The FTC challenges Amazon

The FTC surely must be inspired by the story of David and Goliath, because the US regulatory body won’t stop picking fights with tech giants. 

What happened: The US Federal Trade Commission (FTC), alongside 17 states, has filed an antitrust lawsuit against Amazon, claiming the company is a monopoly that illegally crushes its competition, keeps prices inflated for consumers, and traps third-party sellers.  

  • The suit contains 20 separate charges, but the thrust of the case centres around how third-party sellers have no choice but to use Amazon’s Marketplace platform, with many ending up paying nearly 50% of their revenue to Amazon through various fees.
  • Amazon shot back, with a senior VP claiming that the practices in question “have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery for Amazon customers.”

Catch-up: Under Chair Lina Khan, the FTC has made a habit of going after Big Tech, challenging biz practices and acquisitions. Amazon is perhaps the biggest fish yet for Khan, as she made her career with a groundbreaking paper on Amazon’s monopolistic practices.  

Yes, but: Though ambitious, the FTC’s strategy has not yet paid off. This past year, it’s lost cases against both Meta and Microsoft, where it sought to block major acquisitions.

Why it matters: With the Department of Justice also suing Alphabet and Apple, the US government is taking on three of the world’s largest tech companies' business practices. How these all play out will determine if the feds have any chance of reigning them in, or if it’s too little too late.—QH