FTC teams up with 17 states to sue Amazon

Amazon.com Inc (NASDAQ: AMZN) is in focus today after the FTC along with 17 states filed an antitrust lawsuit against the tech behemoth.

Amazon accused of undermining competition

The Federal Trade Commission and the attorney generals of the respective states accused the multinational in their complaint of using unlawful means to undermine competition.

Amazon also taps on its monopoly to degrade quality and increase prices – tactics that not only hurt the shopping experience but also stifle innovation, they added.

Earlier this month, the European Union also tagged Amazon.com Inc as one of the “gatekeepers” under its Digital Markets Act. The retail giant generated $82.55 billion of sales (up 11% year-on-year) from its marketplace in its latest reported quarter.

Amazon stock has now lost more than 10% in about two weeks.

Amazon says these accusations are ‘wrong’

The Federal Trade Commission also blasted Amazon today for making sellers use its fulfilment services that are coupled with expensive fees to get the much-celebrated Prime badge.

Responding to the lawsuit, though, David Zapolsky – the general counsel of Amazon.com Inc said the accusations made against the company were flat out wrong.

If FTC gets its way, the result would be fewer products, higher prices, slower deliveries, and reduced options for small business – the opposite of what antitrust law is designed to do.

The stock market news arrives only days after Amazon said it will hire 250,000 new workers to prepare for the holiday demand (read more). Wall Street currently has a consensus “buy” rating on its stock.