Amazon deprives competitors of critical mass: FTC Chair Lina Khan
Amazon’s antitrust suit culmination of years of work from FTC’s Khan
Alexis Keenan
·Reporter
Wed, September 27, 2023
A day after the US Federal Trade Commission and 17 states filed a landmark antitrust case against online retail giant Amazon (AMZN), the agency’s chair Lina Khan said Amazon.com is depriving online superstore competitors of the critical mass needed to compete.
“In short, Amazon has a policy that punishes sellers or retailers that lower their price anywhere other than Amazon,” Khan said in an interview Wednesday with CNBC. “At the same time, Amazon is also steadily hiking the fees the seller pays. Sellers have to inflate their price not just on Amazon, but also across the rest of the internet.”
The novel argument is expected to be a tough one for the agency.
FTC filed an antitrust case against Amazon on Tuesday. (Paul Sakuma/AP Photo)
Antitrust law, designed to protect consumers through open competition, regards low prices as evidence that consumers' interests are served. While the agency admits that Amazon's policies push sellers to offer their products at the lowest prices on Amazon, it argues Amazon’s prices never dip as low as they would in a genuinely competitive market.
The company’s scale, the FTC claims, ensures that some sellers must sell on Amazon.com to survive. And with the market cornered, it slowly increased fees charged to sellers for each sale, according to the agency.
“The consequences of that are very serious for sellers who now pay one out of every $2 to Amazon,” Khan told CNBC. “So this is effectively a 50% tax that businesses pay to Amazon to reach shoppers. And that, in turn, leads prices and it inflates prices across the internet.”
The FTC says Amazon is illegally monopolizing two markets: online superstore retail — where consumers shop for products — and online superstore retail services — where sellers list, sell, and ship their items.
Amazon responded to the FTC’s complaint saying the agency's theory is wrong.
“The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store," David Zapolsky, Amazon senior vice president of global public policy and general counsel, said in a statement.
"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do.”
At Amazon's request, portions of the FTC's claims were redacted from the publicly filed version of its lawsuit. In her interview on Wednesday, Khan said the complaint contains direct evidence of Amazon hiking prices and steadily increasing fees charged to its third-party sellers.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
Judge assigned to US antitrust case against Amazon recuses himself
Reuters
Wed, September 27, 2023
(Reuters) - The judge assigned to the U.S. Federal Trade Commission's antitrust lawsuit against Amazon.com has recused himself from the case, according to a court document filed on Wednesday.
Senior Judge John Coughenour was assigned to the case on Tuesday, when the antitrust lawsuit was filed against Amazon in federal court in Seattle. Coughenour, an appointee of Republican former President Ronald Reagan, did not cite a reason for dropping off the case in the court filing.
The case has been re-assigned to U.S. District Judge John Chun based on rotation, according to the document.
Chun was nominated by President Joe Biden last year. He was previously a judge for the Washington State Court of Appeals.
The FTC in its lawsuit accused Amazon of abusing its power in the retail market as an ecommerce giant by unfairly giving preference to its own products and punishing merchants that want to sell products for lower prices on other platforms.
Amazon is facing a series of similar but smaller private consumer cases filed in recent years that are pending in the same U.S. federal court with Judge Ricardo Martinez and the FTC has argued its case should be assigned to the same judge to avoid duplication or conflict.
(Reporting by Abhirup Roy and Mike Scarcella; Editing by Leslie Adler)
Factbox-Amazon antitrust lawsuit latest in US efforts to rein in big firms' clout
Reuters
Wed, September 27, 2023
(Reuters) - U.S. antitrust regulators on Tuesday filed a lawsuit against Amazon.com accusing the online retailer of harming consumers with higher prices, the latest in a long history of tough action against monopolies that can be traced back to the breakup of Standard Oil.
More recently, Federal Trade Commission (FTC) regulators have targeted Big Tech including Alphabet's Google and Meta Platforms' Facebook.
