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PA, NJ, DE among 17 states to join FTC antitrust lawsuit against Amazon

Federal government, 17 states sue Amazon in landmark monopoly case
Federal government, 17 states sue Amazon in landmark monopoly case 00:33

PHILADELPHIA (CBS/CNN) -- Pennsylvania, New Jersey and Delaware are among 17 states joining the Federal Trade Commission in a much-anticipated antitrust case against Amazon. The FTC and state attorneys general filed the lawsuit Tuesday.

The 172-page complaint alleges Amazon unfairly promotes its own platform and services at the expense of third-party sellers who rely on the company's e-commerce marketplace for distribution.  

For example, according to the FTC, Amazon has harmed competition by requiring sellers on its platform to purchase Amazon's in-house logistics services in order to secure the best seller benefits, referred to as "Prime" eligibility. It also claims the company anticompetitively forces sellers to list their products on Amazon at the lowest prices anywhere on the web, instead of allowing sellers to offer their products at competing marketplaces for a lower price.  

"Amazon's illegal, exclusionary conduct makes it impossible for competitors to gain a foothold," according to the FTC.

That practice is already the subject of a separate lawsuit targeting Amazon filed by California's attorney general last year.  

"Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies," FTC Chair Lina Khan said in a statement. "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."

ALSO SEE: FTC sues Amazon, alleging it tricked consumers into signing up for Prime subscriptions

The complaint also said Amazon disregards the customer's experience by preferencing Amazon's own products over ones that the company knows are of better quality 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."

Amazon didn't immediately respond to CBS News' request for comment.

The FTC case relies on showing how Amazon's business practices allegedly violate antitrust laws and is seeking a permanent injunction "that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon's monopolistic control to restore competition."

On Tuesday, the FTC said it held a unanimous 3-0 vote authorizing the lawsuit.  

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