Big Tech’s real cage match is between Jeff Bezos and Lina Khan
Amazon, Facebook, and The FTC: The Mueller Investigation into Amazon’s Consumer E-Commerce Crime and Influence on Its Platforms
According to an FTC release, the suit targets parts of Amazon’s business that service consumers and sellers. The agency has accusations that Amazon penalizes sellers for offering lower-priced products on different platforms and restricts which sellers are eligible for Prime shipping benefits. The agency is also targeting Amazon’s ability to bias its search results in favor of the company’s own products.
The FTC has been looking into other areas of Amazon’s business as well, including Amazon’s Ring doorbell service. Earlier this year, Amazon agreed to pay $5.8 million to settle an FTC lawsuit that accused Ring workers and hackers of illegally spying on customers. Amazon paid $25 million to settle a complaint from the FTC in which it was accused of violating federal laws by storing recordings of children’s voices.
The Amazon investigation prompting Tuesday’s suit started under Joe Simons, the former FTC chair under Donald Trump. The investigation against Facebook was diverted due to the Cambridge Analytica scandal. Khan, the current FTC chair, has long criticized Amazon’s e-commerce dominance and bulked up the agency’s ongoing Amazon probe after her 2021 confirmation.
The FTC was unsuccessful in its attempts to block Microsoft’s acquisition of tHe company, and lost a lawsuit against Meta, the parent company of Facebook.
As FTC chair, Khan positioned herself as an aggressive regulator, unafraid to challenge companies in court and undeterred by the prospect of some losses.
As a Democratic counsel for the House Judiciary Committee, Khan helped write a report calling for “structural separations” of Apple, Amazon, and Facebook. They “have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the report said.
Amazon has established itself as one of the largest companies in the US that can deliver more packages than FedEx. It has become one of the world’s most valuable corporations due to the fact that it ventured into healthcare, home security and other fields.
Though Amazon’s growth has slowed, it’s the most popular online store in the U.S., capturing over 40% or more of all online shopping, according to private and government research. Consumer Intelligence Research Partners think that two-thirds of Americans are members of Amazon’s Prime service.
The Amazon FTC Action: Why Mr. Bezos and Ms. Khan Are Not F.T.C. Interested in the Future?
The FTC did not want to break up the company. Instead, it asked the court for a permanent injunction, although this could change down the road. The case is expected to play out over several years.
On a day-to-day basis, Mr. Bezos is no longer in charge of Amazon. Andy Jassy took over as chief executive two years ago. No, Mr. Bezos is the head of Amazon and has more of the company than anyone else. It is his innovations, carried out over more than 20 years, that Ms. Khan is challenging. The F.T.C. complaint quotes him a lot.
If Ms. Khan’s arguments hold sway, the competitive landscape for tech companies will look very different going forward. Big antitrust cases tend to have that effect. The government achieved only a muddled victory in its pursuit of Microsoft 25 years ago. Yet that still had enough force to distract and weaken a much-feared software empire, allowing 1,000 start-ups to bloom, including Amazon.
Silicon Valley spent the summer transfixed by the prospect of Elon Musk and Mark Zuckerberg literally fighting each other, despite the odds of this actually happening being near zero. A court battle between Mr. Bezos and Ms Khan could have implications for other businesses, as well as for Amazon.