Here is a list of attempts by regulators to split up big companies:
Standard Oil (1911)- Regulators alleged John Rockefeller's Standard Oil held the monopoly in the oil business by using aggressive pricing to eliminate competition. Standard Oil was broken up into 34 companies. Some of these independent firms now include ExxonMobil and Chevron.
Aluminum Company of America (Alcoa) (1945)- The Justice Department charged Alcoa with illegally monopolizing the aluminum market and demanded the company be dissolved. The case lasted years and the government sold aluminum production plants built during the war to Reynolds Aluminum and Kaiser Aluminum, creating a competitive market.
Paramount Pictures (1948) - The U.S. Supreme Court ruled in a landmark antitrust case, also known as "Paramount case" or the "Hollywood antitrust case," that film studios could not legally own their own theaters, hitting the vertical integration of companies. It forced Paramount to cleave theaters from the studios.
IBM (1982) - The U.S. government initiated an antitrust investigation into the dominance of IBM that lasted for 13 years. The case was later withdrawn and the IT software and services provider remained intact.
AT&T (1984) - In 1974, the U.S. government filed an antitrust lawsuit against AT&T because it had a monopoly on telephone lines. After eight years of litigation, the two sides reached a settlement that led to AT&T giving up control of its regional operating companies, or "Baby Bells".
Microsoft (2001) - A U.S. District Judge ordered a breakup of the company over antitrust claims but appellate judges rejected it. The Justice Department and Microsoft reached a settlement in November 2001.
Meta Platforms (2023) - An appeals court ruled in favor of Meta by refusing to revive a lawsuit filed by states against its Facebook unit over alleged antitrust law violations.
Both the FTC and the states had asked the court in 2020 to order Facebook to sell Instagram, which it bought for $1 billion in 2012, and WhatsApp, which it bought for $19 billion in 2014.
(Reporting by Jaspreet Singh and Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila and Josie Kao)
Factbox-FTC's Amazon complaint zeros in on seller prices, logistics
Reuters
Wed, September 27, 2023
WASHINGTON (Reuters) - The U.S. Federal Trade Commission filed a lawsuit against Amazon.com that accused the online retail giant of overcharging customers and independent sellers on its platforms as the $1 trillion company sought to illegally maintain monopoly power.
These are the specific allegations included in the FTC's 172-page complaint:
ONLINE SUPERSTORE, SERVICES MONOPOLIES
*The agency alleged that Amazon had a monopoly in an online superstore market. In 2021, Amazon had 77% of the market, Walmart had 13% and Target 2%.
*The agency also said that Amazon had a monopoly in the online marketplace for services, where Amazon has more than 70% of the market. The FTC said that more than 160 million people in the United States visit Amazon's website each month.
PUNISHES SELLERS FOR LOWER PRICES ELSEWHERE
* The complaint alleged Amazon uses a sophisticated network of web crawlers that identify which of its sellers offer their products more cheaply on other platforms. Amazon allegedly punishes those sellers, who make up about 60% of Amazon's sales, by making them harder to find on its platform.
"Because Amazon's anti-discounting conduct punishes sellers who offer lower prices at rival online stores with lower fees, many sellers set their price on Amazon- high fees and all - as the price floor across the internet," the FTC said in the complaint.
REQUIRES USING AMAZON LOGISTICS
* Amazon requires sellers under Amazon's Prime feature to use the company's logistics and delivery services even though many would allegedly prefer to use a cheaper service or one that would also service customers from other platforms where they sell.
CHARGES HIGH FEES
*The complaint alleges Amazon raised average fulfillment fees to sellers about 30% between 2020 and 2022, as well as requiring them to pay for referrals and advertising. The FTC alleged that between sellers paying for search placement, fulfillment and other charges that Amazon takes nearly half of what sellers make on their sales.
MONITORING PRICES
* Amazon used the Project Nessie pricing system as an unfair method of competition. A description of Project Nessie was heavily redacted. An Amazon blog described it as "a system used to monitor spikes or trends on Amazon.com."
