Vermont joins lawsuit against Amazon for illegally maintaining monopoly power

FTC, state partners initially filed the lawsuit in September 2023, seeking a permanent injunction in federal court

Vermont has joined the Federal Trade Commission and its state partners in the lawsuit against Amazon.com. The lawsuit, which was initially filed in September 2023 and recently amended to include Vermont, alleges that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.

“As Attorney General, I am committed to ensuring a healthy and competitive marketplace where Big Tech and small businesses all play by the same rules, and I have joined this lawsuit to hold Amazon accountable for flouting those rules,” said Attorney General Charity Clark. “In joining this lawsuit, we intend to end Amazon’s abusive and manipulative practices to protect consumers and small businesses nationwide.”

The lawsuit alleges that Amazon engages in a course of illegal exclusionary conduct that prevents current competitors from growing and new competitors from emerging. By stifling 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 far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers.

The FTC and states allege that Amazon’s anticompetitive conduct occurs in two markets — the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.

These tactics include anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet, and conditioning sellers’ ability to obtain “Prime” eligibility for their products (a virtual necessity for doing business on Amazon) on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms.

Amazon’s illegal, exclusionary conduct makes it impossible for competitors to gain a foothold. With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach.

Amazon has been accused of degrading the customer experience by replacing relevant, organic search results with paid advertisements, biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality, and charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.

The FTC along with its state partners initially filed the lawsuit in September 2023, seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.

This article is being shared by partners in The Granite State News Collaborative. For more information, visit collaborativenh.org.