Amazon to Hold Meeting with US FTC Ahead of Potential Antitrust Lawsuit
Next week, Amazon.com will meet with the US Federal Trade Commission (FTC) as discussions regarding a potential antitrust lawsuit against the company gain momentum. Sources familiar with the matter have confirmed the impending meeting.
The FTC initiated its investigation into Amazon, along with Google, Facebook, and Apple, during the previous administration of President Donald Trump. The purpose of the probe was to examine allegations of antitrust violations. Amazon has specifically faced criticism for allegedly showing preference to its own products and disadvantaging third-party sellers on its platform. The company, however, has consistently denied any wrongdoing.
During the upcoming meetings, Amazon is expected to present arguments against the FTC filing an antitrust lawsuit. Typically, the FTC holds meetings with companies following in-depth investigations before deciding whether to proceed with legal action. The FTC declined to comment on the scheduled meeting.
Interestingly, before assuming her role as FTC chair, Lina Khan authored an article titled “Amazon’s Antitrust Paradox” in 2017, which explored the inadequacy of focusing solely on price as a measure of antitrust violations.
Numerous allegations have been leveled against Amazon. Critics claim that the company uses third-party data to make decisions about product offerings, prioritizes its own goods over independent sellers, and mandates Prime sellers to utilize Amazon’s logistics and delivery services. Amazon has also been accused of leveraging its gatekeeper status by denying rival companies the ability to advertise against its products on the platform. Additionally, it has been alleged that Amazon maintains artificially low prices on goods and services, including its Prime offerings, to retain customers.
Labor abuse and depression of wages are further concerns associated with Amazon’s operations, with the company employing approximately 1.5 million people worldwide.
The investigations into Amazon, Google, Facebook, and Apple initiated by the Trump administration prompted a comprehensive report from a House of Representatives panel, highlighting the dominant positions held by these tech giants in their respective industries. While the US Justice Department has filed two lawsuits against Google, one related to its search business and the other addressing advertising technology, Meta’s Facebook has been sued by the FTC. None of these cases have gone to trial as of yet.
In June, the FTC filed a lawsuit against Amazon, alleging that the company had involuntarily enrolled millions of consumers into its paid subscription service, Amazon Prime, while making it difficult for them to cancel. Amazon promptly refuted these claims, stating they were unfounded both factually and legally.
Furthermore, the FTC reached a $5.8 million settlement with Amazon’s Ring doorbell camera unit in May, following revelations that the cameras had been used for unauthorized surveillance. Additionally, in May, Amazon agreed to a $25 million settlement with the FTC over allegations of violating children’s privacy rights by retaining Alexa virtual assistant recordings for longer than necessary.
With the possibility of an antitrust lawsuit looming, Amazon faces ongoing scrutiny and legal challenges. As stakeholders await the resolution of these issues, the outcome will have far-reaching implications for the e-commerce giant and the wider tech industry.
© Thomson Reuters 2023
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