United States Federal Trade Commission Prepared to File Antitrust Lawsuit Against Amazon and May Break Up Their Monopoly

July 27, 2023 - Los Angeles, CA – The U.S. Federal Trade Commission (FTC) is on the verge of filing a highly-anticipated antitrust lawsuit against Amazon (AMZN), aiming to potentially break up certain aspects of the e-commerce behemoth, according to a Politico report. The lawsuit, expected to be filed in federal court as early as August, has been a long time coming, with FTC Chair Lina Khan and her team scrutinizing various aspects of Amazon's business practices. Khan has been a vocal critic of Big Tech, having previously identified Amazon as a modern monopolist needing to be reined in.

The scope of the forthcoming complaint is yet to be fully revealed, yet criticisms of Amazon offer a long list of business practices and misdeeds for the FTC to pick from. The complaint is likely to focus on challenges to Amazon Prime, Amazon 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, according to persons granted anonymity to discuss the confidential matter. The FTC is concerned that bundled services are used to illegally cement the company's market power.

The FTC is also expected to claim that Amazon steers sellers to its own logistics services, which include shipping and warehousing, by rewarding them with better placement on the site, and punishing them when they don't, some of the people said, along with an earlier Bloomberg report.

The FTC could also bring state attorneys general on board for the lawsuit, another reason to file in federal court. According to the Bloomberg report, in addition to California and Washington, D.C., New York is also investigating the company.

This will not be the first case the FTC has filed against Amazon under Khan. Last month, the FTC accused Amazon of duping millions of consumers into unknowingly enrolling into its paid Amazon Prime subscription service without their consent and making it challenging for consumers to cancel. The company recently agreed to pay $30 million to settle a pair of privacy lawsuits involving its Ring doorbell cameras and Alexa smart speakers made for kids. And the FTC is currently investigating the company's purchase of robot vacuum maker iRobot, which POLITICO previously reported that FTC staff are leaning toward trying to block.

Amazon has agreed to a settlement in the European Union that will resolve two antitrust cases against the retail giant while avoiding a multibillion-dollar fine over allegations the company was improperly using data from third-party sellers who use Amazon's marketplace.

In its probe, the FTC has interviewed dozens of witnesses inside and outside Amazon, including CEO Andy Jassy and former CEO and founder Jeff Bezos, some interviewees said. The FTC collected millions of documents from Amazon and third parties to build its case over the last three years.

Spokespeople for Amazon and the FTC declined to comment.

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