Brian Sozzi
·Executive Editor
Wed, September 6, 2023
Amazon (AMZN) investors may have to endure some near-term black clouds as the Federal Trade Commission (FTC) lurks.
"Anytime something regulatory comes into the headline, it's going be an overhang," Goldman Sachs managing director Eric Sheridan told Yahoo Finance Live at the Goldman Sachs Communacopia and Tech Conference in San Francisco (video above). "I will tell you until this lawsuit probably gets filed, the next three weeks will be investors asking me, 'What do you think is going to be in it, and what could the potential outcomes be?'"
An Amazon Prime logo appears on the side of a delivery van as it departs an Amazon Warehouse location in Dedham, Mass. (Steven Senne/AP Photo, File)
Sheridan provides coverage on Amazon, Meta, and other big-cap tech companies for clients. He has Amazon as his "top pick" for the next 12 months.
The two mega forces appear to be on a collision course.
Execs at Amazon haven't offered concessions to the FTC in the pursuit of a settlement regarding antitrust claims, The Wall Street Journal reported on Wednesday. That has reportedly set the table for the FTC to file a lawsuit against Amazon later this month with an eye toward breaking up the e-commerce and cloud computing powerhouse.
A spokesperson for Amazon declined to comment to Yahoo Finance on the matter.
However, Sheridan added: "We still put a low probability on [a breakup of Amazon]."
Investors appear to be assigning the same low probability to an Amazon breakup too.
Amazon stock closed out six straight months in the green in August, Yahoo Finance's Allie Garfinkle pointed out. That rise, which marked Amazon's longest consecutive streak of monthly gains since July 2011, was fueled by better-than-expected second quarter earnings.
The tech giant has gained more than $400 billion in market cap since the beginning of its winning streak. Shares are up 62% year to date, outperforming the 16% gain for the S&P 500.
FTC may file suit against Amazon later this month - WSJ
Reuters
Tue, September 5, 2023
A logo of Amazon is seen on a company's logistics centre
(Reuters) -The U.S. Federal Trade Commission may file a lawsuit later this month against Amazon.com after the company did not offer concessions to settle antitrust claims, the Wall Street Journal reported, citing people familiar with the matter.
The lawsuit will target the company's logistics program, Fulfillment by Amazon, pricing on its website by third-party sellers and will suggest "structural remedies" that could break the company up, the report said on Tuesday.
Amazon and the regulator declined to comment when contacted by Reuters.
The company's shares, which have gained about 63% so far this year, edged 0.4% lower in extended trading.
The probe began during former President Donald Trump's administration when the government decided to investigate Amazon, Google, Meta Platforms and Apple for allegedly breaking antitrust law.
Amazon has been criticized for allegedly favoring its own products and disfavoring outside sellers on its platform, among other allegations. The company has denied the allegations.
FTC chairperson Lina Khan authored a Yale Law Journal article in 2017, in which she said Amazon's structure and practices posed anticompetitive concerns and has escaped antitrust scrutiny.
In June, the regulator sued Amazon accusing the company of enrolling millions of consumers into its $139-per-year paid subscription service without their consent and making it hard for them to cancel the plan.
(Reporting by Akash Sriram in Bengaluru and Diane Bartz in Washington; Editing by Sriraj Kalluvila)
Reuters
Tue, September 5, 2023
A logo of Amazon is seen on a company's logistics centre
(Reuters) -The U.S. Federal Trade Commission may file a lawsuit later this month against Amazon.com after the company did not offer concessions to settle antitrust claims, the Wall Street Journal reported, citing people familiar with the matter.
The lawsuit will target the company's logistics program, Fulfillment by Amazon, pricing on its website by third-party sellers and will suggest "structural remedies" that could break the company up, the report said on Tuesday.
Amazon and the regulator declined to comment when contacted by Reuters.
The company's shares, which have gained about 63% so far this year, edged 0.4% lower in extended trading.
The probe began during former President Donald Trump's administration when the government decided to investigate Amazon, Google, Meta Platforms and Apple for allegedly breaking antitrust law.
Amazon has been criticized for allegedly favoring its own products and disfavoring outside sellers on its platform, among other allegations. The company has denied the allegations.
FTC chairperson Lina Khan authored a Yale Law Journal article in 2017, in which she said Amazon's structure and practices posed anticompetitive concerns and has escaped antitrust scrutiny.
In June, the regulator sued Amazon accusing the company of enrolling millions of consumers into its $139-per-year paid subscription service without their consent and making it hard for them to cancel the plan.
(Reporting by Akash Sriram in Bengaluru and Diane Bartz in Washington; Editing by Sriraj Kalluvila)
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