The Federal Trade Commission and 17 state attorneys general from mostly Democrat-run states today sued Amazon.com, alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.
This action comes on the same time the Alaska delegation announced that Sens. Lisa Murkowski and Dan Sullivan oppose the merger of grocery chains Kroger and Albertsons. Rep. Mary Peltola was early in her opposition to the merger, which could effect Fred Meyer, owned by Kroger, and Safeway/Carrs, owned by Albertsons.
Surprisingly, Washington state is also run by Democrats but is the corporate home of Amazon, and did not join in the lawsuit.
Amazon is used heavily by Alaskans and is expanding its corporate footprint in the state, where cargo comes through the Ted Stevens Anchorage International Airport.
The company will be opening its first sorting facility in Anchorage in 2024, to be housed in a now-vacant Midtown warehouse that was once used by Sears, a once mighty company that declared bankruptcy in 2018 and reorganized into a small, 12-store company.
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 complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.
By stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance. Amazon’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan. “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. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”
“We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition. “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”
The FTC and states allege Amazon’s anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. These tactics include:
- Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
- Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.
Amazon’s illegal, exclusionary conduct makes it impossible for competitors to gain a foothold, the litigants say. With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach. This includes:
- Degrading the customer experience by replacing relevant, organic search results with paid advertisements—and deliberately increasing junk ads that worsen search quality and frustrate both shoppers seeking products and sellers who are promised a return on their advertising purchase.
- Biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality.
- Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.
The FTC, along with its state partners, are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.
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 Commission’s lawsuit.
The Commission vote to authorize staff to file for a permanent injunction and other equitable relief in the U.S. District Court for the Western District of Washington was 3-0.
Call BS
Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon
Item: New Lovecraft Circle [Hardcover] [1996] Price, Robert M.; Wilson, Gahan
Condition: Collectible – Very Good
SKU: 3R-3AWU-UKQW
Quantity: 1
Order date: 09/18/2023
Price: $26.23
Tax: $2.15
Shipping: $3.99
Shipping tax: $0.33
Amazon fees: -$7.32
Marketplace Facilitator Tax: -$2.15
Marketplace Facilitator Shipping Tax: -$0.33
Your earnings: $22.90
If all this is true, I suppose the guvmint action is a good thing, but only time will tell.
BTW, what’s the difference between anything noted in this article and what Microsoft did through the 90s and 00s? You want to use a computer to do anything, You have your choice of (effectively) one of two lamestream operating systems and that, in part, because Billy G bailed out Apple when they hit a real weak spot a decade or so ago.
I guess we just need to ‘stay tuned’ on this one.
This puzzles me, aren’t people free to choose where they want to buy their products? I always check others places for both availability and price, which in AK includes cost of shipping, prior to purchase.
Besides, for those who do make trips to the lower ’48, try and do your shopping while you’re down there..AK Airlines, though there are many who detest the airlines does allow an extra suitcase(free).I use this for getting items..
The shopping landscape has changed. There is no easier way to shop than Amazon, just search, point, and click. In many ways, Democrats have paved the way. It’s often not safe to go shopping in blue cities and malls due to crime and the homeless camped out in parking lots.
Dude, try walmart.com, tractor supply, harbor freight or any other dot com store. PS..
They all ship
They do not ship free.
Order anything that weighs more than a few ounces from any of those places, and the shipping often exceeds the cost of the product.
Net result, Amazon gets the business.
Only if you pay for Prime. And many waive fees for purchases over a certain amount.
I’m still puzzled at why so much of the market was ceded to Amazon on this point. TSC and others could drop or eliminate shipping fees if they were serious about competing.
Often I find any of those cheaper than Amazon including shipping.
Any more, I use ebay most of the time.
I can’t remember where I heard (x22 Reports maybe?) that the left is playing this suing game where they sue their own. I cannot remember what the benefit was – was it to make themselves look good and profiting through laundering or something? It just seem crazy; but, now that I see this headline, I am beginning to think that it is true.
If we don’t watch out we will only have a few places IE Amazon, Walmart, target, one big bank to buy things and live. It will be a monopoly.
I do shop on Amazon but only when I cannot find something locally, which sadly is quite often. I think one of their biggest features is convenience. Local businesses, particularly the big box chains, would do well to improve their customer service and accessibility. Their online service is sketchy and does not clearly show what is in stock at the local stores, and when you call good luck talking to a person. If you luck out and do get to speak to someone it is a huge production getting any answers. A better system of communication to customers would make them more competitive. Case in point – I recently needed a 50’ USB cable. I did not want to drive to Anchorage and I won’t shop at Walmart. I tried calling, went on line – no humans ever answered and the websites were order only, with shipping. I did end up ordering from Office Depot but spent a lot of time in my effort to buy local and I never was able to determine if it was in stock in Anchorage.
Living in SE, Amazon is nearly a basic necessity. We try to shop locally as we can, but in a place like Hoonah with only one or two stores, one does as one must
Newsflash.. If you don’t like what a company is doing, DON’T SHOP THERE! My God these Liberal states are riddled with the same whiny people.. No one is making you shop with Amazon!
