Why in News?

• The United States’ Federal Trade Commission (FTC), along with other regulators, has filed a lawsuit against online retail giant Amazon.
• The lawsuit alleges that the company uses punitive and coercive tactics to unlawfully maintain its monopoly.

What’s in Today’s Article?

• US FTC’s Lawsuit Against Amazon (Reasons, Amazon’s Response)
• India’s Laws on Competition (Legislation, About CCI, etc.)

What are the Allegations Against Amazon?

• The United States’ Federal Trade Commission (FTC) and 17 state attorneys general have sued Amazon Inc.
  • Amazon Inc. is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence.
• The lawsuit alleges that the company’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.
• It also alleges that the company engages in a course of “exclusionary conduct” that prevents current competitors from growing and new competitors from emerging.
• They said that Amazon’s anticompetitive conduct occurs in two markets:
  • online superstore market that serves shoppers and
  • market for online marketplace services purchased by sellers.
• These tactics include:
  • anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon,
  • keeping prices higher for products across the internet; and
  • conditioning sellers’ ability to obtain “Prime” eligibility for their products on sellers using Amazon’s costly Fulfilment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms.
• The FTC, along with its state partners, is seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its “unlawful conduct and pry loose Amazon’s monopolistic control to restore competition”.

Amazon’s Response:

• Amazon said that the FTC has filed a “misguided” lawsuit which, if successful, will force the company to engage in practices that “actually harm consumers and the many businesses that sell in our store”.

India’s Laws on Competition:

• Competition Act, 2002:
  • The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws.
  • The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
  • The objectives of the Act are sought to be achieved through the Competition Commission of India.
• About Competition Commission of India (CCI):
  • The Competition Commission of India (CCI) is a statutory body established in March 2009 under the Competition Act, 2002.
  • Objectives:
    • Eliminate practices having adverse effect on competition
    • Promote and sustain competition
    • Protect the interests of consumers
    • Ensure freedom of trade in the markets of India
  • Functions:
    • Ensure consumer interests are protected in the market
    • Implement the policies enumerated in the Competition Act, 2002
    • Advocate and educate other Government bodies about the Competition Act, 2002. Such as state governments and ministries etc.
    • To promote fair and constructive competition practices in the market
    • To prevent the realisation of anti-competitive agreements
    • To cooperate with other regulatory bodies to work more efficiently in ensuring the continuity of a free and fair market
  • Composition:
    • The Commission consists of one Chairperson and six members who shall be appointed by the Central Government.
  • Powers:
    • The Competition Commission of India has the power to inquire into a certain agreement as well as the dominant position of enterprises.
    • It has the power to inquire into any acquisition or combination if it determines that such acquisition or combination may adversely affect competition in the Indian market.
    • It has the power to regulate its own procedures.
    • It has the power to impose monetary penalties upon violation of the Competition Act, 2002.
    • It has the power to pass an interim order for any act where there has been anti-competition agreements or abuse of position by dominant parties which adversely affects the competition in the market.