The FTC has filed an antitrust lawsuit against Amazon that could force major changes to Prime service — which would be bad news for 167 million American members.
The Federal Trade Commission and 17 states have filed a high-profile antitrust lawsuit against Amazon that could force major changes to the popular Amazon Prime service — which would be bad news for its 167 million American members.
Tuesday’s move is hardly surprising.
After all, FTC Chair Lina Khan rose to prominence by calling for antitrust enforcement against Amazon when she was still a Yale University law student and has been a vocal critic of the company ever since.
Unfortunately, the case is reminiscent of Captain Ahab’s doomed pursuit of Moby Dick — it is guided more by desire and ideology than a reasonable assessment of the costs and benefits.
The result will be a wasteful battle all but guaranteed to founder in court.
The agency alleges the tech giant uses data from third-party retailers to bolster its own house brands; leverages its Amazon Prime service to undermine rival delivery networks; boosts its own products relative to other products “Amazon knows are of better quality”; and penalizes retailers who charge lower prices on rival platforms.
Much as in Khan’s early academic work, the underlying theme is that Amazon should not favor its downstream services if doing so hurts rivals.
The FTC seeks a permanent injunction to “pry loose Amazon’s monopolistic control to restore competition,” which could even mean breaking up the platform.
But there are, unsurprisingly, a number of pitfalls that accompany basing a massive antitrust case on a six-year-old law-student paper, and consumers will be caught in the crossfire.
