The Federal Trade Commission (FTC) and 17 states sued Amazon.com Inc on Tuesday, accusing the online retailer of illegally using monopoly power to artificially inflate prices, bind sellers to its platform and hurt competitors.
The FTC's lawsuit, filed in federal court in Seattle, marks a milestone in the Biden administration's aggressive enforcement of antitrust laws and has been expected to be filed for months. Lina Khan, the chairman of the FTC and a longtime critic of Amazon, wrote in the Yale Law Journal in 2017 that previous generations of antitrust regulators and courts abandoned their legal interest in conglomerates like Amazon.
The FTC and the states accuse Amazon of violating antitrust laws by using anti-discounting measures to punish merchants who offer lower prices elsewhere. According to the FTC, the Biden administration argued that sellers on Amazon must use Amazon's logistics service if they want their goods included in Amazon Prime, a subscription program that offers benefits including faster delivery times.
The FTC also said sellers felt forced to use services like Amazon's ads to succeed on the platform. Khan said at a media briefing on Tuesday that by charging for logistics, advertising and other services, "Amazon is now taking half of the seller's revenue."
Amazon has said that products fulfilled through its logistics network generally give customers a better experience than those fulfilled through other means.