Antitrust violations: FTC plans to indict Amazon in several cases

Antitrust violations: FTC plans to indict Amazon in several cases

The US Trade Commission (FTC) is seeking to bring charges against Amazon for antitrust violations in several cases. The antitrust lawsuit could be filed in federal court as early as next week. Politco reports this, citing three unnamed people familiar with the matter. The FTC and its head Lina Khan have therefore targeted several of Amazon’s business practices.

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Amazon Violations

The online retail giant is accused, among other things, of unknowingly misleading customers into taking out an Amazon Prime subscription using so-called “dark pattern” technology and making it more difficult for US customers to cancel the paid service. Additionally, Prime membership would “transform casual shoppers into loyal followers” and make Amazon the default company for its online purchases, according to Bloomberg.

The FTC, which is responsible for consumer protection and competition in the USA, sees further violations in the rules for Amazon Marketplace, which would disadvantage third-party sellers on the largest Internet trading platform. On the one hand, Amazon unlawfully binds third-party providers to the use of its logistics service, and on the other hand, the marketplace rules prohibit offers of the same item at cheaper prices on other platforms. In addition, Amazon forces retailers to use Amazon’s advertising services, various media reports.

States should join the lawsuit

According to Politico, the lawsuit, the exact details of which are not yet known and which has been in preparation since at least the beginning of this year, could be filed in federal court as early as Tuesday. However, changes and delays are still possible before the official submission.

The FTC wants to “encourage as many states as possible to join the lawsuit,” according to people familiar with the matter, and has “sent a draft of the complaint to each state’s attorney general’s office.” They did not explain exactly which states these were. Possible negotiations with individual US states could also lead to a delay in the filing of the lawsuit.

Lina Khan

In addition to the FTC lawsuit, California and Washington, DC have already sued Amazon. Investigations are also ongoing in Washington state and New York. Lina Khan is also in favor of a “realignment of antitrust law” – she became known for her essay “Amazon’s Antitrust Paradox”. Amazon – following Khan’s appointment as head of the FTC by US President Joe Biden in March 2021 – called for the withdrawal of all antitrust investigations against e-commerce giants, arguing in a 25-page petition that “Kahn in antitrust matters affecting the company could not be impartial because, as a scientist and author, she had strongly criticized Amazon,” the New York Times reported at the time. Facebook also asked for Khan’s removal from its antitrust case around the same time.

According to Poltico, the outcome of any lawsuit against Amazon is “years in the future, long after Khan has left the agency” – and “the FTC will likely seek to break up the company based on Khan’s previous statements.”

(bme)

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