Policy Backgrounders

FTC v. Amazon

October 06, 2023

The US Federal Trade Commission (FTC) and a bipartisan group of 17 states launched an antitrust lawsuit against Amazon.com. The suit alleges the company has illegally used monopoly power to restrict competition among online platforms, effectively preventing third-party sellers on Amazon from doing business on their own terms on competing platforms, while at the same time favoring Amazon’s own products and products of third-party sellers that enroll in Amazon’s premium search and logistics services. Most basically, the FTC argues that a “single company, Amazon, has seized control over much of the online retail economy.”

• The case is an important test of the continued relevance of the “consumer welfare” standard to digital platforms, with the FTC seeking to prove that Amazon’s practices that adversely affect Amazon’s third-party sellers and competing platforms ultimately harmed consumers as well as competition. Amazon will argue the suit departs from current antitrust law because its practices benefited user experience and lowered prices.
• FTC Chair Lina Khan—who has focused on competition among large tech platforms—stated she intends to move the case “expeditiously” and will seek an injunction on Amazon’s anticompetitive practices as well as “structural relief,” which could mean asset divestiture or breaking up a business. Realistically, it could take years for the case to come to trial.
• The lawsuit is the latest effort by antitrust regulators to promote competition on the largest tech platforms, following ongoing cases and investigations into Google, Meta, and Apple. The FTC is seeking a high-profile win in the Amazon case after losing court battles that would have blocked recent acquisitions by Meta and Microsoft on antitrust grounds.