WSJ - FTC Antitrust Suit Against Amazon Set for Later This Month After Meeting Fails to Resolve Impasse

News for Ecomm Sellers
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WSJ - Sept. 5, 2023 Dana Mattioli

Sept. 5, 2023 5:25 pm ET

Amazon.com (AMZN | Amazon.com Inc. Stock Price & News - WSJ)
officials haven’t offered concessions to the Federal Trade Commission in pursuit of a settlement over antitrust claims, paving the way for the regulator to file a lawsuit later this month, according to people familiar with the matter.

Top members of Amazon’s legal team had a video call with FTC officials on Aug. 15. The so-called last-rites meeting, which is often a final step before a court battle, was a chance for the technology giant to make its case to the regulator to head off a possible lawsuit that officials have been working on for many months.

During such meetings, companies have the opportunity to offer to pre-emptively change their business practices in order to avoid a lawsuit. But, Amazon’s lawyers didn’t offer specific concessions, the people said.

The FTC plans to file its lawsuit against Amazon late this month, one of the people said. The commission in recent years has been examining Amazon practices, including whether it favors its own products over competitors’ on its platforms and how it treats outside sellers on Amazon.com.

The lawsuit will target a number of Amazon’s business practices, such as its Fulfillment by Amazon logistics program and pricing on Amazon.com by third-party sellers, some of the people said. The lawsuit will suggest that Amazon makes “structural remedies” that could lead to a break up of the company.

At the meeting last month, Amazon’s lawyers reiterated the argument to each of the commissioners, including chair Lina Khan, that changes to Amazon could result in higher prices and slower shipping speeds to customers, some of the people said.

The FTC didn’t outline for Amazon what sorts of remedies it would find acceptable, information that Amazon officials had pressed the agency to provide. Given the FTC’s yearslong investigation of Amazon, it is unclear whether concessions would have stopped the agency from filing a lawsuit.

The lawsuit will be a seminal moment for Khan, who rose to fame after the 2017 publication of a Yale Law Journal article that made the case that Amazon wielded too much power.

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The FTC didn’t like Amazon’s POA?

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Nary a bit.

Hence the reason why the last-rites meeting concluded with this twist of the knife:

"…
We will not consider your submission if your request does not provide evidence that you will no longer pose a risk.
…"

:sunglasses:

Traffic along K Street is likely to be feverish over the next few months, methinks.

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To be fair, Amazon’s POA was pretty weak. They didn’t lay out what they did, they didn’t specify what actions they took to remedy the situation, and they didn’t lay out how they were going to avoid the violations in the future.

I bet if they asked SWMNBN for help via her onlyfans she could have spiced that up.

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I’m guessing their POA was too verbose…

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I would pay to watch one of the house members like Katy Porter (or the equivalent on the other side of the aisle) give them a type of reply that they give to sellers like…
“Hello from FTC Support,
We understand your concerns regarding being broken up for unethical and immoral monopolistic practices.
We will assist you on the same and regret an inconvenience caused to you as we understand it is an important component for your business.
Before we can investigate your corporate charter being revoked issue, we require the following information:
A plan of action detailing the root cause of our investigation and what steps you have taken to ensure the problem will not happen again and how you have made things right with the sellers you bilked with your practices.”

You can find more information about this situation by contacting AT@T and Standard Oil representatives.

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I was just thinking that :joy: Love they’re getting a taste of their own medicine.

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Amazon believes Amazon is invincible.

Let’s see if they actually get humbled…

Doubt it strongly.

I want to be wrong!

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Amazon can not be humbled.

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Amazon knows that its lobbying budget practically does.

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I interpret this to mean Amazon stonewalled the FTC.

I expect that is because they believe they can win this case.

Given the results of FTC suits that have recently gone to trial, that could be a proper assumption.

Ms. Khan has made it clear she is willing to blaze new trails.

How do you know who the pioneers are? They are the ones with arrows in their backs.

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I suppose they can also claim so called damages that would be done to their enormous employee base and how any action could jeopardize jobs.

Meanwhile, said employees (and sellers) are treated like dog doo doo by Amazon so in reality, it’s a moot point IMHO.

Someone needs to “go there”, rather than focusing on sheer scale or unfair biz practices because, once again, IMO, that’s the real evil / problem with Amazon.

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Said lawyers were most likely an outside firm and have no understanding of how Amazon actually works. The argument of:

shows the disconnect.

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I understand how Amazon works, and were I to argue their case, I would include the same arguments.

IMO they are correct and can be used to convince a jury or a court in any but the 9th Circuit.

Amazon saves consumers money, not every consumer and not in every category. And it is woven into society at this point - not just the Internet.

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FTC has to get outside the bounds of consumer welfare and make it about product tying, predatory pricing, etc. Items sold by 3P sellers are not cheaper for consumers, even considering the “free” shipping and items that Amazon sells at a loss are subsidized by the fees charged on 3P sales and AWS profits. Unfortunately, the business structure is complicated enough that it doesn’t fit well in traditional antitrust definitions.

I’m currently working on an article about recoupment (the second predatory pricing element), as I suspect this will be one of the more significant hurdles for the FTC. It’s going to be a stretch to convince a court that recoupment has occurred or will occur in the future. Virtually all of our antitrust concepts are based on pre-Internet markets and have a hard time adapting to Internet markets.

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This is the standard argument of every company faced with the suggestion they should do something they don’t want to do. Sometimes it may even be true…

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I think you’re spot on…

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AND the hammer dropped. Feds and 17 States

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6 posts were merged into an existing topic: [FTC] FTC Sues Amazon for Illegally Maintaining Monopoly Power