Amazon FTC lawsuit

Minnesota's AG Keith Ellison joins FTC Chairwoman Lina Khan in her monomaniacal pursuit of , Amazon.com. From the :

Minnesota Attorney General Keith Ellison today joined the Federal Trade Commission and a bipartisan coalition of 17 state attorneys general today to , alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power...

The case largely rests on of "squeezing merchants and favoring its own services" to gain power over competitors and suppliers and drive up prices.

But credibly calling Amazon a "monopolist" requires Ellison to address :

• Amazon "accounts for less than a third of total e-commerce sales in the US" (and even less of all retail)

• Growing competition: eg, Wal-Mart has "averaged 39% annual growth over the last four years"; "Shopify has more than tripled its revenue over just the past three years precisely by powering e-commerce sales"; " have gained customers in the U.S. as other players such as Amazon...stagnate or decrease"

• Amazon has "the lowest operating margins among its big tech peers, and the company’s retail operations have lost money in seven of the last eight quarters"

That doesn't sound like the ruthless and mythical monopolist to be feared.

And finally, Ellison claims Amazon's tactics make it "harder for all of us to afford our lives". Do you believe that? Is Ellison right to go after Amazon?

Amazon is facing its first set of antitrust charges from the U.S. federal government after the Federal Trade Commission filed its long-anticipated lawsuit against the e-commerce and cloud giant.

The complaint accuses Amazon of wielding its “monopoly power” to artificially raise prices, degrade quality for shoppers and stifle competition.

The lawsuit is a major milestone for FTC Chair Lina Khan, who rose to prominence for her 2017 Yale Law Journal note, “Amazon’s Antitrust Paradox.”

Federal Trade Commission Chair Lina Khan joins Jon Stewart to discuss her work with the “small but mighty” government agency in protecting Americans against unfair business practices. They discuss the agency’s antitrust lawsuit against Amazon, successes within the healthcare industry, and if there’s an arms race between tech companies to wield control over artificial intelligence.

Apple apparently did not allow Stewart to have on Lina Khan for his previous show. Or to

Relevance to BP: Corporate censorship, monopolies, and FTC actions have been widely covered by Breaking Points. Lina Khan's interview is a meaningful update to the conversation. (For instance her announcement that 3/4 manufacturers of inhalers will be lowering their price to $35/month.)

Oct 2, 2023

The U.S. government has filed a landmark antitrust lawsuit against Amazon, pointing to a set of familiar features that have made, the internet retail giant so beloved by consumers.

Karen Weise, a technology correspondent for The Times, explains why those features may actually be illegal.

On today's episode:
, a technology correspondent for The New York Times.

Background reading:

• , saying its conduct in its online store and services to merchants illegally stifled competition.

• The company says it will contest the lawsuit.

You can listen to the episode .

Amid all of this jockeying, real clashes against corporate power are afoot: There is a landmark trial against Google underway, joined by a newly launched suit against Amazon. The mere fact of the confrontations is already reshaping power relations.

Of course, Warren never got a chance to staff up a Clinton administration. Instead, Khan went to the House Judiciary Committee, where she led a major investigation into the monopolistic practices of Apple, Amazon, Google, and Facebook. Kanter formed his own law firm targeting those types of firms. By the time Joe Biden was elected, Warren’s Rolodex of populist staffers had grown deeper, and she successfully placed many in key positions, including Khan as chair of the Federal Trade Commission and Kanter as head of the Justice Department’s antitrust division. The most corporate-friendly Biden cabinet member, Gina Raimondo, wound up as commerce secretary, and was horrified at the number of progressive staffers she saw salted throughout the Biden administration. “You know, they didn’t elect Elizabeth Warren president,” she fumed to Chief of Staff Ron Klain, according to Franklin Foer’s new book on the early Biden administration

This week, Kanter’s team was in court squaring off against Google, accusing it of abusing its market power over search, while Khan teamed with 17 state attorneys general to file a landmark suit against Amazon, alleging abuse of third-party sellers and other unfair competition practices. It was years in the making, but the showdown over corporate power is now underway.

FURTHER EXPLANATION OF THE LAWSUIT

Essentially, the U.S. government is alleging that Amazon uses an interconnected set of illegal actions to strong-arm marketplace sellers in ways that drive up prices for consumers no matter where they shop.

For example, the lawsuit claims that if companies that sell products on Amazon want to charge lower prices on their websites or at other retail stores, the company makes it nearly impossible for shoppers to find or buy their products on Amazon.

In a response to the lawsuit, Amazon said businesses that sell products on its shopping site set their own prices independently. Amazon said that, like other retailers, it gives product sellers information to “help them offer competitive prices.” The government says that, as a result, other stores can’t compete on price, and Americans pay higher prices than they would otherwise.

The lawsuit also alleges that Amazon coerces merchants to pay for add-on services such as storing their products in Amazon warehouses, shipping their orders using Amazon delivery services and buying advertisements promoting their products on Amazon’s website and app. Amazon says all those add-on services are optional. But the government lawsuit said they’re optional in name only.

Amazon charges marketplace businesses a sales commission of something like 15 percent of the total price of a product. (Amazon’s commission varies by the type of product.)

But because of various other fees that the government says aren’t really optional, the company typically keeps for itself more than 50 percent of the total product price, according to estimates by e-commerce research firm Marketplace Pulse.

Does anyone think or is there a chance that this lawsuit will directly or indirectly stop Amazon from requiring eBook exclusivity from with in order to be in KU? Seems like, from the lawsuit’s general allegations about monopolization of third parties and driving down competitive prices through various tactics, that the lawsuit could indirectly stop Amazon from doing this in KU, or impact it in such a way as to force a change in practices. Smart-lawyerly-authors rejoice… this is your chance to shine!

Any of you feel guilty for using Kindle (Amazon)? The more I see them run others out of business and function as a monopoly the less comfortable I am with supporting Amazon. Now the FTC has an antitrust lawsuit against Amazon. Just wondering, anyone else feel this way?