© Reuters. FILE PHOTO: The Amazon logo at the company’s logistics center in Lauwin-Planque, northern France, February 20, 2017. REUTERS/Pascal Rossignol/File Photo
By Diane Bartz
WASHINGTON (Reuters) – The U.S. Federal Trade Commission filed a long-awaited antitrust lawsuit against Amazon.com (NASDAQ:) on Tuesday, asking the court to consider forcing the online retailer to sell assets as the government continues its fight to control in the Internet domain by Big tech.
The FTC said Amazon restricted discounts to retailers on its marketplace, stifling competition and forcing sellers to use its “fulfillment service,” a reference to its nationwide network of delivery vans and warehouses, which some say critics should separate from Amazon. web business.
The lawsuit was expected after years of complaints that Amazon.com and other tech giants abused their dominance in search, social media and online retail to become gatekeepers to the most lucrative aspects of the Internet.
The lawsuit, joined by 17 state attorneys general, follows a four-year investigation and federal lawsuits filed against Alphabet’s Google (NASDAQ ) and Meta Platforms’ Facebook (NASDAQ ).
The FTC said it was asking the court to issue a permanent injunction ordering Amazon.com to stop its illegal conduct. The lawsuit was filed in federal court in Seattle, where Amazon is headquartered.
“If left unchecked, Amazon will continue its unlawful conduct to maintain its monopoly power,” the FTC said in its complaint, asking the court to “end Amazon’s unlawful conduct, release Amazon’s monopoly control, deny Amazon Amazon the fruits of its illegal practices and restore the lost promise of competition.
The FTC complaint asked the court to consider “any preliminary or permanent equitable relief, including, but not limited to, structural relief, necessary to restore fair competition.”
In antitrust jargon, structural relief generally means that a company sells an asset, such as a part of its business.
Amazon said the FTC’s lawsuit was misguided and would harm consumers by resulting in higher prices and slower deliveries.
“The practices the FTC is challenging have helped spur competition and innovation throughout the retail industry, resulting in greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunities for the many companies that sell in the Amazon store,” said David Zapolsky, general counsel at Amazon.
Amazon shares fell 3.3%, although some investors saw upside.
“Either way, shareholders win. If the FTC loses its status quo, if the company is spun off, the sum of the parts will be greater than the whole, since the AWS (cloud) business will have a very high multiple. The analysts “They’ll find out soon, but for now it’s ‘shoot first, ask questions later,'” said Thomas Hayes, president of Great Hill Capital.
The FTC said Amazon, founded in 1994 and worth more than $1 trillion, punished sellers who tried to offer lower prices than Amazon by making it harder 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 its competitors also on the platform.
‘MONOPOLY POWER’
FTC Chairwoman Lina Khan said Amazon had used illegal tactics to defend itself against companies that would have risen to challenge its monopoly.
“Amazon is now exploiting that monopoly power to harm its customers, both the tens of millions of families who shop on Amazon’s platform and the hundreds of thousands of sellers who use Amazon to reach them,” he said.
Khan, while a law student, wrote about Amazon.com’s dominance in online retailing for “The Yale Law Journal” and was on the staff of the House committee that wrote a report published in 2020 that advocated controlling to four technology giants: Amazon.com. , Apple (NASDAQ:), Google and Facebook.
Amazon critics welcomed the lawsuit.
“No corporation has ever centralized so much power across so many crucial sectors. If left unchecked, Amazon’s power to dictate and control threatens the rule of law and our ability to maintain open and democratically governed markets,” said Stacy Mitchell of the Institute for Local Self. -Reliance, which has pushed for government action against Amazon.
The need to take action against Big tech has been one of the few ideas on which Democrats and Republicans have agreed. During the Trump administration that ended in 2021, the Justice Department and the FTC opened investigations into Google, Facebook, Apple and Amazon.
The Justice Department has sued Google twice: once during Republican Donald Trump’s term over its search business and the second time over ad technology since Democratic President Joe Biden took office. The FTC sued Facebook during the Trump administration, and Biden’s FTC moved forward with the lawsuit.