(Reporting by Diane Bartz; Editing by Jamie Freed)
Reuters
Wed, September 27, 2023
(Reuters) - The judge assigned to the U.S. Federal Trade Commission's antitrust lawsuit against Amazon.com has recused himself from the case, according to a court document filed on Wednesday.
Senior Judge John Coughenour was assigned to the case on Tuesday, when the antitrust lawsuit was filed against Amazon in federal court in Seattle. Coughenour, an appointee of Republican former President Ronald Reagan, did not cite a reason for dropping off the case in the court filing.
The case has been re-assigned to U.S. District Judge John Chun based on rotation, according to the document.
Chun was nominated by President Joe Biden last year. He was previously a judge for the Washington State Court of Appeals.
The FTC in its lawsuit accused Amazon of abusing its power in the retail market as an ecommerce giant by unfairly giving preference to its own products and punishing merchants that want to sell products for lower prices on other platforms.
Amazon is facing a series of similar but smaller private consumer cases filed in recent years that are pending in the same U.S. federal court with Judge Ricardo Martinez and the FTC has argued its case should be assigned to the same judge to avoid duplication or conflict.
(Reporting by Abhirup Roy and Mike Scarcella; Editing by Leslie Adler)
Factbox-Amazon antitrust lawsuit latest in US efforts to rein in big firms' clout
Reuters
Wed, September 27, 2023
(Reuters) - U.S. antitrust regulators on Tuesday filed a lawsuit against Amazon.com accusing the online retailer of harming consumers with higher prices, the latest in a long history of tough action against monopolies that can be traced back to the breakup of Standard Oil.
More recently, Federal Trade Commission (FTC) regulators have targeted Big Tech including Alphabet's Google and Meta Platforms' Facebook.
Here is a list of attempts by regulators to split up big companies:
Standard Oil (1911)- Regulators alleged John Rockefeller's Standard Oil held the monopoly in the oil business by using aggressive pricing to eliminate competition. Standard Oil was broken up into 34 companies. Some of these independent firms now include ExxonMobil and Chevron.
Aluminum Company of America (Alcoa) (1945)- The Justice Department charged Alcoa with illegally monopolizing the aluminum market and demanded the company be dissolved. The case lasted years and the government sold aluminum production plants built during the war to Reynolds Aluminum and Kaiser Aluminum, creating a competitive market.
Paramount Pictures (1948) - The U.S. Supreme Court ruled in a landmark antitrust case, also known as "Paramount case" or the "Hollywood antitrust case," that film studios could not legally own their own theaters, hitting the vertical integration of companies. It forced Paramount to cleave theaters from the studios.
IBM (1982) - The U.S. government initiated an antitrust investigation into the dominance of IBM that lasted for 13 years. The case was later withdrawn and the IT software and services provider remained intact.
AT&T (1984) - In 1974, the U.S. government filed an antitrust lawsuit against AT&T because it had a monopoly on telephone lines. After eight years of litigation, the two sides reached a settlement that led to AT&T giving up control of its regional operating companies, or "Baby Bells".
Microsoft (2001) - A U.S. District Judge ordered a breakup of the company over antitrust claims but appellate judges rejected it. The Justice Department and Microsoft reached a settlement in November 2001.
Meta Platforms (2023) - An appeals court ruled in favor of Meta by refusing to revive a lawsuit filed by states against its Facebook unit over alleged antitrust law violations.
Both the FTC and the states had asked the court in 2020 to order Facebook to sell Instagram, which it bought for $1 billion in 2012, and WhatsApp, which it bought for $19 billion in 2014.
(Reporting by Jaspreet Singh and Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila and Josie Kao)
Factbox-FTC's Amazon complaint zeros in on seller prices, logistics
Reuters
Wed, September 27, 2023
WASHINGTON (Reuters) - The U.S. Federal Trade Commission filed a lawsuit against Amazon.com that accused the online retail giant of overcharging customers and independent sellers on its platforms as the $1 trillion company sought to illegally maintain monopoly power.
