The Federal Commerce Fee and 17 states accused Amazon on Tuesday of illegally defending a monopoly over swaths of on-line retail by squeezing retailers and favoring its personal companies, within the authorities’s most vital problem to the ability of the e-commerce big and one that might alter the way in which Individuals store on-line for all the things from rest room paper to electronics.

In a extremely anticipated lawsuit, the F.T.C. and state attorneys normal from New York and different states Stated that Amazon had stopped retailers on its platform from providing decrease costs elsewhere and compelled them to ship merchandise with its logistics service in the event that they needed to be supplied as a part of its Prime subscription bundle. These practices led to larger costs and a worse procuring expertise for shoppers, the company and states stated.

“Right now’s lawsuit seeks to carry Amazon to account for these monopolistic practices and restore the misplaced promise of free and honest competitors,” stated Lina Khan, the chair of the F.T.C.

The lawsuit put the affect and attain of Amazon, a $1.3 trillion behemoth, squarely within the highlight after years of mounting scrutiny. Based by Jeff Bezos in 1994, the onetime upstart on-line bookseller has grown right into a sprawling conglomerate with tentacles in retail, Hollywood and the foundational infrastructure of the web.

A lot of the Seattle-based firm’s energy has emanated from its on-line market, generally generally known as an “all the things retailer” for the vary of merchandise it sells and the velocity with which it delivers them. Amazon’s sway over on-line commerce has formed the lives of retailers around the globe, set the working situations for multiple million warehouse employees and pushed the U.S. Postal Service to ship on Sundays.

Now Amazon, the nation’s second-largest personal employer, has turn into the most recent huge tech firm to face off towards the federal government over monopoly considerations, simply because the Justice Division has entered the third week of an antitrust trial difficult Google over its energy in on-line search. The F.T.C. has additionally introduced an antitrust lawsuit towards Meta, which owns Instagram, Fb and WhatsApp. Members of Congress have thought-about laws to manage a few of the corporations’ commonest enterprise practices.

The brand new lawsuit pits Amazon immediately towards Ms. Khan in a long-awaited confrontation. She rose to fame as a Yale regulation scholar in 2017 when she printed a paper arguing that American Antitrust Legal Guidelines had did not adequately cease Amazon from amassing energy over its prospects, rivals and suppliers. The paper helped kick off a debate about whether or not U.S. antitrust legal guidelines wanted to be modernized to rein in tech giants.

Even so, a lot of the marketing campaign towards the tech giants has moved slowly. The monopoly circumstances might take years to resolve, whereas no new laws have been handed in Congress. International governments — significantly the European Union — have been extra aggressive, approving guidelines governing how the tech corporations deal with private information, deal with their rivals and police dangerous content material.

Amazon, which generates greater than $500 billion in annual income, has continued rising regardless of the scrutiny. Up to now three years, it purchased One Medical, a sequence of main care practices; the Roomba producer iRobot; and the fabled film studio Metro-Goldwyn Mayer, giving it a significant stake within the James Bond franchise. These offers have added to an empire that features its on-line superstore, cloud computing companies that energy broad areas of the net and a streaming service that competes with rivals like Netflix.

The F.T.C.’s competitors workforce started investigating Amazon’s enterprise in summer season 2019, with no scarcity of complaints in regards to the firm’s enterprise practices from critics and rivals.

Amazon’s critics stated it had strong-armed sellers that supplied items on its platform, forcing rivals into punishing value wars and boosting the merchandise it makes itself over these equipped by exterior retailers. Its interlocking management of various components of on-line retail — from the storefront to the supply vans that take packages to shoppers’ doorsteps — allowed it to dominate rivals, they stated. In a report printed in 2020, employees on the Home Judiciary Committee, which included Ms. Khan, discovered “that Amazon features as a gatekeeper for e-commerce.”

By June 2021, when President Biden appointed Ms. Khan to be the F.T.C.’s chair, Amazon had supplied the company with paperwork and knowledge, an individual aware of the investigation stated. Underneath Ms. Khan’s management, a brand new workforce got here in to run the antitrust inquiry, the individual stated.

The connection between Amazon and the F.T.C. has been strained since Ms. Khan took over the company. Weeks after she was sworn in as F.T.C. chair, Amazon petitioned the company to have her recused from antitrust issues relating to the corporate.

Final yr, Amazon moved to cease the company from interviewing Mr. Bezos and Andy Jassy, the corporate’s chief govt, in a separate investigation into its Prime membership practices, accusing the F.T.C. of “harassing” the executives. This June, the F.T.C. sued the corporate on account of that investigation, accusing it of violating client safety legal guidelines by tricking shoppers into signing up for its Prime membership program.

In current months, the F.T.C. moved nearer to deciding whether or not to proceed with an antitrust lawsuit towards the corporate. In August, Amazon’s representatives met with Ms. Khan and the company’s two different commissioners to debate the case. These so-called final rites conferences give corporations an opportunity to refute the company’s case earlier than it votes to file a lawsuit.

With Tuesday’s announcement, the F.T.C. joins authorities businesses around the globe which might be making an attempt to verify Amazon’s affect on the economic system.

In 2021, the lawyer normal of the District of Columbia accused Amazon of controlling costs on its web site, however a choose dismissed the case final yr. An identical, however extra strong, case introduced by California overcame Amazon’s try to have it thrown out.

Amazon has already made some adjustments that might handle some considerations.

The corporate is winding down most of its personal label manufacturers after they did not generate substantial client traction, an individual aware of the technique stated. In June, it introduced it could later this yr reopen enrollment for a program that allow retailers promote their merchandise as Prime-eligible whereas dealing with the deliveries themselves, with out utilizing Amazon’s warehouses. And after settling with European regulators, it has experimented with displaying prospects gives from a number of retailers in a key space of its on-line retailer.

Karen Weise contributed reporting from Seattle.