Attorney General Ford Joins Federal Trade Commission and 16 Other States in Suit Against Amazon

Sep. 26, 2023

Carson City, NV – Today, Nevada Attorney General Aaron D. Ford announced that he has joined 16 of his colleagues and the Federal Trade Commission in a lawsuit against Amazon alleging that the online retail and technology company is a monopolist that has unlawfully maintained its monopoly power through a set of interlocking anticompetitive and unfair strategies. 

“Amazon is a mammoth corporation and like most of my constituents, I am also an Amazon customer. There is nothing inherently wrong with being a large company, but it is wrong to use your size and dominance to quash both current and potential competitors,” said AG Ford. “Competition is vital to our economy and a key element in the production of quality goods and services, which Nevada consumers expect and deserve. However, Amazon's conduct has negatively impacted numerous businesses and their consumers, thwarting competition.”  

According to state and federal enforcers, Amazon’s actions allow it to stop rivals and sellers from lowering prices; degrade quality for shoppers; overcharge sellers; stifle innovation; and prevent rivals from fairly competing against Amazon. 

    According to FTC Chair Lina M. Khan, the “complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies. The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power 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 businesses that rely on Amazon to reach them.”

    John Newman, Deputy Director of the FTC’s Bureau of Competition, added that “seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”

      The FTC and states allege Amazon’s anticompetitive conduct occurs in two markets — the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. These tactics include:

      • Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, which keeps prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
      • Conditioning sellers’ ability to obtain “Prime” eligibility for their products — a virtual necessity for doing business on Amazon — on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.

        With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach. This includes:

        • Degrading the customer experience by replacing relevant, organic search results with paid advertisements—and deliberately increasing junk ads that worsen search quality and frustrate both shoppers seeking products and sellers who are promised a return on their advertising purchase.
        • Biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality.
        • Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.

          The FTC and states are seeking a permanent injunction in federal court that would prohibit Amazon from further unlawful conduct and restore competition.

          This morning, the Commission voted 3-0 to file the action for a permanent injunction and other equitable relief in the U.S. District Court for the Western District of Washington. In joining the lawsuit, AG Ford joins the FTC and the attorneys general of Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

          Read a copy of the complaint.