The Federal Trade Commission is preparing a potential antitrust lawsuit against Amazon that in the coming months could challenge many of the company’s business practices as being anti-competitive, the Wall Street Journal reported late last week.
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| In part, that report found that Amazon had “monopoly power” over sellers on its site, bullied retail partners and improperly used seller data to compete with rivals. |
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But nothing is for sure, the Journal reports, with the timing of any actions uncertain. What’s more, the FTC could also choose not to proceed at all.
The Amazon practices under scrutiny include whether Amazon favors its own products over those of its vendors and how it treats outside sellers on Amazon.com.
The FTC is also said to be looking the company’s Amazon Prime subscription service’s bundling practices.
While there was no specific comment from Amazon on this reported news, for many years the company has said consistently that it competes fairly and that its services benefit both its customers and sellers on its platform.
In an interesting twist, current FTC Chair Lina Khan is perhaps most famous for a widely read academic paper that alleged that Amazon had amassed too much market power and that antitrust law had failed to restrain it.
Shortly after Ms. Khan was confirmed as FTC chair in 2021, Amazon filed a petition with the commission that argued she should be recused in investigations of the company, in light of her extensive past criticisms of Amazon. The commission hasn’t publicly responded to that petition.
The Journal reports that the FTC began investigating Amazon during the tenure of Republican Chairman Joseph Simons, who ran the agency during the Donald Trump administration.
Amazon and other large tech companies including Facebook were the focus of a 16-month congressional antitrust investigation into the competitive behaviors of the tech giants that concluded with a 449-page report in 2020.
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In part, that report found that Amazon had “monopoly power” over sellers on its site, bullied retail partners and improperly used seller data to compete with rivals.
In a blog post issued the day of the congressional report, Amazon warned against “ill-conceived ideas” about regulation.
The Journal itself published the results of an investigation in a 2020 article that found that managers in Amazon’s private brands business have used data about independent sellers on the company’s platform to develop competing products - a practice at odds with the company’s stated policies.
The Journal also reported that Amazon’s used dominance in one business to compel partners to accept terms from another, a practice some said went beyond typical product bundling and tough negotiating in part because the company threatens punitive action on vital services it offers, such as its retail platform.
Amazon at the time said that it employees were barred from using non-public, seller-specific data to determine which products it launched, and that negotiating across its business units was normal practice in business.
In December, Amazon settled two European Union antitrust cases related to allegations about its treatment of third-party sellers on its platform.
Amazon didn’t pay a fine as part of the settlement, but did agree to change certain practices relative to its vendors and web site, such as agreeing to abstain from using non-public data about sellers on its marketplace to compete against them in the European Union.
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