The Federal Trade Commission and 17 states accused Amazon on Tuesday of illegally protecting a monopoly over swathes of online retail by squeezing merchants and favouring its own services, in the government’s most significant challenge to the power of the e-commerce giant and one that could alter the way Americans shop online for everything from toilet paper to electronics.

In a highly anticipated lawsuit, the FTC and state attorneys general from New York and other states said Amazon had stopped merchants on its platform from offering lower prices elsewhere and forced them to ship products with its logistics service if they wanted to be offered as part of its Prime subscription bundle. Those practices led to higher prices and a worse shopping experience for consumers, the agency and states said.

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said Lina Khan, the chair of the FTC.

The lawsuit put the influence and reach of Amazon, a $1.3 trillion behemoth, squarely in the spotlight after years of mounting scrutiny. Founded by Jeff Bezos in 1994, the one-time upstart online bookseller has grown into a sprawling conglomerate with tentacles in retail, Hollywood and the foundational infrastructure of the Internet.

Now Amazon, the US’s second-largest private employer, has become the latest Big Tech company to face off against the government over monopoly concerns, just as the justice department has entered the third week of an antitrust trial challenging Google over its power in online search. The FTC has also brought an antitrust lawsuit against Meta.

The new lawsuit pits Amazon directly against Khan. She rose to fame as a Yale law student in 2017 when she published a paper arguing that US antitrust laws had failed to adequately stop Amazon.

New York Times News Service