These are the specific allegations included in the FTC's 172-page complaint:
ONLINE SUPERSTORE, SERVICES MONOPOLIES
*The agency alleged that Amazon had a monopoly in an online superstore market. In 2021, Amazon had 77% of the market, Walmart had 13% and Target 2%.
*The agency also said that Amazon had a monopoly in the online marketplace for services, where Amazon has more than 70% of the market. The FTC said that more than 160 million people in the United States visit Amazon's website each month.
PUNISHES SELLERS FOR LOWER PRICES ELSEWHERE
* The complaint alleged Amazon uses a sophisticated network of web crawlers that identify which of its sellers offer their products more cheaply on other platforms. Amazon allegedly punishes those sellers, who make up about 60% of Amazon's sales, by making them harder to find on its platform.
"Because Amazon's anti-discounting conduct punishes sellers who offer lower prices at rival online stores with lower fees, many sellers set their price on Amazon- high fees and all - as the price floor across the internet," the FTC said in the complaint.
REQUIRES USING AMAZON LOGISTICS
* Amazon requires sellers under Amazon's Prime feature to use the company's logistics and delivery services even though many would allegedly prefer to use a cheaper service or one that would also service customers from other platforms where they sell.
CHARGES HIGH FEES
*The complaint alleges Amazon raised average fulfillment fees to sellers about 30% between 2020 and 2022, as well as requiring them to pay for referrals and advertising. The FTC alleged that between sellers paying for search placement, fulfillment and other charges that Amazon takes nearly half of what sellers make on their sales.
MONITORING PRICES
* Amazon used the Project Nessie pricing system as an unfair method of competition. A description of Project Nessie was heavily redacted. An Amazon blog described it as "a system used to monitor spikes or trends on Amazon.com."
(Reporting by Diane Bartz; Editing by Jamie Freed)
The FTC just hit Amazon with a major antitrust lawsuit
Taylor Hatmaker
Tue, September 26, 2023
Image Credits: Sheldon Cooper/SOPA Images/LightRocket / Getty Images
The Federal Trade Commission made its big move against online shopping giant Amazon on Tuesday, accusing the company of illegally stifling competition on its way to becoming a ubiquitous retail presence and one of the world's most valuable companies.
Attorneys general from 17 states joined the FTC in the lawsuit, alleging that Amazon leverages a "set of interlocking anticompetitive and unfair strategies" to maintain a monopoly. The states that signed onto the FTC's action are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.
"The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them," FTC Chair Lina M. Khan said. "Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition."
Amazon predictably pushed back against the FTC's allegations, which could amount to an existential threat to the company's market dominance.
"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do," Amazon General Counsel David Zapolsky said. "The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The FTC and its state partners allege that Amazon has violated antitrust law in two distinct areas: its vast online storefront for shoppers and its seller-side marketplace. Amazon's practice of punishing sellers that offer lower prices away from Amazon and its strategy of aggressively funneling sellers toward obtaining Prime status for their goods are among the anti-competitive tactics the FTC named in the lawsuit.
"Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers," Deputy Director of the FTC Bureau of Competition John Newman said. "Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."
The FTC accuses Amazon of 'monopolistic practices' in long-expected antitrust suit
It claims the retailer prevented vendors from selling products for less elsewhere.
Will Shanklin
·Contributing Reporter
Tue, September 26, 2023
The Federal Trade Commission (FTC) filed an antitrust lawsuit against Amazon today in Western Washington district court, with 17 states joining the federal agency. The case isn’t surprising (the FTC was reportedly nearly ready to file in late August), but its specifics weren’t yet known.
The FTC accuses the online retailer of monopolistic practices, including preventing merchants from offering lower prices on other platforms and forcing them to use Amazon’s logistics service if they wanted to be included in customers’ Prime shipping perks. Those anticompetitive practices allegedly led to higher prices and an inferior shopping experience.
