Prime Time Drama

The Biden Administration is filing an anti-trust suit against Amazon over having monopoly power large enough to "warp the entire internet economy".

 

The Federal Trade Commission, the U.S. government’s primary business regulator, sued Amazon on Tuesday, alleging that the company has used its market power to warp ecommerce across the internet.

The allegations focus on the company’s primary marketplace, Amazon.com, and paint a picture of a company able to use its size and power to pressure sellers to agree to its terms and warp the prices of goods.

“There is immediate harm that is ongoing here,” FTC Chair Lina Khan said at a news conference ahead of the lawsuit announcement. “Sellers are paying one of every $2 to Amazon. Shoppers are paying higher prices as a result, not just on Amazon but across the internet. And the public as a whole has been deprived of the benefits of open and fair and free competition. And so that’s what this case is really about, and those are the harms that we’re looking to fix.”

The FTC made the allegations in an antitrust lawsuit in the U.S. District Court for the Western District of Washington state, backed by the attorneys general of 17 states, including two Republicans. Amazon is based in Washington state.

The lawsuit is the most aggressive action yet by Khan, a longtime critic of Amazon who was brought in to the FTC by President Joe Biden to reinvigorate the government’s enforcement of competition laws particularly around technology companies.

The FTC alleges that Amazon deters sellers from discounting goods and lowering prices below what is available on Amazon, pushing prices higher across the internet. It also argues that Amazon pushes sellers into its fulfillment services, making it more expensive for sellers to offer their goods elsewhere.

California lodged similar complaints in a lawsuit filed just more than a year ago.

Kahn declined to directly address whether she hoped the suit would lead to a breakup of Amazon into smaller companies, but stressed that it showed Amazon had established an unfair advantage.

“Each element of Amazon’s monopolistic strategy here is working in tandem, and so the cumulative impact of Amazon’s unlawful conduct is greater than the harm caused by any particular element,” she said. “So you have a feedback loop between these different practices in a way that amplifies the overall exclusionary effects.”

In a statement posted to Amazon’s website, David Zapolsky, Amazon's senior vice president for global public policy, said: “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”

 

Amazon's defense is "Nu-uh, we're helping."

 

By the way, that $89 year of Amazon Prime is now $139, a nearly 50% price hike from just five years ago. On top of everything else, they get you coming and going.

As I've said before, breaking up Amazon, Google, and Meta needs to happen sooner rather than later. Lina Kahn may have lost a few battles, but this is the one she needs to win.