The Federal Trade Commission has been given the green light by a judge: it will be able to pursue its complaint against Amazon for various abuses of a dominant position. The FTC expressed its satisfaction, while Amazon believes that the complaint has no merit because it would not take into account consumer habits.
A little over a year ago, we learned that the FTC had filed a complaint against Amazon involving 17 US states. The Federal Trade Commission (US equivalent of our DGCCRF) charged Amazon “ to exercise monopoly power to drive up prices, reduce quality and stifle innovation for consumers and businesses “.
The FTC’s allegations
The lengthy complaint (172 pages) listed various reasons. One of the biggest was that Amazon was accused of penalizing sellers and retailers who decided to sell their products cheaper elsewhere. The affected products would then have been pushed far down the search pages, reducing their visibility.
The FTC also accuses Amazon of foreclosing the market, particularly with the Prime mechanism. To achieve that, sellers and retailers must apply several rules, including those related to the “Fulfilled by Amazon” label. All this would lead to an increase in the prices of products that would also be sold elsewhere. In addition, the mechanism would make it difficult for other large platforms to come forward.
As a result, results pages would be distorted, prices higher and competition distorted. Especially since these aren’t the only issues raised by the complaint, as Amazon is also accused of favoring its own products in the results.
And that’s not all, because many retailers would find themselves paying almost 50% of their revenue to Amazon to pay various royalties and advertising costs.
Unsurprisingly, Amazon rejected everything outright, claiming that the procedure would lead to an increase in prices, a slowdown in deliveries and damage to businesses. The FTC was also accused of having “ radically removed from its mission of protecting consumers and competition “.
Green light from federal judge
Despite Amazon’s protests, the complaint will be able to proceed. In an order published on October 7th, we are told that Judge John Chun is allowing the Federal Trade Commission to proceed in court. So there will be a lawsuit.
There are also several important elements. Amazon thus sought to have the initial complaints based on the FTC Act and, in particular, the Sherman Act, dismissed. His requests were denied by the judge.
However, several of the complaints from the states were rejected. Each accused Amazon of violating its own laws. At the same time, several attorneys general joined the federal complaint, which could explain these rejections.
The FTC is satisfied
The case, which could become one of the largest antitrust cases in American history, will therefore be able to proceed, much to the delight of the FTC.
” We are pleased with the court’s decision and look forward to taking this case forward.” The way Amazon illegally maintains its monopolies and the harm they cause — including stifling competition and raising prices for buyers and sellers — will be on full display out during the trial “, declared Doug Farrar, spokesman for the FTC, as reported by the Associated Press.
At Amazon, we wish the Commission the best of luck. ” We’re sure these claims won’t hold water when the FTC has to prove them “, declared Tim Doyle, spokesman for Amazon. ” The truth is that Amazon’s practices are good for competition, consumers, and the small and medium-sized businesses that sell on our store, while the FTC’s approach would make shopping more difficult and expensive “.
The recent decision in no way prejudges the outcome of the proceedings.
