FTC Expected to File Lawsuit Against Amazon This Month: Here’s What’s at stake

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In Lina Khan’s two years at the helm of the Federal Trade Commission, her call has been the most related to one company: Amazon.

So far, this is largely due to his viral 2017 Yale Law Journal article, titled “The Amazon Antitrust Paradox. “The document has caused a sensation in the antitrust network because it claims that the fashionable antitrust application has failed to master how tech giants like Amazon are able to dominate in a virtual world.

The article made Khan’s call ubiquitous in antitrust circles and helped her become the youngest chairwoman of the FTC. Once sworn in, Amazon insisted that Khan be recused from its antitrust investigations, pointing to his complaint beyond his activities. A similar attempt through Meta was rejected through a judgment in a separate case.

While the FTC has lashed out at big tech corporations under Khan’s government (for example, through its challenge to Meta’s proposed acquisition of Within Unlimited, a maker of virtual fitness apps, and a customer coverage lawsuit opposed to Amazon’s Prime service), those who stick to the company have long expected a lawsuit challenging Amazon’s alleged monopoly power.

That trial will now begin early this month, the Wall Street Journal and Bloomberg reported this week.

A challenge to Amazon’s alleged monopoly could lead to the dissolution of the trillion-dollar business, if the FTC sues and wins in court.

On Aug. 15, the FTC held a so-called last-rite meeting with Amazon, a source familiar with the matter showed CNBC, who was not legal to speak publicly about the personal discussions. Such meetings are the last step before commissioners vote on whether to take legal action, giving a company a chance to express its explicit views.

In this case, however, an agreement and appropriate responses were discussed, the source said, confirming the Journal and Bloomberg data.

The lawsuit most likely targets key elements of Amazon’s retail business, including fulfillment through Amazon, its fulfillment program, as well as costs charged through third-party distributors on its website, according to the Journal, citing anonymous sources. Even before Khan joined after the signing, FTC staff had begun asking Amazon distributors whether the company’s dominant position harmed competition, Bloomberg reported in 2019.

The FTC declined to comment on the reports. In the past, Amazon has declined to comment on the Journal article.

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