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FTC Prepares to Challenge Amazon’s Business Practices: Politico

 |  July 26, 2023

The U.S. Federal Trade Commission (FTC) has been readying an antitrust lawsuit against e-commerce giant Amazon for months, and now it appears the wait is finally over.

The FTC is preparing to file its wide-ranging case in federal court as soon as August, according to Politico. The suit is expected to challenge Amazon’s business practices, such as its Prime subscription service, rules that the FTC says block lower prices on competing websites, and policies the FTC believes force merchants to use Amazon’s logistics and advertising services.

The commission is also reportedly looking into Amazon’s digital advertising business and its rapidly growing Amazon Prime service. FTC personnel have been interviewing witnesses both inside and outside Amazon, including CEO Andy Jassy and founder Jeff Bezos, in effort to hone in on any potential anticompetitive practices.

The FTC is “likely to claim that Amazon steers sellers to its own logistics services by rewarding them with better placement on the site, and punishing them when they don’t,” reports Steven Senne of the Associated Press.

The move comes as the Biden administration is increasingly taking aim at corporate mergers, yet has thus far failed to win any cases. As a result, the agency has faced mounting pressure to bring a successful case against Amazon. The FTC is also expected to bring state attorneys general on board, including those in New York, California, and Washington, DC.

Read more: Amazon Offers Changes to Address Competition Concerns in UK

The FTC will also be offering more information to states by the end of July in order to determine whether they should join the lawsuit.

In addition to California and Washington, D.C., New York is also investigating the company. The FTC has told some states that it plans to share more information by the end of July that can be used to determine whether to join its lawsuit.

This will be the first case that the FTC has filed against Amazon under FTC Chair Lina Khan. Khan has previously drawn criticism from Amazon over past remarks and her investigative work with the House Judiciary Committee.

Amazon is also currently fighting allegations that it made Prime hard to cancel and is under investigation for its purchase of iRobot. The company has previously settled similar allegations in Europe by making changes to its sales practices and restricting its use of data from third-party sellers on its European web stores.

The FTC is expected to hold a so-called last rites meeting with Amazon’s executives and attorneys before filing the case. This meeting, which is largely a formality, is expected to take place at least in August. After this meeting, Amazon could respond to the FTC’s charges and try to negotiate a settlement.

The case is a major blow to Amazon, which has managed to remain largely unscathed from the wave of antitrust regulations that has been sweeping across the small business world in recent years.

It remains to be seen how the e-commerce giant will weather the storm, but one thing is certain: the FTC is making it clear that monopoly behavior is not going to be tolerated.

The FTC’s case could potentially break up parts of the company, setting a dangerous precedent for other tech giants. As the case progresses, the entire world will be watching with intense curiosity.

Source: Politico