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Amazon Wants Antitrust Lawsuit Dismissed Over ‘Common Retail Practices’

The US Federal Trade Commission (FTC) has filed an antitrust lawsuit that Amazon wants “dismissed in its entirety.”

The big global online shopping business claims that the regulator mistook “common retail practices” for anticompetitive conduct and unsuccessfully identified customer harm.

The FTC has accused Amazon of employing unlawful tactics to increase profit growth, such as using an algorithm that allegedly supercharged prices to go up by over US$1 billion (A$1.52 billion).

“Amazon promptly matches rivals’ discounts, features competitively priced deals rather than overpriced ones, and ensures best-in class delivery for its Prime subscribers,” Amazon said.

The Amazon case is a part of FTC’s push to put pressure on companies that are major internet players and is one of four other cases the FTC has filed.

Specifically, the Biden administration has influenced the FTC, focusing on giant businesses that provide everyday customer items like food, housing, and airline tickets.

According to the FTC lawsuit, Amazon allegedly designed a “secret algorithm” named Project Nessie to increase the prices of certain products that Americans would buy with or without a slight price increase.

In 2019, the FTC said Nessie was discontinued, and now the business matches other companies’ lowest prices.

Additionally, the FTC said Amazon’s choice to force sellers under the company’s Prime feature to use its logistics and delivery services, no matter if other less expensive services were their preference, but Amazon denies this and says that using Amazon’s fulfillment services was voluntary.

Fees for sellers using Amazon’s fulfillment services went from 27% in 2014 to 39.5% in 2018, the FTC said.

“The complaint’s ‘online superstore’ market is implausible because it suggests, for example, that consumers would not consider buying a low-priced TV on Bestbuy.com only because Best Buy does not also sell shoes,” Amazon asserted.

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