Amazon Under Fire as US Accuses Online Behemoth of Illegal Monopoly

Amazon, the colossal online marketplace, has found itself in hot water as US regulators accuse the tech giant of maintaining an illegal monopoly. The Federal Trade Commission (FTC) has fired the first shot, alleging that Amazon employs a series of interlocking anti-competitive strategies to drive up prices and stifle competition, leaving consumers with limited choices and higher costs.

Amazon, on the other hand, is not taking these allegations lightly. The e-commerce behemoth responded quickly, asserting that the complaint is "wrong on the facts and law" and expressing a desire to present its position in court. Indeed, this news is not stopping you from your online shopping. But you may want to know more before adding something to your cart.

You might have heard of a lot of classical fights and legal battles, but this one has taken the internet by storm, and nobody was ready for it. This is the latest in a string of high-profile legal disputes between US regulators and tech titans. For years, the FTC, led by Lina Khan, has been keeping a tight eye on Amazon. Khan, then 29, released an essential academic study in 2017 emphasizing Amazon's unregulated rise and probable anti-competitive activity. She claimed that Amazon's insatiable quest for customer pleasure has driven it to monopolistic domination.

Khan's selection as FTC Chair in 2021 indicated the beginning of the end for Amazon. Many see this litigation as a litmus test of her leadership and resolve to take on the tech behemoths.

The concentration of power among a few tech behemoths has spurred US senators to push for steps to boost competition in internet search, shopping, and social media. Despite loud rhetoric against Big Tech, the FTC's efforts to reign them in have met with obstacles. It failed to halt Meta's acquisition of VR business Within in February, and it also was unable to prevent Microsoft's acquisition of the Call of Duty developer in July.

The Amazon lawsuit provides the FTC with an ample opportunity to make a strong argument against Big Tech. The agency, together with 17 state attorneys general, claims that Amazon's monopoly hinders competitors and sellers from offering lower pricing, which ultimately affects consumers. Amazon's practices, according to the regulator, degrade product quality, overcharge vendors, impede innovation, and stifle fair competition.

This legal struggle, in essence, revolves around the impact of Amazon's apparent monopoly on consumers' wallets, with the goal of proving that consumers have been financially injured. Although US antitrust rules are complicated, prosecutors must generally show that a company's actions caused financial loss to consumers.

In this aspect, Big Tech poses a unique problem because many of its services are free. Companies such as Google give services such as their search engine, while Meta provides platforms such as Instagram without charging customers directly. Because consumers aren't paying out of cash for these services, demonstrating financial loss becomes more difficult.

Another legal dispute recently erupted between the US government and Google, this time over allegations that the internet giant has a monopoly on advertising technology. This lawsuit exemplifies ongoing efforts to hold Big Tech accountable for market dominance and suspected anti-competitive activity.

The Amazon lawsuit will be widely followed as it progresses, not just for its possible impact on the e-commerce behemoth but also for the more significant ramifications it may have on the regulation of computer sector titans. The outcome could serve as a model for future anti-monopolistic practices in the digital era, with implications for competition and consumer choice. While the legal battle may be far from over, it is clear that the era of Big Tech scrutiny and accountability has firmly arrived.

Photo: Joshua Brown / Pexels
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