(The Center Square) – Online commerce giant Amazon said Tuesday that a lawsuit from the Federal Trade Commission could lead to higher prices and slower deliveries for customers.
The Federal Trade Commission and 17 state attorneys general filed a lawsuit Tuesday against Amazon.com Inc. alleging the company uses “anticompetitive and unfair strategies to illegally maintain its monopoly power.”
Amazon said the FTC was misusing its authority and that the agency failed to understand the retail marketplace.
“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” David Zapolsky, senior vice president of Global Public Policy and general counsel for Amazon, said in a statement. “The practices the FTC is challenging 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. 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.”
The complaint alleges that Amazon violates the law by engaging “in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”
The complaint alleges Amazon stifles 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 practices affect hundreds of billions of dollars in retail sales every year, according to the FTC.
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina Khan said 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.”
Amazon’s Zapolsky offered a full defense of the company’s practices in response.
“The FTC’s complaint alleges that our pricing practices, our Fulfillment by Amazon offering, and Amazon Prime are anticompetitive,” he wrote. “In so doing, the lawsuit reveals the Commission’s fundamental misunderstanding of retail.”