The government of the United States has filed a lawsuit against Amazon, claiming that the internet retailer illegally maintains its monopoly position.
According to the Federal Trade Commission (FTC), Amazon engages in "a set of interlocking anticompetitive and unfair strategies" in order to drive up prices and reduce the amount of competitors in the market.
Amazon responded to the lawsuit by stating that it was "wrong on the facts and law," and that it looked forward to arguing this point in court.
It is the most recent tech behemoth to be sued by authorities in the United States. Lina Khan, the head of the Federal Trade Commission, has had Amazon in her sights for many years.
Ms. Khan, who was only 29 years old at the time, released a significant scholarly piece in 2017 in which she argued that the online store had avoided anti-competition investigation.
When asked about it at the time, she stated that with its missionary zeal for consumers, Amazon has marched toward monopoly.
This case has been anticipated by a large number of people ever since her unexpected nomination as Chair of the FTC in 2021, and it is seen as a significant test of her ability to lead.
Some lawmakers in the United States have called for action that would foster more competition in online search, shopping, and social media as a response to the dominance of a small number of extremely powerful digital businesses.
However, despite Ms. Khan's leadership at the FTC, there is not much to show for the forceful language employed against Big Tech.
It was unsuccessful in its attempt to prevent Meta from purchasing VR firm Within in February.
In July, it was unsuccessful in its attempt to prevent Microsoft from finalizing the purchase of the company that makes Call of Duty video games.
Ms. Khan is under a great deal of pressure to ensure that at least one high-profile complaint is successful, and officials at the FTC have high hopes for this case.
The federal government and 17 state attorneys general have made the accusation that Amazon is a "monopolist" that prevents competitors and sellers from lowering their pricing.
Additionally, the regulatory body asserted that Amazon's practices "degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent competitors from competing fairly against Amazon."
Amazon, on the other hand, claims that the "misguided" action brought by the FTC will result in fewer products to pick from, higher prices, and slower delivery times for customers if it is successful, according to sources.
The allegation that there is a monopoly in the industry has resulted in the customers suffering financial losses as a result of worse offers being offered to them.
The anti-competition legislation in the United States is complicated, but in general, prosecutors need to demonstrate that firms have acted in a way that causes financial harm to consumers.
Due to the fact that many of Big Tech's services, such as Google's search engine and Meta's Instagram, are offered at no cost to users, demonstrating this is not always a straightforward process.
This month saw the beginning of a legal battle between Google and the United States government, which has charged the company with operating a monopoly in the advertising technology sector.