In a monopoly lawsuit, the Federal Trade Commission and 17 states accuse Amazon of suffocating rivals and raising costs for both sellers and shoppers.
MICHEL MARTIN, HOST:
Amazon is facing a federal monopoly lawsuit.
STEVE INSKEEP, HOST:
The Federal Trade Commission and 17 states have all sued the tech giant, accusing it of harming small businesses and shoppers. As always, we’ll note that Amazon is among NPR’s financial supporters and pays to distribute some NPR content, and we cover it like any other company.
MARTIN: NPR’s Alina Selyukh is with us now to tell us more. She has a monopoly on this story. Sorry, I had to do it.
ALINA SELYUKH, BYLINE: Here I am (laughter).
MARTIN: All right. So, OK, Alina, how big of a deal is this lawsuit?
SELYUKH: It’s a very big deal. It could be up there with historic monopoly cases. Think Microsoft back in the ’90s. The FTC has been working on this case for years. It started under President Trump and it’s now led by Chair Lina Khan, who became famous as a legal scholar arguing that Amazon and other tech giants are acting like modern-day railroad tycoons and should be restrained appropriately.
MARTIN: Can you just give some of the specifics of the case against Amazon?
SELYUKH: Yes. So the focus is on the fraught relationship that Amazon has with other sellers on the platform. Most of the stuff that you buy on Amazon now actually comes from other sellers – about 60%. And the FTC argues that Amazon abuses its power over these sellers, kind of trapping them and costing them more and more in various fees, knowing that they can’t afford to leave.
MARTIN: Have you had the opportunity to speak to some Amazon sellers? I mean, what do they say about this?
SELYUKH: You know, I mentioned fraught relationship. Selling on Amazon is lucrative, so sellers will talk about how they can reach shoppers now in ways that they couldn’t even imagine 20 years ago. But also, Amazon is still their competitor. It can see what they sell, what’s most profitable. It could sweep in, sell at a loss, squeeze out them and other rivals and then start raising prices.
Yesterday, a few sellers were brought together by an anti-monopoly think tank, and they described all of this. And one of them was Nicholas Parks from Alabama. He sells hot sauces and spices.
NICHOLAS PARKS: You can’t compete head-on in any relevant way in the grocery category. So we have to find items that Amazon doesn’t sell. And if they pick up one of the items that we sell, then that effectively means we just can’t sell that item any longer.
SELYUKH: He also mentioned that when you tally all the fees, about half of what he makes on the platform goes back to Amazon.
MARTIN: And let’s look at this from the consumer standpoint. How does this affect shoppers?
SELYUKH: Well, so the case argues that it could mean that perhaps you’re not seeing best-quality results at the top of your search or you’re paying more because sellers are paying more. And even more directly, the lawsuit argues that Amazon actually punishes sellers that try to charge lower prices elsewhere on the internet, meaning you might see higher prices caused by Amazon even if you don’t shop on Amazon.
MARTIN: And what does Amazon have to say about this?
SELYUKH: Amazon paints FTC as radically veering from its mission to protect consumers and argues that if the government wins, the result could be higher prices, slower deliveries, fewer options for shoppers and businesses.
MARTIN: So what’s the goal here? What do the FTC and these 17 states want the court to do?
SELYUKH: The FTC wants the court to make Amazon stop acting anti-competitively. I want to note that at the moment, they’re not asking the court to break up Amazon. But this case is going to play out over probably many years, and so a lot can change in the years of litigation ahead.
MARTIN: That is NPR’s Alina Selyukh. Alina, thank you so much.
SELYUKH: Thank you.
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