These are years of investigations and tensions between political powers and Amazon. And they are not about to calm down. The American competition authority (FTC) and 17 states filed a complaint on Tuesday September 26 against the technology giant, accusing it of “illegally maintaining its monopoly” thanks to “anti-competitive and unfair strategies”.
“It is not the size of Amazon that is at issue,” the FTC clarified in a press release, but its “illegal methods which aim to exclude competitors, to prevent them from developing and to prevent alternatives from emerging” . According to the federal agency, Amazon, for example, discourages sellers from offering prices lower than its own on products where the Seattle group competes with retailers.
The authority also criticizes the American giant for making merchants’ eligibility for “Prime” – a subscription which allows consumers to have them delivered quickly – conditional on the use of Amazon’s “expensive” logistics services.
The FTC’s charge against Amazon
Quoted in a press release, Lina Khan, president of the FTC, does not mince her words against Amazon. The tech giant “exploits the power it derives from its monopoly 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 companies that depend on Amazon” to market their products, she asserts.
“The complaint filed today clearly shows that the FTC has radically departed from its mission to protect consumers and competition,” responded David Zapolsky, a vice president of Amazon, in an online statement. He assures that the practices questioned by the authority have on the contrary “contributed to stimulating competition and innovation throughout the retail sector, and have made it possible to offer greater choice, lower prices lower prices and faster delivery times to Amazon customers.
The American group, which achieved $134.4 billion in turnover and generated a net profit of $6.7 billion in the second quarter of this year, regularly highlights the increase in sales made by merchants on its platform. In 2022, “more than 60% of sales on Amazon came from independent sellers, the majority of whom are small and medium-sized businesses,” the company said last August.
A balance of power unfavorable to SMEs
If the FTC wins, it “will force Amazon to apply measures that harm consumers and SMEs,” assures David Zapolsky. But for many NGOs, SMEs suffer on the contrary from an unfavorable balance of power. “SMEs have been waiting for this moment for a very long time,” commented Stacy Mitchell, co-director of the Institute for Local Self-Reliance, which campaigns for local and environmentally friendly consumption, on Tuesday.
“By controlling market access, Amazon can prioritize its own products if it wants, spy on companies for their best ideas and data. It can lay down the law and govern with stunning contempt. One day, she gives a seller the ‘delivery within 24 hours’ option. The next day, she suspends his account, completely wiping out his sales. The platform represents 37.6% of online sales in the United States according to Insider intelligence, far ahead of Walmart supermarkets (6.8%), Apple (3.5%) and eBay (3.1%).
Many American elected officials and the Democratic government of Joe Biden have been trying for years to fight against the “monopolies” of technological giants, with little success. This summer, the FTC had to suspend its procedure to block the acquisition of Activision Blizzard (video games) by Microsoft, after a series of legal setbacks.
Lina Khan, chair of the FTC since 2021, became known when she was still a student, with an article entitled “The Amazon Antitrust Paradox”, published in 2017 in the Yale University Law Review. She considered that the American legislative arsenal was insufficient to fight against the monopolistic practices of groups like Amazon.
In June 2021, the company submitted a complaint to the FTC, accusing its manager of lack of impartiality. But that hasn’t stopped the federal agency from moving forward on several fronts. In June 2023, the FTC filed a complaint against Amazon for “tricking consumers” with its Prime subscription, which renews automatically and is “complicated” to cancel. The institution also attacked the group over respect for data confidentiality. Last May, Amazon agreed to pay more than $30 million to end lawsuits against Ring and Alexa (connected doorbells and speakers, security cameras), two product lines that collect a lot of information about their users.