Amazon accused of being a monopolist in FTC lawsuit
- Reference: 1695753909
- News link: https://www.theregister.co.uk/2023/09/26/ftc_amazon_antitrust/
- Source link:
Amazon, the FTC [1]alleges , engages in anticompetitive conduct in two markets: online ecommerce and also the market for marketplace services used by sellers. The tactics used by Amazon to thwart competition include anti-discounting measures that punish sellers for offering prices lower than Amazons, and requiring vendors to use - and pay for - Amazon's fulfillment services to make their products eligible for free Prime shipments, the FTC claims.
"Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies," said FTC Chair and perennial Amazon opponent Lina Khan.
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Khan describes Amazon's as exploiting monopolistic power to enrich itself by raising product prices and degrading services for its customers and businesses. "Today's lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition," Khan added.
[3]
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Amazon's "monopoly rents" are extracted from "everyone within its reach," the FTC alleges. This hurts customers by replacing relevant organic search results with ads and boosting Amazon's own products in search results. In addition, excessive fees are allegedly leveled at Amazon sellers, which the FTC said can amount to close to half of a store's revenue going directly to the online souk, and which it asserts are passed on to consumers.
The FTC under Khan has been hard in its pursuit of Amazon, charging the company with several offenses over the past year. Last September, the FTC launched an [5]investigation of Amazon's ongoing attempts to purchase Roomba maker iRobot, which digital rights groups had said would give Amazon more dominance in the "smart" home space.
[6]Amazon not happy with antitrust law targeting Amazon
[7]Amazon hit with $1bn claim that secretive Buy Box algorithm screws shoppers
[8]A federal watchdog to police Big Tech? Yeah, that'll do the trick, senators...
[9]Alexa's future is pay-to-play, departing Amazon exec predicts
In June, the FTC charged Amazon with [10]privacy violations over allowing Ring employees to access customer's private videos, and later that same month filed [11]another suit alleging Amazon had used "dark patterns" to make it difficult to quit Prime.
The FTC [12]amended its suit against Amazon for Prime dark patterns designed to dupe consumers on its website last week, adding three senior Amazon executives - Neil Lindsay, the former head of the Prime team; Lindsay's replacement Russell Grandinetti; and Prime VP Jamil Ghani - to the case as being the architects of the difficult quit process.
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While documenting plenty of allegedly egregious behavior, the FTC's multiple suits haven't gone as far as calling Amazon a monopolist until now, though the move has been widely expected since this summer.
Break me up before you go, Khan
FTC chair Khan has been gunning for Amazon since her days in Yale Law School when in 2017 she penned the widely read [14]article Amazon's Antitrust Paradox that argued current antitrust law was insufficient to deal with 21st century monopolists like Amazon.
In other words, no one is very surprised such an antitrust case has emerged from Khan's agency. "What was less expected is the sheer breadth of the suit, and the far-reaching remedies that are being demanded," said International Center for Law and Economics president and founder Geoffrey Manne. "These extreme demands greatly undermine the chances that the agency will prevail in court."
Manne said the FTC's suit could undermine Amazon's entire platform if successful, causing harm to consumers "all in an attempt to shift the course of US antitrust policy against the will of Congress and the courts."
"We can and should break up Amazon," said Athena Coalition, a self-described anti-Amazon grassroots group, in a statement. "Amazon has a long history of combining and utilizing its many businesses together as an integrated whole to leverage its power against workers, businesses, and ultimately all of us."
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The group said that an FTC victory would free Amazon sellers to work with whomever they chose, rather than being forced to go to Amazon. Rather than harming consumers, Athena said that an Amazon reigned in by the FTC would also mean more choice and lower costs for Amazon customers, too.
Neither Amazon nor the FTC responded to questions for this story. ®
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[1] https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZRNUhIGBPGrMHVGHg-7TtAAAABg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRNUhIGBPGrMHVGHg-7TtAAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRNUhIGBPGrMHVGHg-7TtAAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2022/09/21/ftc_amazon_irobot_one_medial/
[6] https://www.theregister.com/2022/06/01/amazon_antitrust_bill/
[7] https://www.theregister.com/2022/10/20/amazon_uk_buy_box_tribunal/
[8] https://www.theregister.com/2023/07/27/us_lawmakers_propose_new_commission/
[9] https://www.theregister.com/2023/09/25/alexa_paywalled_future_amazon/
[10] https://www.theregister.com/2023/06/01/ftc_alexa_ring_amazon_settlement/
[11] https://www.theregister.com/2023/06/21/amazon_prime_ftc_lawsuit/
[12] https://www.theregister.com/2023/09/21/ftc_amazon_prime_amended_complaint/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRNUhIGBPGrMHVGHg-7TtAAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRNUhIGBPGrMHVGHg-7TtAAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[16] https://whitepapers.theregister.com/
I can't wait
For MAGA to claim that this is a result of the weaponisation of the FTC/DOJ/uncle tom cobbley and all in DC.
Personally, this is long overdue but IANAL and do not play one on TV so what do I know eh?
Amazon are fast becoming just as evil as the likes of Google, Facebook, MS and all the other usual suspects.
They will be hoping that Trumpo gets re-elected because if the Dems take control of both houses and the White House then there may well be many more efforts to get Amazon unionized and with the feds behind them, their anti-union stance may well have to change and fast.
Ebay exists.
Therefore Amazon cannot be called a monopoly.
Case dismissed.
Private Jets, that's the problem
Obviously nobody connected with this suit has traveled inside the US by domestic airline, they all must use private jets or something. Airlines are dominated by four carriers who compete with each other for who can provide passengers with the worst service for the most money.** (They're not particularly employee friendly, either.) This situation didn't happen by accident, it was a process of mergers and systemic stifling of competition that got us here, and its a great situation to be in because between Federal regulation of passenger behavior and the threat of no-fly lists they can pretty much do what they like without any risk of the customers complaining. They're not unique in their behavior -- pick any large US business and you'll find monopolistic behavior geared to delivering the least for the most, be it in railroads, pharmaceuticals, vehicles -- you name it, we'll get screwed by it.
Compared to the norm Amazon is a paragon of competitive probity. (They do have competition as well, believe it or not.) I suspect this is really about wannabe competitors wanting a piece of their action -- split the thing up Bell System style so there's bound to be plenty of spoils to squabble over. Ultimately it comes down to the relative cost of lawyers compared to getting off one's duff and actually doing some work.
(Guess who's now automatically disqualified from any trial jury involving Amazon.......)
(**A recent article in the business press described them as "Banks that also happen to fly planes. Sometimes" due to the relative profit they make running points schemes and arbitraging those points compared to actually flying planes. Its actually a metaphor for what's wrong with US business as a whole.)
It's true
The overwhelming majority of regulation is constructed around "old world" problems, market structures, and business models. I'm (now) a regulator, and in my employer's particular niche the poor behaviour of dominant online players is a big problem that we're trying to address with new legislation - that IMHO doesn't go near far enough to regulate online marketplaces (OMP).
The attitude of the OMPs is to play ball a tiny, tiny bit, but fundamentally to assert that they're compliant with the old rules, and to use their considerable lobbying resource and well funded lawyers to resist change, and fight enforcement actions. Good luck to the FTC, but I think their chances are low - Amazon will simply wheel out their purchased congressmen (reportedly $21m of US lobbying costs in 2022) and the FTC will find that their plans to make Amazon play by the rules will just get bogged down in the awful state of US government.