The suit describes “Amazon's one-two punch of seller punishments and high seller fees” that forces vendors to “use their inflated Amazon prices as a price floor everywhere else.” The complaint reads, “Amazon's punitive regime distorts basic market signals: one of the ways sellers respond to Amazon's fee hikes is by increasing their own prices off Amazon.”
“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said FTC chair Lina Khan, according to The New York Times.
“Amazon is a monopolist,” the lawsuit reads. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.”
The 17 states joining the FTC include New York, Connecticut, Pennsylvania, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island and Wisconsin.
The FTC has had its eye on Amazon for several years. This is the fourth action the agency has taken against the company this year. Amazon settled a previous lawsuit (for $30.8 million) filed in May over Alexa children’s privacy concerns and snooping with Ring cameras. In June, the FTC sued the retailer again, claiming the company tricked customers into signing up for Prime subscriptions and then made it hard to cancel them.
Amazon claimed that the FTC’s actions are out of line. “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Amazon's Senior Vice President of Global Public Policy and General Counsel. “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The media’s narrative about the suit will likely frame it as a long-awaited title bout between Khan and Amazon. The FTC chair gained prominence by publishing a 2017 Yale Law Journal paper arguing US antitrust laws fell short of adequately reining in the tech giant. That helped begin a national conversation about whether the nation’s anti-monopoly laws were prepared to handle modern Silicon Valley behemoths.
But more important than one-on-one championship fight framing, the showdown will serve as a test for Washington regulators and Amazon, as the federal agency tests its authority and the retailer faces its most consequential political fight to date.
FTC, 17 states file antitrust suit against Amazon
Clarissa Hawes
Taylor Hatmaker
Tue, September 26, 2023
Image Credits: Sheldon Cooper/SOPA Images/LightRocket / Getty Images
The Federal Trade Commission made its big move against online shopping giant Amazon on Tuesday, accusing the company of illegally stifling competition on its way to becoming a ubiquitous retail presence and one of the world's most valuable companies.
Attorneys general from 17 states joined the FTC in the lawsuit, alleging that Amazon leverages a "set of interlocking anticompetitive and unfair strategies" to maintain a monopoly. The states that signed onto the FTC's action are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.
"The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them," FTC Chair Lina M. Khan said. "Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition."
Amazon predictably pushed back against the FTC's allegations, which could amount to an existential threat to the company's market dominance.
"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do," Amazon General Counsel David Zapolsky said. "The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The FTC and its state partners allege that Amazon has violated antitrust law in two distinct areas: its vast online storefront for shoppers and its seller-side marketplace. Amazon's practice of punishing sellers that offer lower prices away from Amazon and its strategy of aggressively funneling sellers toward obtaining Prime status for their goods are among the anti-competitive tactics the FTC named in the lawsuit.
"Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers," Deputy Director of the FTC Bureau of Competition John Newman said. "Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."
The FTC accuses Amazon of 'monopolistic practices' in long-expected antitrust suit
It claims the retailer prevented vendors from selling products for less elsewhere.
Will Shanklin
·Contributing Reporter
Tue, September 26, 2023
The Federal Trade Commission (FTC) filed an antitrust lawsuit against Amazon today in Western Washington district court, with 17 states joining the federal agency. The case isn’t surprising (the FTC was reportedly nearly ready to file in late August), but its specifics weren’t yet known.
The FTC accuses the online retailer of monopolistic practices, including preventing merchants from offering lower prices on other platforms and forcing them to use Amazon’s logistics service if they wanted to be included in customers’ Prime shipping perks. Those anticompetitive practices allegedly led to higher prices and an inferior shopping experience.
The suit describes “Amazon's one-two punch of seller punishments and high seller fees” that forces vendors to “use their inflated Amazon prices as a price floor everywhere else.” The complaint reads, “Amazon's punitive regime distorts basic market signals: one of the ways sellers respond to Amazon's fee hikes is by increasing their own prices off Amazon.”
“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said FTC chair Lina Khan, according to The New York Times.
