UPDATED 22:04 EST / SEPTEMBER 05 2023

POLICY

FTC antitrust lawsuit against Amazon will likely come later this month after talks break down

The Federal Trade Commission is reportedly going ahead with an antitrust lawsuit against Amazon.com Inc. after the company’s lawyers offered no concessions in recent talks with the regulator, according to a report today in the Wall Street Journal.

The FTC’s probe into the e-commerce giant began during President Donald Trump’s administration, when the government initiated antitrust investigations into various U.S. tech companies, including Amazon, Apple Inc., Meta Platforms Inc. and Google LLC.

The probe has looked into allegations that Amazon favors its own products over other sellers on its platform, while its logistics program, Fulfillment by Amazon, has also come under heat. According to people familiar with the matter who spoke with the Journal, the FTC is seeking “structural remedies” that could see the company broken up.

The FTC’s present chair under the Biden administration, Lina Khan, has for a long time had Amazon in her sights. Khan, a prominent antitrust researcher, was voted in as chair in 2021. This was reported at the time as sending a strong message to U.S. big tech, given her stance on real or perceived antitrust violations.

Khan wrote a paper when she was a student at Yale criticizing Amazon’s market power. Just months after she secured her position as FTC chair, Amazon petitioned the FTC to have Khan recused from participating in antitrust investigations, stating that she had “already made up her mind about many material facts relevant to Amazon’s antitrust culpability.”

In May this year, Amazon was hit with a $30 million fine after the FTC and Justice Department said Amazon had violated the Children’s Online Privacy Protection Act Rule, or COPPA Rule, in regard to how its virtual assistant Alexa collected data on children. The FTC, which seems to have its claws stuck into the company, issued a further $5.8 million in fines after accusing Amazon of privacy violations related to its doorbell camera unit, Ring.

Another lawsuit was launched in June, this time over its Prime subscription service. At the time, Khan accused Amazon of engaging in “manipulative tactics” and of also trying to “delay and hinder” the FTC’s investigation. It seems there’s no love lost between the two factions.

Reports say that three of Amazon’s top executives met with the FTC in August this year to discuss the lawsuit, yet no compromise could be agreed upon. Neither Khan nor Amazon has commented on the meeting so far.

Photo: Dan Dennis/Unsplash

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