The Federal Trade Commission (FTC) is reportedly planning on filing a lawsuit against Amazon over its alleged anticompetitive practices. The suit is expected to be filed as early as spring, but it’s still not clear exactly which aspects of the company’s businesses will get more attention from the Commission.
Amazon’s Major Acquisitions
There’s no doubt that the former small online bookstore has metamorphosed into an e-commerce giant, but along with its growth comes more stringent regulations.
Amazon is presently the biggest e-commerce platform, but its business does not solely revolve around its marketplaces. Over the years, Amazon has made some major acquisitions, including Whole Foods, Twitch, and MGM, among others.
Understandably, a government agency that deals primarily with consumer protection and competition issues is concerned about how big and powerful a single company is becoming.
In fact, this is not the first time that the FTC is looking deeper into the company’s operations. The FTC already launched an antitrust probe in December 2021, focusing on AWS, while another probe was conducted last year to look into Amazon’s acquisition of MGM Holdings, Inc.
This time around, the FTC is expected to keep its eyes on Amazon’s $3.9 billion acquisition of One Medical, whose stocks fell 2.7% after it became public that the Commission hired outside economists to help review the deal.
While the details are yet to be revealed, people familiar with the matter say the FTC could be looking at some of Amazon’s old practices that have already been publicly criticized. This includes allegations about Amazon favoring its own private-label brands over those of its selling partners. The FTC may also investigate Amazon’s Prime subscription service bundling practices.
Amazon Has Long Been in the FTC’s Crosshairs
The FTC has a duty to protect consumers and to ensure fair competition in the marketplace. However, it is quite unsurprising that Amazon got a little bit more attention from the Commission after Lina Khan became the FTC chair in 2021.
Ms. Khan’s paper, called Amazon’s Antitrust Paradox, reveals her criticisms of the company before even becoming part of the FTC.
Because of this evident partiality, Amazon filed a petition with the Commission, arguing that Ms. Khan should be recused from “any antitrust investigation, adjudication, litigation, or other proceedings in which Amazon is a subject.”
But as of writing, Lina Khan still sits as chair and is hard at work in investigating possible violations of Big Tech companies. Recently, a federal judge ruled against the FTC, which sought to block Meta’s acquisition of a virtual-reality startup.
Despite the various rumors circulating about the potential antitrust probe, there is still no assurance that the FTC will push through with the lawsuit. Of course, this does not mean that Amazon’s lawyers and executives will sit back as they wait to be summoned in front of the Commission.
We have yet to see the FTC’s next move and how it will affect Amazon in general and its selling partners and customers in particular.