“Amazon is a monopolist,” the lawsuit reads. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.”
The 17 states joining the FTC include New York, Connecticut, Pennsylvania, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island and Wisconsin.
The FTC has had its eye on Amazon for several years. This is the fourth action the agency has taken against the company this year. Amazon settled a previous lawsuit (for $30.8 million) filed in May over Alexa children’s privacy concerns and snooping with Ring cameras. In June, the FTC sued the retailer again, claiming the company tricked customers into signing up for Prime subscriptions and then made it hard to cancel them.
Amazon claimed that the FTC’s actions are out of line. “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Amazon's Senior Vice President of Global Public Policy and General Counsel. “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The media’s narrative about the suit will likely frame it as a long-awaited title bout between Khan and Amazon. The FTC chair gained prominence by publishing a 2017 Yale Law Journal paper arguing US antitrust laws fell short of adequately reining in the tech giant. That helped begin a national conversation about whether the nation’s anti-monopoly laws were prepared to handle modern Silicon Valley behemoths.
But more important than one-on-one championship fight framing, the showdown will serve as a test for Washington regulators and Amazon, as the federal agency tests its authority and the retailer faces its most consequential political fight to date.
FTC, 17 states file antitrust suit against Amazon
Clarissa Hawes
FreightWaves
Tue, September 26, 2023
The Federal Trade Commission and 17 state attorneys general filed suit against Amazon.com on Tuesday, alleging the e-commerce giant used its monopoly power to “inflate prices, degrade quality and stifle innovation for consumers and businesses.”
The 172-page complaint, filed in the U.S. District Court for the Western District of Washington, alleges Amazon (NASDAQ: AMZN) engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”
The FTC lawsuit, which follows a four-year investigation into the Seattle-based company, states that it’s not the size of Amazon that violates the law, but the the company’s alleged “anticompetitive conduct” — which includes its “online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.”
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina M. Khan said in a statement on Tuesday.
“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”
In the suit, the FTC alleges Amazon has harmed its competition by requiring sellers who want their products to be Prime-eligible to use its logistics platform, Fulfillment by Amazon, which it claims makes it substantially more expensive for sellers on Amazon to also offer their products on other platforms.
Another issue outlined in the FTC suit alleges that Amazon engages in anti-discounting conduct, which “algorithmically punishes sellers” if Amazon discovers they are offering lower-priced goods elsewhere.
“Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible,” the FTC said.
Amazon responds to FTC suit
In a statement, Amazon denied the allegations outlined in the FTC’s lawsuit.
“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, said in a statement. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”
In his statement, Zapolsky said: “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do. The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The company has about 500,000 independent businesses selling goods on its platform in the U.S., which have created 1.5 million jobs, Zapolsky said.
He said that since Amazon opened its business model nearly 20 years ago to include third-party sellers, more than 60% of the company’s sales are from independent sellers, consisting mostly of small and medium-size businesses.
“The FTC’s allegation that we somehow force sellers to use our optional services is simply not true,” Zapolsky said. “Sellers have choices and many succeed in our store using other logistics services or choosing not to advertise with us.”
The states included in the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.
Click here to read more articles by Clarissa Hawes.
Amazon has deep bench of defense lawyers to fight US FTC lawsuit
Amazon faces FTC antitrust suit alleging anticompetitive practices
Tue, September 26, 2023
By Andrew Goudsward and Mike Scarcella
WASHINGTON (Reuters) - The U.S. Federal Trade Commission’s monopoly lawsuit against Amazon.com filed on Tuesday poses perhaps the biggest legal test so far for the platoons of lawyers who have defended the technology giant for years against allegations of antitrust and consumer protection violations.
The long-awaited FTC case against Amazon, joined by 17 state attorneys general, accuses the company of abusing its dominance as an online retailer to thwart competitors and harm sellers and customers that rely on its platform. The company vowed to fight the lawsuit, saying its practices have spurred competition and innovation.
