The FTC sued Amazon in a sweeping antitrust case that targets its core biz
The GoT season finale… of Big Tech litigation. The Federal Trade Commission and 17 states filed a long-expected antitrust lawsuit against Amazon yesterday, and the ecomm giant responded ASAP that the suit is “wrong on the facts and the law.” If successful, it could force Amazon to rework the fundamentals of its “everything store” in ways the FTC said would “pry loose Amazon’s monopolistic control.” The commission accused the online retailer of:
Punishing sellers who offer their products at lower prices on other sites by, for instance, pushing them down Amazon search results and biasing search toward Amazon products.
Coercing sellers into using Amazon’s fulfillment services to ship products (it’s a prereq to be Prime), and charging them steep fees that are passed down to shoppers.
Lina Khan’s crackdown… is in full swing. A longtime Amazon critic (in law school she wrote an antitrust paper on Amazon that went viral), Khan has scrutinized Big Tech since she became FTC chair in 2021. The agency filed a suit against Amazon in June accusing it of deceiving customers into getting a Prime sub. The company settled for millions with the FTC earlier this year in two suits concerning its Ring and Alexa products, and the agency probed its acquisitions of iRobot and MGM.
Not just Amazon: The FTC tried to block Microsoft’s acquisition of Activision and has an ongoing antitrust suit against Meta. Meanwhile, the Justice Department is in the middle of an antitrust battle against Google.
Legal actions can succeed even when they fail… The FTC doesn’t have to win each case to pressure Big Tech. Amazon’s already made some changes that may head off antitrust concerns, including nixing most of its private-label brands and planning to reopen a program that lets sellers who fulfill their own deliveries get the coveted Prime status. The spotlight alone can spark change, and Big Tech’s almost drawing as much attention as Swift-Kelce.