, said John Newman, deputy director of the FTC\u2019s competition bureau. <\/p>\n\n\n\n

A defining moment for Lina Khan<\/h2>\n\n\n\n

The lawsuit represents a watershed moment in Khan\u2019s career. She is widely credited with kickstarting antitrust scrutiny of Amazon in the United States with a seminal law paper in 2017. She later helped lead a congressional investigation into the tech industry\u2019s alleged competition abuses, detailing in a 450-page report<\/a> how Amazon \u2014 as well as Apple, Google and Meta \u2014 enjoy \u201cmonopoly power\u201d and that there is \u201csignificant evidence\u201d to show that the companies\u2019 anticompetitive conduct has hindered innovation, reduced consumer choice and weakened democracy. <\/p>\n\n\n\n

The investigation led to a raft of legislative proposals aimed at reining in the companies, but the most significant ones have stalled under a barrage of industry lobbying and decisions by congressional leaders not to bring the bills up for a final vote. <\/p>\n\n\n\n

Lawmakers\u2019 inaction has left it to antitrust enforcers to police the tech industry\u2019s alleged harms to competition. In 2021, President Joe Biden stunned many in Washington when he tapped Khan not only to serve on the FTC but to lead the agency, sending a signal that he supported tough antitrust oversight. <\/p>\n\n\n\n

Since then Khan has taken an aggressive enforcement posture, particularly toward the tech industry. Under her watch, the FTC has sued to block numerous tech acquisitions, most notably Microsoft\u2019s $69 billion deal to acquire video game publisher Activision Blizzard. It has moved to restrict how companies may collect and use consumers\u2019 personal information, and warned them of the risks of generative artificial intelligence. <\/p>\n\n\n\n

Mounting monopoly scrutiny<\/h2>\n\n\n\n

Throughout, the FTC has scrutinized Amazon \u2014 suing the company<\/a> in June for allegedly tricking millions of consumers into signing up for Amazon Prime and reaching multimillion-dollar settlements<\/a> in May with the company over alleged privacy violations linked to Amazon\u2019s smart home devices. <\/p>\n\n\n\n

But the latest suit against Amazon may rank as the most significant of all, because it drives at the heart of Amazon\u2019s e-commerce business and focuses on some of the most persistent criticisms of the company. <\/p>\n\n\n\n

In one heavily redacted portion of the FTC lawsuit, agency attorneys cryptically described Project Nessie, an \u201calgorithm\u201d and \u201cpricing system\u201d that has allegedly \u201cextracted\u201d an undisclosed amount of value \u201cfrom American households.\u201d It is unclear what Project Nessie is or how it works, but the FTC alleges in the complaint that the company\u2019s program \u201cbelies its public claim that it \u2018seek[s] to be Earth\u2019s most customer-centric company.\u2019\u201d Amazon didn\u2019t immediately respond to CNN\u2019s questions about Project Nessie.<\/p>\n\n\n\n

In a sign of how threatening Amazon perceived Khan\u2019s ascent to be, the company in 2021 called for her recusal from all cases involving the tech giant. <\/p>\n\n\n\n

Khan has resisted those calls. And in remarks to reporters this week, Khan deflected questions about her past work on Amazon, praising the efforts of FTC staff in completing the agency\u2019s investigation. On Tuesday, the FTC said it held a unanimous 3-0 vote authorizing the lawsuit; Khan was among those voting to proceed.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Brian Fung, CNN, September 26, 2023 The US government and 17 states are suing Amazon in a landmark monopoly case reflecting years of allegations that the e-commerce giant abused its economic dominance and harmed fair competition. A fast-moving conveyor moves packages to delivery trucks during operations on Cyber Monday at Amazon’s fulfillment center in Robbinsville, […]<\/p>\n","protected":false},"author":1001004,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"_links":{"self":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/14842"}],"collection":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/users\/1001004"}],"replies":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14842"}],"version-history":[{"count":1,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/14842\/revisions"}],"predecessor-version":[{"id":14843,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/14842\/revisions\/14843"}],"wp:attachment":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}