As a business owner myself, I am all bout shopping locally but we all know that things aren’t always available locally and Amazon has opened up a whole new world to the consumer. That being said, anyone too lazy to look beyond Amazon deserves to pay what they charge. If you look on more than one page you often find that Amazon isn’t the best deal. As Cindy said above, aren’t people free to shop still? Its supposed to be called free enterprise. Maybe not eh komrade.
Perhaps this is FTC going too far. Any business that has their own website is capable of selling their own products online, and many do. I’ve found Amazon’s prices, including shipping, to be mostly competitive, at least on the stuff I buy from them. Kroger/Fred Meyer charging $9.99 for a box of pilot crackers when Walmart has ’em for $7.49 is price gouging – and they want to buy up their competitors…
Breaking up Amazon will drive prices up, not down, as the efficiency of size and convenience will be removed.
BTW, Amazon Prime jet lands in Fairbanks each night about 11:00PM.
When & how did Jeff Bezos piss off brandon and the dems? It’s a political year… Another distraction.
I think that this is all by design. What we think they are doing by suing Amazon probably is not what is really happening. The globalists are manipulating them to manipulate us or manipulating us to manipulate us.
This may be taken seriously when Microsoft, Apple, Google, AT&T, Verizon, the airline industry, social media giants, the rest of Big Tech, Big Insurance, Big Pharma, Big Defense contractors, mainstream media, the medical industry, Dominion Voting Systems, Big Labor Unions, and cable TV companies (did we miss anyone?) are also sued by FTC and Democrat-run states for monopolist powers and practices.
.
Otherwise, could this be a really cool idea to disguise an epic Democrat Party campaign contribution as a “settlement”?
.
Does it not seem reasonable to expect all or most of the anticipated “settlement” to land, properly laundered, in Democrat Party coffers?
.
Can’t happen here? Who or what prevents it from happening?
I assumed Jeff Bezo is a Democrat. He acts like one, talks like one, dresses like one. What’s the back story why are Democrats are going after his company. This is another way example of eating their own.
How do they dress?
It’s about time, they get sued.. monopolizing every other store and then charging for hideous extra fees.
When did politicians ever care about the price consumers pay for products? Maybe the businesses that are being targeted lately are not paying enough bribery money to the political party in power. No, not maybe. And labor union standings are definitely a large factor as well. This is a political war against free enterprise and not a big surprise. It has already begun at local level by making the permitting process extremely difficult without political bribery. And the businesses that are not sanctioned are purposely targeted by MOA inspections with increased frequency from a thick rule book open to interpretation. Anchorage is not a place for a conservative to start or run a business for these reasons. Amazon should consider putting their new facility in the Valley.
You know, I remember when Microsoft was perhaps the only major company that spent nothing on politics. Pennies maybe.
Then the Clinton (if I remember correctly) sicked the FTC on them. Now they are a MAJOR political donor, mostly to Dems.
.
Not saying the same thing is happening now, but… History may not repeat, but it often rhymes.
hippie crits…
They said the same things about Walmart.
My issues with Amazon have to do with their disregard to ‘quality goods’ and ‘shop local’ so that their pricing is prinicipally ‘shipping’ and ‘handling’ charges. It seems to me the main reason they became so successful was the ‘structure’ of how they were able to arrange carriers to expedite handling and transport of goods quickly from wherever in a highly competitive fashion. When effects of an extensive and overly compelled transportation network was realized by drivers working overtime. Then, aggressive marketing and successful results propelled the company’s reach and growth on the basis of sheer volume of sales.
I recall reading Readers Digest articles about how hard the UPS and FedEx drivers worked to facilitate transport of their packages. When Amazon was able to compel priority shipping through UPS and FedEx services, and location of goods warehouses facilitates fast shipping, then it’s pure capitalism, especially driven by ‘suggestions’ interwoven in online marketing fads.
Any company that provides an extensive array of products that can quickly provide them to consumers, can be an Amazon, but first it has to be able to ensure to its stockholders that it will have the customer base, and they’ve an unfair advantage due to their monopolization of shipping (locating warehouses along major highway routes and in locations that places that provide ‘subsidization’ for workers, lucrative contracts with UPS and FedEx, postal box delivery sites), access to product in large volume (at discount prices, to be able to turn around and sell at competitive prices), wage and compensation for a very large workforce, as well as advertising advantages.
Amazon is a monopoly because they ‘own’ the whole kit and kaboodle.
Ha ha. Bezos political contributions lacking. ???
I was surprised to see Walmart and Amazon so close in financial standing. On Forbes. I figured amazon would dwarf Walmart. Not so
Amazon Prime has done more good for Alaskans than any other retailer in history. I happily shop Amazon to give the finger to L48 web retailers that charge $35 to ship a $3 spark plug to AK and to the local retailers that price gouge and have sparse inventory. So many times I have gone to a local retailer in ANC, they don’t have what I need … so I walk out and order it off Amazon from my car in their parking lot.
Comments are closed.