US sues Amazon for allegedly running illegal monopoly in online retail

The US Federal Trade Commission has filed a long-awaited antitrust lawsuit against Amazon.com, charging the online retailer with harming consumers through higher prices in the latest US government legal action aimed at breaking Big Tech's dominance of the internet.

Tuesday's lawsuit had been expected after years of complaints that Amazon.com and other tech giants abused their dominance of search, social media and online retailing to become gatekeepers on the most lucrative aspects of the internet.

The lawsuit, which was joined by 17 state attorneys general, follows a four-year investigation and federal lawsuits filed against Alphabet's Google and Meta Platforms' Facebook.

"The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon," the agency said in a statement.

The FTC said that it was asking the court to issue a permanent injunction ordering Amazon.com to stop its unlawful conduct. The lawsuit was filed in federal court in Seattle, where Amazon is based.

Amazon shares were down 3 percent.

Monopoly power

Amazon said that the FTC lawsuit was wrongheaded and would hurt consumers by leading to higher prices and slower deliveries.

"The practices the FTC is challenging 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," said David Zapolsky, Amazon's general counsel.

The FTC said that Amazon, founded in 1994 and worth more than $1 trillion punished sellers that sought to offer prices that were lower than Amazon's by making it difficult for consumers to find the seller on Amazon's platform.

Other allegations include that Amazon gave preference to its own products on its platforms over competitors also on the platform.