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A major antitrust case against Amazon is reportedly being finalized by the FTC

The outcome of this high-stakes legal battle could reshape the landscape and reevaluation of monopolistic practices
July 3, 2023

The Federal Trade Commission (FTC) is gearing up to launch its most significant antitrust case against e-commerce behemoth Amazon, a development that has been anticipated since the appointment of FTC Chair Lina Khan. Bloomberg reports that the agency is in the final stages of preparing the case and could file a lawsuit within the next few weeks.

Sources familiar with the matter and documents reviewed by Bloomberg indicate that the forthcoming suit will allege that Amazon engages in systematic discrimination against merchants who opt not to use certain "optional" services, such as "Fulfilled by Amazon." By demonstrating that Amazon is intentionally manipulating a market where it holds considerable power, the FTC aims to make the case for the company's breakup or restructuring.

Challenging Amazon's practices won't be an easy task. The company has thrived under the belief that as long as consumers aren't directly harmed, even if it exhibits characteristics of a monopoly, it isn't deemed one. Chair Lina Khan gained recognition by challenging this notion in a comprehensive law review article, establishing herself as a rising star and a significant threat to the burgeoning tech industry.

This upcoming case will serve as a litmus test for Khan's assertion that monopolistic control can manifest in alternative forms, with Amazon serving as a prime example. If she can successfully set a precedent that using network effects and vast financial resources to undercut and supplant competitors represents a new and dangerous form of market control, it would lead to a seismic shift in regulatory practices.

In recent months, the FTC has already scrutinized Amazon on three separate and unrelated issues. The company settled allegations related to its Ring doorbells, which were accused of enabling customer surveillance, as well as allegations of violating child data privacy laws with its Alexa devices. Last week, the FTC brought a third case, accusing the online retailer of deceptive practices linked to its subscription services.

Reports indicate that the FTC is aiming to file the lawsuit before specific logistical concerns arise in August, thus prioritizing the organization and expedient completion of the case over the past few months.

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