business news in context, analysis with attitude

The Wall Street Journal reported on Friday that the Federal Trade Commission "is preparing a potential antitrust lawsuit against Inc. that in the coming months could challenge an array of the tech giant’s business practices as anticompetitive, according to people familiar with the matter.

"The timing of any case remains in flux, some of the people said. The commission also could opt not to proceed, and doesn’t always bring cases even when it is making preparations to do so."

The story suggests that the actual filing of the lawsuit could be some time away - none of the meetings between Amazon and FTC that normally would precede a suit, giving Amazon a last-ditch chance to make its case and avoid a suit, have taken place.

The Journal offers some context:  "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, according to some of the people familiar with the matter. The FTC also has been scrutinizing the company’s Amazon Prime subscription service’s bundling practices, some of the people said. Exactly which aspects of the business the FTC would target in a potential Amazon lawsuit couldn’t be learned.

"Amazon and the FTC declined to comment. The company has said repeatedly that it competes fairly and that its services benefit both customers and sellers on its platform.

If the commission does sue, it would mark a signature moment in the tenure of FTC Chair Lina Khan, who built her career in part by arguing in a widely read academic paper that Amazon had amassed too much market power and that antitrust law had failed to restrain it."

In addition, the Journal writes, "The FTC also has been investigating non-antitrust issues related to Amazon, including whether the company might have used misleading practices to sign up subscribers to its Amazon Prime program, and whether it impedes the ability of consumers to cancel their subscriptions.

"In August, Amazon complained about the FTC’s probe and accused the FTC of making excessive and unreasonable demands on founder Jeff Bezos and company executives. It asked the FTC to quash civil subpoenas issued to Mr. Bezos and Chief Executive Andy Jassy. The FTC largely rejected the request."

KC's View:

So much noise has been made about the FTC going after Amazon that it is hard to imagine some sort of lawsuit doesn't get filed;  my guess is that the FTC will take on Amazon on a number of fronts.

It isn't part of the same probe, but I recommend listening to an interview conducted by Kara Swisher and Scott Galloway on their "Pivot" podcast with Jonathan Kanter, Assistant Attorney General for the Antitrust Division at the US Department of Justice - it is a fascinating conversation that focuses on the general outlines of the government's current approach to antitrust and competition.  I came away from it thinking that lawsuits against the tech giants, brought either of the FTC or DOJ, are more likely than not.

You can find out where to listen to "Pivot" (one of my favorite podcasts) here.