Protesters shine a light reading “Amazon workers rising” on the retail giant’s fulfillment center in Shakopee during a worker rally for higher wages in December 2022. Photo by Max Nesterak/Minnesota Reformer.
Minnesota, 16 other states and the Federal Trade Commission are suing the online retail giant Amazon for allegedly protecting its own retail monopoly with anticompetitive strategies.
The lawsuit, filed in the U.S. District Court for the Western District of Washington, says Amazon has used its monopoly power to stifle competition and innovation, decrease product quality and inflate prices.
Minnesota Attorney General Keith Ellison said he joined the lawsuit because Amazon shouldn’t get away with breaking the law simply because it’s “big and powerful.”
“Millions of Minnesotans shop on Amazon, and large and small Minnesota businesses sell on Amazon’s marketplace as well,” Ellison said in a statement. “But Amazon’s illegal conduct has significantly stifled competition for much of the online economy and has driven up the cost of shopping — and selling — on Amazon for everyone.”
The FTC and the coalition of states allege that Amazon’s anticompetitive strategies occur in its online superstore market and for online services purchased by sellers.
According to the suit, Amazon punishes sellers and deters other online retailers from offering lower prices than Amazon. In addition, for a seller to obtain “Prime” shipping eligibility for their products, they must use Amazon’s fulfillment services, which is costly. The high price to obtain Prime eligibility makes it more expensive for sellers to offer their products on other platforms.
The lawsuit is the federal government’s most significant challenge to Amazon to date. It’s also the latest tech company to face government scrutiny for monopolistic practices, joining other tech giants like Meta and Google.
Amazon didn’t immediately respond to the Reformer’s request for comment, but David Zapolsky, Amazon’s general counsel, denied the lawsuit’s allegations to the New York Times, stating the FTC “is wrong on the facts and the law.”
“If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do,” he told the Times.
The lawsuit states that Amazon’s monopoly power has made it difficult for competitors to succeed, which worsens a customer’s experience. For example, customers are seeing an increase in paid advertisements instead of organic searches and a bias toward Amazon’s own products in search results, according to the lawsuit.
The FTC and the 17 states that joined the suit are asking the federal court for a permanent injunction that would restrict Amazon from engaging in its alleged unlawful conduct and reduce its monopolistic control.
Ellison is encouraging Minnesota consumers and businesses who want to report concerns about antitrust business practices to submit a report online or call the Attorney General’s Office at 651-296-3353 for the metro area or 800-657-3787 for greater Minnesota.
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