A surprise lawsuit sent shockwaves through the industry today as the Federal Trade Commission (FTC) and 17 state attorneys filed a complaint against Amazon in the U.S. District Court for the Western District of Washington.
The suit alleges that the retail and tech giant “is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.” According to the FTC, it isn’t Amazon’s size that is of issue, but its “exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”
Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies. 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.”
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 FTC’s lawsuit.
“By stifling competition on price, product selection, and 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,” the FTC says.
The allegations outlined in the FTC complaint include anti-discounting measures, manipulation of organic search results, and forcing fees upon Amazon sellers that they are required to pay in order to stay in business.
For the toy industry, Amazon is an important partner which means the proceedings will be watched closely by many.
The entire 172-page complaint can be read here.
