The Wall Street Journal reports that in meetings with the Federal Trade Commission (FTC) last month, Amazon did not offer any concessions that would have resolved the FTC's antitrust concerns, "paving the way for the regulator to file a lawsuit later this month."
According to the story, "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 Journal writes that the FTC 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."
- KC's View:
Whatever the FTC decides to do - and a lawsuit appears to be a fait accompli - this is going to be a complicated and extended process that is going to play out over years. It seems unlikely that either side is going to roll over.
I'm looking forward to seeing what the FTC alleges in its suit, since much of the speculation that I've seen focuses on stuff that a lot of retailers do, though Amazon admittedly is better and more effective in its implementation.
I gather from my reading that if Amazon is broken up, it could be good news for investors since the company's various parts could have greater value when separated out. If Amazon is correct that a broken-up company would result in higher prices and slower shipping speeds to customers, then the FTC's actions could actually mean a victory for the investor class and bad news for shoppers.
Which likely is not what the FTC intends.