Kevin Hodges, a partner at law firm Williams & Connolly, was the first member of Amazon's defense team identified in a court document in the case. His partner Heidi Hubbard will lead the team, which also includes attorneys from law firm Covington & Burling, according to a person familiar with the hires.
Hubbard and Hodges, who is a former managing partner of the Washington-headquartered firm, are also representing Amazon in an ongoing antitrust lawsuit by California's attorney general accusing the company of forcing artificially high prices on consumers.
Williams & Connolly, known for its focus on litigation, in April successfully defeated a separate private lawsuit accusing the company of curbing competition for shipping and fulfillment services.
Hodges represented state attorneys general who joined the U.S. Justice Department's historic antitrust case against Microsoft in the 1990s and defended BP in lawsuits following the 2010 Gulf of Mexico oil spill, according to court records and his firm's website. He did not respond to a request for comment.
Williams & Connolly is also a lead defense firm in another major antitrust case targeting Big Tech. Partner John Schmidtlein heads a team comprised of several big law firms defending Alphabet's Google in an ongoing landmark trial over the company’s alleged monopoly power in online search.
An Amazon spokesperson did not immediately respond to questions about its legal team. The company is likely to rely on multiple law firms to defend the FTC case.
Amazon General Counsel David Zapolsky, a 24-year veteran of the company's legal department, can turn to a stable of top outside law firms that already represent it.
Covington & Burling, another major Washington firm, worked with Williams & Connolly in 2021 in an unsuccessful attempt to force FTC Chair Lina Khan, a vocal critic of Amazon, to recuse from matters involving the company. Thomas Barnett, co-chair of the firm’s antitrust practice and a former senior Justice Department official, was involved in the effort.
Covington is also representing Amazon in another pending lawsuit brought by the FTC accusing the company of enrolling customers into its paid Amazon Prime service without their consent and making it difficult for them to cancel. The company has denied the allegations.
Covington advised Amazon in two consumer privacy settlements with the FTC in May related to the company’s Alexa voice assistant and Ring home security service.
A Covington spokesperson did not respond to a request for comment on whether the firm is defending Amazon in the FTC antitrust case.
Amazon has also turned to U.S. law firm Paul, Weiss, Rifkind, Wharton & Garrison to navigate government scrutiny. Paul Weiss secured the dismissal of an antitrust lawsuit brought by Washington, D.C.’s attorney general. An appeal remains pending.
The firm joined Covington in negotiating a $25 million Alexa child privacy settlement with the FTC.
(Reporting by Andrew Goudsward and Mike Scarcella in Washington; Editing by David Bario, Matthew Lewis and Marguerita Choy)
Tue, September 26, 2023
The Federal Trade Commission and 17 state attorneys general filed suit against Amazon.com on Tuesday, alleging the e-commerce giant used its monopoly power to “inflate prices, degrade quality and stifle innovation for consumers and businesses.”
The 172-page complaint, filed in the U.S. District Court for the Western District of Washington, alleges Amazon (NASDAQ: AMZN) engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”
The FTC lawsuit, which follows a four-year investigation into the Seattle-based company, states that it’s not the size of Amazon that violates the law, but the the company’s alleged “anticompetitive conduct” — which includes its “online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.”
“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina M. Khan said in a statement on Tuesday.
“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”
In the suit, the FTC alleges Amazon has harmed its competition by requiring sellers who want their products to be Prime-eligible to use its logistics platform, Fulfillment by Amazon, which it claims makes it substantially more expensive for sellers on Amazon to also offer their products on other platforms.
Another issue outlined in the FTC suit alleges that Amazon engages in anti-discounting conduct, which “algorithmically punishes sellers” if Amazon discovers they are offering lower-priced goods elsewhere.
“Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible,” the FTC said.
Amazon responds to FTC suit
In a statement, Amazon denied the allegations outlined in the FTC’s lawsuit.
“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, said in a statement. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”
In his statement, Zapolsky said: “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do. The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”
The company has about 500,000 independent businesses selling goods on its platform in the U.S., which have created 1.5 million jobs, Zapolsky said.
