Amazon is being sued by U.S. regulators and and 17 states over allegations that the company abuses its position in the marketplace to inflate prices on other platforms, overcharge sellers and stifle competition.
The lawsuit, filed Tuesday in U.S. District Court for the Western District of Washington, is the result of a yearslong investigation into Amazon’s businesses and one of the most significant legal challenges brought against the company in its nearly 30-year history.and states that joined the lawsuit are asking the court to issue a permanent injunction court that they say would prohibit Amazon from engaging in its unlawful conduct and loosen its “monopolistic control to restore competition.
The complaint also says the company degrades the customer experience by replacing relevant search results with paid advertisements, biasing its own brands over other products it knows to be of a better quality and charging heavy fees that forces sellers to pay nearly half of their total revenues to Amazon.
The vast majority of third-party merchants also use the company’s fulfillment service to store inventory and ship items to customers. Amazon has been consistently raising fees for those reliant on the program and more recently imposed - and then abandoned- another fee on some who don’t, a move that was blasted by the company’s critics.
Amazon has also long faced allegations of undercutting businesses that sell on its platform by assessing merchant data and creating its own competing product that it then boosts on the site. In August, the company said it was eliminating some in-house brands that weren’t resonating with customers and would relaunch some items under existing brands like Amazon Basics and Amazon Essentials.
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