The tech giant is fighting accusations of antitrust and consumer protection violations. 

A lawsuit by the US Federal Trade Commission is set to force one of the largest retailers in the world to sell its assets. This landmark case is expected to be fist of many where regulation is expected to catch up on Big Tech monopolising the most lucrative parts of the internet. 

The government agency accuses the $1.3 trillion dollar company that it is fighting efforts by sellers on its marketplace to offer products more cheaply than other platforms. Amazon forces merchants to use its warehouses and delivery services, inflating costs for consumers and sellers. 

The result of this case would be one of two things. Either there will be a breakup of the status quo with Amazon forced to become a smaller company or Amazon could continue as normal. The decisions made here however would be instrumental in the future of tech monopolies and oligopolies. 

If the government agency is successful, it will show that government agencies can take these companies on and win. It won’t stop at Amazon pending possible cases could address Disney, Meta and Apple.

This comes as many anti-trust measures are being heavily investigated in Europe with charges pending against Meta and Apple.

Those who support the case believe it will mean lower prices and a better shopping experience, as Amazon will have more competitors for people’s business.

But Amazon vehemently denies any wrongdoing. 

What exactly is Amazon accused of?

The lawsuit accompanied by a complaint document alleges Amazon buries listings offered at lower prices on other sites. At the same time, it also charges sellers high fees, forcing merchants to raise their prices on the platform, as well as on other e-commerce sites in order to keep their products competitive on Amazon.

“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,” FTC Chairman Lina Khan said in the same statement.

The lawsuit had been expected after years of complaints that Amazon.com and other tech giants abused their dominance of search, social media and online retailing to become gatekeepers on the most profitable aspects of the internet.

“Left unchecked, Amazon will continue its illegal course of conduct to maintain its monopoly power,” the FTC said in its complaint which asked the court “to put an end to Amazon’s illegal course of conduct, pry loose Amazon’s monopolistic control, deny Amazon the fruits of its unlawful practices, and restore the lost promise of competition.”

The lawsuit also claims Amazon degrades customers’ experience by replacing relevant search results with paid advertisements, favouring its own brands over other products, while charging high fees that mean sellers can pay up to nearly half of their revenues to Amazon. 

According to the anti-monopoly organisation Institute for Local Self-Reliance, the cut sellers give to Amazon from their revenue is up from 35% in 2020 and 19% in 2014.