FTC sues Amazon for antitrust violations, seeks to break up its online empire
The Federal Trade Commission (FTC) filed a lawsuit against Amazon on Tuesday, accusing the online retail giant of violating antitrust laws and harming competition and consumers. The lawsuit is one of the most aggressive and high-profile moves in the Biden administration’s effort to curb the power of tech giants.
The FTC alleges that Amazon has used its dominant position in online retail to exclude, disadvantage, and raise costs for rivals, as well as to exploit sellers and customers on its platform. The lawsuit targets several of Amazon’s business practices, such as its Prime membership, its pricing rules, and its logistics and advertising services.
The FTC is seeking a court order that would require Amazon to divest some of its assets, such as its cloud computing division AWS, its grocery chain Whole Foods, and its streaming service Prime Video. The FTC also wants to prohibit Amazon from engaging in any conduct that would prevent or deter competition in online retail.
The lawsuit is the culmination of a nearly two-year investigation by the FTC, which was led by Chair Lina Khan, who was appointed by President Joe Biden in June. Khan is a prominent critic of Amazon and other tech giants, and wrote an influential article on the antitrust case against Amazon as a law student.
“Lina Khan is not afraid to take on the biggest, most powerful companies in the world. She has a clear vision of how to protect consumers and promote competition in the digital age,” said Sen. Elizabeth Warren (D-Mass.), who has been a vocal critic of tech giants.
The FTC is trying to get as many states as possible to join the case, which would show bipartisan support. So far, 12 states have agreed to participate, including California, New York, Texas, and Florida.
The lawsuit could have significant consequences for Amazon’s $1.35 trillion empire and for the future of online commerce. If successful, it could result in a court-ordered reorganization of Amazon’s operations and establish a precedent for other antitrust cases targeting technology giants.
Two anonymous sources familiar with the matter stated that in order for the FTC to proceed with a lawsuit against Amazon, it is necessary to secure the participation of as many states as possible in the complaint. This bipartisan coalition of states would serve as a significant indication of support for the case, particularly due to the absence of any confirmed Republican appointees within the agency. The nominees for these vacant positions underwent a Senate hearing earlier this week.
In August, Amazon lawyers and executives held a meeting with Khan and the other two Democratic commissioners in an attempt to prevent a lawsuit. The meeting, known as the last rights meeting, took place virtually on Aug. 15 but did not succeed in convincing the commissioners. According to a separate source familiar with the matter, Amazon believed it lacked sufficient information regarding the FTC’s accusations to make concessions and avoid a lawsuit.
Spokespeople for Amazon and the FTC declined to comment.
Relevant articles:
- A monopoly-busting Amazon lawsuit might be Biden’s boldest move yet to tame tech, POLITICO, 09/22/2023
- FTC may file antitrust suit against Amazon next week: report, MSN, 09/22/2023
- FTC to file antitrust case against Amazon as soon as Tuesday — Politico, MSN, 09/22/2023
- FTC To File Antitrust Lawsuit Against Amazon, Channel News, 09/25/2023
Originally published at https://trendydigests.com on September 25, 2023.
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