Amazon sued by FTC and 17 states for violating competition rules

Highlights

• States have filed a lawsuit against Amazon, accusing the company of breaking competition rules. This marks one of the most serious allegations made by the US government against the tech giant.

• The lawsuit claims that Amazon unfairly promotes its own products and services, which harms third-party sellers who rely on the company’s online marketplace.

• According to CNN, the complaint suggests that Amazon disrupted fair competition by obliging platform sellers to buy certain internal services to access the “Prime” benefits offered to top sellers.

• The accusations also highlight how Amazon allegedly compels sellers to list their products at the lowest prices on its platform, instead of allowing them to offer their products at lower prices on competing platforms.

17 states in the US are taking Amazon to court because they believe Amazon broke the rules about fair competition. This is a big deal because it’s one of the strongest actions the US government has taken against Amazon.

The states and the US government say that Amazon did unfair things to promote its own products and services on its website, which hurt other companies that sell things there.

One thing they say Amazon did was make sellers pay for certain services on its website if they wanted to get special benefits called “Prime” benefits. They also say Amazon made sellers sell their products at the lowest prices on Amazon, even if they wanted to sell them for less on other websites.

Last year, California also sued Amazon for doing similar things.

Because Amazon is so big in online shopping, the people who sell things on its website don’t have much choice but to agree to Amazon’s rules. This, they say, leads to higher prices for people buying things and makes their shopping experience worse. Also, they say Amazon shows its own products at the top of search results more often than products from other sellers.

The 17 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.

The complaint they filed asks the court to make Amazon stop these actions that they see as anti-competitive.

The Federal Trade Commission, which is part of the US government, hasn’t ruled out the possibility of breaking up Amazon in the future or taking legal action against Amazon’s top executives in an antitrust case.