FTC Anti-Trust Suit Against Amazon Expected To More Forward This Month

(Photo : Photo by PATRICK T. FALLON/AFP via Getty Images)
The Amazon.com, Inc. BHM1 fulfillment center is seen before sunrise on March 29, 2021 in Bessemer, Alabama. - Votes are set to be counted on March 29, 2021 on whether to create the first Amazon union in the United States, at a warehouse in Alabama, after a historic, five months-long David vs Goliath campaign. "I'm proud of the workers at Amazon for standing up and saying enough," said Joshua Brewer, the local president of the Retail, Wholesale and Department Store Union.

The Federal Trade Commission (FTC) is rumored to be on the verge of filing a long-anticipated antitrust litigation against Amazon.com.

This legal action is the culmination of a four-year investigation into the company's business practices, including its influential online marketplace.

FTC Antitrust Suit Against Amazon

As the Biden administration intensifies its efforts to address antitrust concerns and promote competition, this impending lawsuit is expected to become the fourth lodged against Amazon this year, raising significant questions about the future of the online retail giant.

According to Bloomberg, the imminent FTC lawsuit will likely target Amazon's vast online marketplace, which has become the company's business strategy pillar. Over fifty percent of Amazon's online sales come from third-party sellers who utilize this marketplace to reach consumers worldwide.

However, the investigation has revealed concerns regarding Amazon's practices in this industry. According to insider sources, the lawsuit will likely address issues such as Amazon's commission structure, which requires third-party sellers to pay a fee for every sale made through the platform.

Numerous merchants have complained that Amazon unjustly ties access to its marketplace to the use of its logistics services, thereby imposing what they view as an unfair advantage. This anticipated legal action indicates the Biden administration's vigorous approach to antitrust matters, which places competition at the forefront of its economic agenda.

Amazon's Business Practices

The FTC chair appointed by President Biden, Lina Khan, has a history of investigating Amazon's business practices. As a law student, she authored a seminal paper that challenged conventional antitrust thinking regarding the digital age and online platforms, establishing her as a vocal advocate for reassessing antitrust laws in the context of companies like Amazon.

Amazon executives recently met with the three FTC commissioners in the middle of August to discuss the impending lawsuit. However, the discussions did not agree, indicating that the legal dispute will continue.

This lawsuit is not the first time the FTC has confronted Amazon in 2023. In May, the agency brought two cases against the company. In one instance, Amazon was accused of neglecting to delete children's data collected through its Alexa speakers. In contrast, in another, it was charged with illegally spying on users of its Ring doorbells and cameras.

Despite denying the allegations, Amazon consented to pay $30.8 million to settle these lawsuits, The Strait Times reported. In just one month, in June, the FTC sued Amazon once more, this time for consumer protection violations. The agency alleged that Amazon deceived consumers into signing up for Prime memberships, making it purposefully difficult to terminate these subscriptions. Amazon vehemently refuted these allegations, and the lawsuit continues.

As the FTC prepares to sue Amazon in a landmark antitrust case, industry stakeholders, legal experts, and competition advocates will closely monitor the outcome.

This legal action is part of a larger global movement that seeks to hold tech titans accountable for their market dominance and alleged anticompetitive practices. For Amazon, the lawsuit represents a significant legal challenge that could fundamentally alter its marketplace business model.

Regulators and legislators have scrutinized the company's extensive online ecosystem and reliance on third-party sellers. A potential unfavorable ruling could affect how Amazon administers its marketplace and substantially change the e-commerce industry.

In the broader context of the digital economy, this lawsuit may establish legal precedents that impact antitrust enforcement against other tech titans. Amazon, Facebook, Google, and Apple have been the subject of intensifying scrutiny regarding their market dominance and business practices.

A successful case against Amazon could signify a more aggressive approach by regulatory authorities to antitrust concerns throughout the technology industry, as per Fortune.

The imminent FTC litigation against Amazon highlights the growing significance of antitrust enforcement in the digital age and the necessity of fostering competition in the marketplace. As this legal battle unfolds, it will unquestionably shape the future of Amazon's marketplace and may have far-reaching effects on the broader tech industry.