He said that since Amazon opened its business model nearly 20 years ago to include third-party sellers, more than 60% of the company’s sales are from independent sellers, consisting mostly of small and medium-size businesses.
“The FTC’s allegation that we somehow force sellers to use our optional services is simply not true,” Zapolsky said. “Sellers have choices and many succeed in our store using other logistics services or choosing not to advertise with us.”
The states included in the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.
Click here to read more articles by Clarissa Hawes.
Amazon has deep bench of defense lawyers to fight US FTC lawsuit
Amazon faces FTC antitrust suit alleging anticompetitive practices
Tue, September 26, 2023
By Andrew Goudsward and Mike Scarcella
WASHINGTON (Reuters) - The U.S. Federal Trade Commission’s monopoly lawsuit against Amazon.com filed on Tuesday poses perhaps the biggest legal test so far for the platoons of lawyers who have defended the technology giant for years against allegations of antitrust and consumer protection violations.
The long-awaited FTC case against Amazon, joined by 17 state attorneys general, accuses the company of abusing its dominance as an online retailer to thwart competitors and harm sellers and customers that rely on its platform. The company vowed to fight the lawsuit, saying its practices have spurred competition and innovation.
Kevin Hodges, a partner at law firm Williams & Connolly, was the first member of Amazon's defense team identified in a court document in the case. His partner Heidi Hubbard will lead the team, which also includes attorneys from law firm Covington & Burling, according to a person familiar with the hires.
Hubbard and Hodges, who is a former managing partner of the Washington-headquartered firm, are also representing Amazon in an ongoing antitrust lawsuit by California's attorney general accusing the company of forcing artificially high prices on consumers.
Williams & Connolly, known for its focus on litigation, in April successfully defeated a separate private lawsuit accusing the company of curbing competition for shipping and fulfillment services.
Hodges represented state attorneys general who joined the U.S. Justice Department's historic antitrust case against Microsoft in the 1990s and defended BP in lawsuits following the 2010 Gulf of Mexico oil spill, according to court records and his firm's website. He did not respond to a request for comment.
Williams & Connolly is also a lead defense firm in another major antitrust case targeting Big Tech. Partner John Schmidtlein heads a team comprised of several big law firms defending Alphabet's Google in an ongoing landmark trial over the company’s alleged monopoly power in online search.
An Amazon spokesperson did not immediately respond to questions about its legal team. The company is likely to rely on multiple law firms to defend the FTC case.
Amazon General Counsel David Zapolsky, a 24-year veteran of the company's legal department, can turn to a stable of top outside law firms that already represent it.
Covington & Burling, another major Washington firm, worked with Williams & Connolly in 2021 in an unsuccessful attempt to force FTC Chair Lina Khan, a vocal critic of Amazon, to recuse from matters involving the company. Thomas Barnett, co-chair of the firm’s antitrust practice and a former senior Justice Department official, was involved in the effort.
Covington is also representing Amazon in another pending lawsuit brought by the FTC accusing the company of enrolling customers into its paid Amazon Prime service without their consent and making it difficult for them to cancel. The company has denied the allegations.
Covington advised Amazon in two consumer privacy settlements with the FTC in May related to the company’s Alexa voice assistant and Ring home security service.
A Covington spokesperson did not respond to a request for comment on whether the firm is defending Amazon in the FTC antitrust case.
Amazon has also turned to U.S. law firm Paul, Weiss, Rifkind, Wharton & Garrison to navigate government scrutiny. Paul Weiss secured the dismissal of an antitrust lawsuit brought by Washington, D.C.’s attorney general. An appeal remains pending.
The firm joined Covington in negotiating a $25 million Alexa child privacy settlement with the FTC.
(Reporting by Andrew Goudsward and Mike Scarcella in Washington; Editing by David Bario, Matthew Lewis and Marguerita Choy)
No comments:
Post a Comment