Economic justice advocates applauded on Tuesday as the Federal Trade Commission and 17 states filed a sweeping antitrust lawsuit against Seattle-based Amazon.com for illegally dominating the online retail economy at the expense of consumers.
“Freedom of commerce is a fundamental liberty of American democracy,” declared Open Markets Institute executive director Barry Lynn in response to the suit. “Today the FTC took a first step to restoring the liberty of every individual and business who relies on essential internet platforms to exchange goods, services, and ideas with one another.”
Lynn praised the commission for “targeting some of the most egregious abuses by Amazon of the dominant position it has acquired over vast swaths of online commerce, and the corporation’s routinized manipulation of other people’s business for its own private purposes.”
The 172-page complaint “lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina Khan in a statement. “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.”
The document — filed in a federal court in Washington state — alleges that Amazon maintains “durable monopoly power” in the online superstore and marketplace services markets, including by stifling price competition and coercing sellers into using its fulfillment service. The section on its algorithmic tool “Project Nessie” is heavily redacted.
“Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people,” noted John Newman, deputy director of the FTC’s Bureau of Competition. States led by both Democrats and Republicans — 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 highly anticipated lawsuit.
Amazon — which was founded by Jeff Bezos, one of the richest people on the planet, and is now the second-largest private employer in the United States — swiftly pushed back on Tuesday.
David Zapolsky, the company’s senior vice president of global public policy and general counsel, claimed the FTC case “is wrong on the facts and the law.” He said the challenged practices “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.”
Amazon's monopoly is bad for America — for the economy, society, politics, consumers and workers.
— Robert Weissman (@Rob_Weissman) September 26, 2023
Today's FTC lawsuit is vitally important to buttress democracy and economic justice.
Meanwhile, critics of the company joined Open Markets in celebrating the development — echoing praise for FTC in June, when the commission sued Amazon over its “yearslong effort to enroll consumers into its Prime program without their consent while knowingly making it difficult for consumers to cancel their subscriptions.”
Matt Stoller, director of research at the American Economic Liberties Project, said Tuesday that “the FTC is right to challenge Amazon, a company that appears to offer low prices under the guise of free shipping but in fact inflates prices across the whole economy.”
“In order to reach most online customers, sellers must sell through Amazon. This market power enables Amazon to set the price floor on almost every online retail item offered by sellers, extract a 50% cut from each sale, and punish sellers who try to sell elsewhere at lower prices,” he explained. “At the same time, it leverages its dominance to block rivals from entering the markets in which it offers services, while its own marketplace is increasingly saturated with pay-to-play junk ads.”
“There’s no such thing as ‘free shipping’ just as there’s no such thing as a free lunch, Amazon is just hiding from consumers how much they have to pay,” Stoller stressed. “Amazon is a monopoly, and we’re thrilled to see the FTC end its coercive tactics.”
Biden on the strike line, and the 17 states and FTC suing Amazon, good day for economic justice.
— Zephyr Teachout (@ZephyrTeachout) September 26, 2023
Stacy Mitchell, co-director at the Institute for Local Self-Reliance — which has spent over a decade sounding the alarm about the retail giant’s practices — charged that “for too long Amazon has been allowed to maintain a stranglehold on the online market.”
“The filing of this lawsuit is a victory for freedom and self-governance; it marks a crucial rekindling of public authority to check unaccountable private power,” said Mitchell. “This is one of the most important antitrust cases in U.S. history.”
“Breaking up Amazon is key to repairing the online market and opening the way for competition,” she argued. “As this lawsuit shows, Amazon’s anti-competitive tactics largely hinge on leveraging the interplay between its retail division, third-party marketplace, and logistics operation. Separating them would eliminate Amazon’s ability to monopolize the market. We are encouraged that both the scope of this case and the FTC’s request for the court to consider structural remedies show that the agency intends to tackle Amazon’s monopoly power at its root.”
Demand Progress communications director Maria Langholz called the case “long overdue,” given the company’s record of “shamelessly engaging in exclusionary and unfair tactics to trap third-party sellers in its own marketplaces, gouge them with predatory fees, and punish them for trying to offer lower prices to consumers.”
“This marks a historic step in challenging Amazon’s abuse of its market dominance and its anti-consumer, anti-worker, anti-small business practices,” Langholz said. Like Mitchell, she also suggested that the suit should be “a catalyst for a broader conversation about the need to break up Amazon as the best and most effective remedy.”
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
Last week, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy