["Breaking up Amazon is key to repairing the online market and
opening the way for competition," said one expert. ]
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FTC HITS AMAZON WITH ‘ONE OF THE MOST IMPORTANT ANTITRUST CASES IN
US HISTORY’  
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Jessica Corbett
September 26, 2023
Common Dreams [[link removed]]

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_ "Breaking up Amazon is key to repairing the online market and
opening the way for competition," said one expert. _

, REUTERS/Pascal Rossignol

 

Economic justice advocates applauded on Tuesday as the Federal Trade
Commission and 17 states filed a sweeping antitrust lawsuit against
Seattle-based Amazon.com for illegally dominating the online retail
economy at the expense of consumers.

"Freedom of commerce is a fundamental liberty of American
democracy," declared
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Markets Institute executive director Barry Lynn in response to the
suit. "Today the FTC took a first step to restoring the liberty of
every individual and business who relies on essential internet
platforms to exchange goods, services, and ideas with one another."

Lynn praised the commission for "targeting some of the most egregious
abuses by Amazon of the dominant position it has acquired over vast
swaths of online commerce, and the corporation's routinized
manipulation of other people's business for its own private purposes."

The 172-page complaint
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out how Amazon has used a set of punitive and coercive tactics to
unlawfully maintain its monopolies," said
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Chair Lina Khan [[link removed]] in a
statement. "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."

The document—filed in a federal court in Washington state—alleges
that Amazon maintains "durable monopoly power" in the online
superstore and marketplace services markets, including by stifling
price competition and coercing sellers into using its fulfillment
service. The section on its algorithmic tool "Project Nessie" is
heavily redacted.

"Seldom in the history of U.S. antitrust law has one case had the
potential to do so much good for so many people," noted John Newman,
deputy director of the FTC's Bureau of Competition. States led by both
Democrats and Republicans—Connecticut, Delaware, Maine, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New
Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode
Island, and Wisconsin—joined the highly anticipated lawsuit.

Amazon—which was founded by Jeff Bezos, one of the richest people on
the planet, and is now the second-largest private employer in the
United States—swiftly pushed back on Tuesday.

David Zapolsky, the company's senior vice president of global public
policy and general counsel, claimed
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FTC case "is wrong on the facts and the law." He said the challenged
practices "have helped to spur competition and innovation across the
retail industry, and have produced greater selection, lower prices,
and faster delivery speeds for Amazon customers and greater
opportunity for the many businesses that sell in Amazon's store."

Meanwhile, critics of the company joined Open Markets in celebrating
the development—echoing praise
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in June, when the commission sued Amazon over its "yearslong effort to
enroll consumers into its Prime program without their consent while
knowingly making it difficult for consumers to cancel their
subscriptions."

Matt Stoller, director of research at the American Economic Liberties
Project, said Tuesday that "the FTC is right to challenge Amazon, a
company that appears to offer low prices under the guise of free
shipping but in fact inflates prices across the whole economy."

"In order to reach most online customers, sellers must sell through
Amazon. This market power enables Amazon to set the price floor on
almost every online retail item offered by sellers, extract a 50% cut
from each sale, and punish sellers who try to sell elsewhere at lower
prices," he explained. "At the same time, it leverages its dominance
to block rivals from entering the markets in which it offers services,
while its own marketplace is increasingly saturated with pay-to-play
junk ads."

"There's no such thing as 'free shipping' just as there's no such
thing as a free lunch, Amazon is just hiding from consumers how much
they have to pay," Stoller stressed. "Amazon is a monopoly, and we're
thrilled to see the FTC end its coercive tactics."

Stacy Mitchell, co-director at the Institute for Local
Self-Reliance—which has spent over a decade sounding the alarm about
the retail giant's practices—charged
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Amazon has been allowed to maintain a stranglehold on the online
market."

"The filing of this lawsuit is a victory for freedom and
self-governance; it marks a crucial rekindling of public authority to
check unaccountable private power," said Mitchell. "This is one of the
most important antitrust cases in U.S. history."

"Breaking up Amazon is key to repairing the online market and opening
the way for competition," she argued. "As this lawsuit shows, Amazon's
anti-competitive tactics largely hinge on leveraging the interplay
between its retail division, third-party marketplace, and logistics
operation. Separating them would eliminate Amazon's ability to
monopolize the market. We are encouraged that both the scope of this
case and the FTC's request for the court to consider structural
remedies show that the agency intends to tackle Amazon's monopoly
power at its root."

Demand Progress communications director Maria Langholz called the case
"long overdue," given the company's record of "shamelessly engaging in
exclusionary and unfair tactics to trap third-party sellers in its own
marketplaces, gouge them with predatory fees, and punish them for
trying to offer lower prices to consumers."

"This marks a historic step in challenging Amazon's abuse of its
market dominance and its anti-consumer, anti-worker, anti-small
business practices," Langholz said. Like Mitchell, she also suggested
that the suit should be "a catalyst for a broader conversation about
the need to break up Amazon as the best and most effective remedy."

_Jessica Corbett is a senior editor and staff writer for Common
Dreams._

* Amazon
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* FTC
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* Anti-trust
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* lawsuit
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