HARRISBURG, Pa. (WTAJ) — Pennsylvania has joined numerous other states in a Federal Trade Commission (FTC) lawsuit against the online retail giant Amazon.
Pennsylvania Attorney General Michelle Henry announced that PA joined the FTC and 16 other states in a lawsuit against Amazon and their “monopolistic practices” she said are detrimental to sellers and buyers.
The complaint alleges that Amazon’s actions prevent competitors from growing and/or emerging.
According to Henry, it’s alleged that Amazon manipulates search results to showcase Amazon products, limiting views of cheaper products that might actually be of a higher quality. It’s also alleged that Amazon charges fees of up to half of the seller’s revenue to be on their platform.
“Our intention is never to stifle innovation, but we have an obligation – one I take very seriously – to protect Pennsylvanians from the consequences of bad business practices, and anti-competitive behavior is a bad business practice that hurts consumers,” Attorney General Henry 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,” Amazon General Counsel David Zapolsky said in a prepared statement given to The Hill.
The FTC and states allege 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. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
- 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. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.
The FTC, along with Pennsylvania and other state partners, are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and restore 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 Commission’s lawsuit.