Amazon may soon face what it dreaded when FTC Chair Lina Khan was appointed: According to Bloomberg, the commission is finishing its largest antitrust case against the tech giant and may file an action in the coming weeks.
The action will contend that Amazon unfairly disadvantaged merchants that don’t employ “optional” services like “Fulfilled by Amazon,” according to Bloomberg and sources. The FTC could argue that Amazon should be broken up or reformed if it can prove it is distorting a market where it has monopoly power.
However, it’s difficult: Amazon grew fat on the idea that even a monopoly that looks, behaves, and talks like one isn’t one if consumers aren’t directly affected. Khan notably challenged this concept in a long law review paper that made her a rising star and possibly the largest threat to a similarly burgeoning tech industry.
However, this would be the strongest test of her claim that monopoly can take different forms, such as Amazon. It would be a seismic shift in regulation if she could prove that utilizing network effects and unlimited resources to undercut and replace competitors is a new and dangerous kind of market domination.
Amazon has been sued by the FTC three times in the past month. Amazon settled claims that its Ring brand doorbells allowed customers to eavesdrop on them and that Alexa “flouted” child data privacy rules. Last Monday, a third lawsuit accused the online retailer of fraudulent subscription tactics.
The goal is to submit before FTC logistical issues in August. Thus the previous two months have been spent organizing and filing the complaint. It’s been years since the case began.
Khan’s frequent criticism of Amazon has led Amazon to claim that she “no longer can consider the company’s antitrust defenses with an open mind.” That objection has been considered, although Khan may still need to be cautious to avoid becoming the case’s decisive element. I’ve contacted Amazon and the FTC for comment and will update if they respond.
