Proactive Investors - Amazon.com Inc (NASDAQ:AMZN) has been accused of operating a monopoly in a lawsuit filed by the US Federal Trade Commission and 17 US states, which the company said "would lead to higher prices and slower deliveries for consumers".
The FTC and 17 attorneys general filed a complaint alleging that the online retailer founded by Jeff Bezos illegally monopolizes online shopping, lowering quality and hiking prices for consumers.
Amazon's tactics "block competition, stunt rivals' growth, and cement its dominance", the lawsuit alleges.
It said there are a "set of anti-discounting tactics" employed "to prevent rivals from growing by offering lower prices".
The Fulfilment by Amazon service, it added, uses "coercive tactics" to prevent rivals from gaining the scale to meaningfully compete.
This interconnected strategy is used to "block off every major avenue of competition" in the online retail marketplace, the complaint said, including price, product selection, quality and innovation.
FTC chair Lina Khan said the e-commerce company is "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".
Amazon's head lawyer, David Zapolsky, said: "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."
Among many items in a further more detailed statement, he said the company will contest the lawsuit, and that the FTC’s complaint "grossly mischaracterizes the retail industry and the dynamic competition that consumers benefit from every day".
He said the FTC’s allegation that Amazon "somehow force sellers to use our optional services is simply not true", that fulfilment is "a best-in-class, very competitively-priced service that’s offered to businesses selling in our store at very competitive prices" and that it uses similar tools and practices as other retailers.