FTC Chief Lina Khan Targets Amazon’s Core Business with Antitrust Lawsuit

**FTC to File Antitrust Suit Against Amazon’s Marketplace**

The Federal Trade Commission (FTC), led by Lina Khan, is preparing to file a significant antitrust suit against Amazon’s core online marketplace. The agency alleges that Amazon abuses its power to favor merchants who use its logistics services and unfairly punish those who do not. After months of honing the complaint, Khan and her team are eager to file the suit before personnel changes in August. However, the timing may be subject to change. Khan has been a vocal critic of Amazon and has argued for the need to reform the company to address its market dominance.

**Khan’s Appointment and Amazon’s Recusal Demands**

Khan’s appointment to lead the FTC has given a boost to the Biden administration’s crackdown on Big Tech. Her focus has extended to not only Amazon but also Google and Meta Platforms Inc. (formerly Facebook), and an investigation into Apple. Amazon has demanded that Khan recuse herself from handling the company’s cases due to her public statements about the company. Despite a non-binding recommendation from the agency’s top ethics official to step aside, Khan has continued to lead the case against Meta. The ethics memo does not directly address the recusal for Amazon cases, but two judges have ruled that Khan’s participation in cases filed in federal court is permissible.

**The Main Allegation Against Amazon**

The FTC’s anticipated antitrust suit against Amazon’s marketplace revolves around the company’s treatment of third-party sellers. These sellers make up more than half of Amazon’s online sales and are subject to commissions and fees for services such as warehousing, shipping, and advertising. The FTC has gathered evidence suggesting that Amazon discriminates against sellers who do not use its services, and the agency is investigating an algorithm that determines which sellers are featured in the “Buy Box.” The expected allegations resemble those made in a 2020 US House subcommittee report, in which Khan was involved, and align with an ongoing European antitrust case against Amazon.

**Opposition to Compromises and Amazon’s Customer Focus**

Khan has expressed opposition to potential compromises between the FTC and Amazon, stating that the agency would strongly disfavor such remedies. Amazon has long emphasized its customer-centric approach, but the FTC has taken issue with this claim. This upcoming antitrust suit will mark the fourth case this year in which the FTC has challenged Amazon’s commitment to its customers. Previous cases have centered around the company’s mishandling of children’s data collected by its Alexa speakers, privacy concerns with its Ring doorbells and cameras, and allegations of deceptive practices related to Prime membership.

**The Long Road to the Antitrust Probe**

The FTC’s antitrust investigation into Amazon’s marketplace has been in progress for several years. The initial investigation notice was sent to Amazon in June 2019, and subsequent document requests followed. The FTC sought information regarding Amazon’s warehousing and delivery services’ impact on third-party sellers’ product placement, as well as any arrangements with Apple. Additional scrutiny was directed towards Apple’s direct sales agreement with Amazon, which affected Apple resellers. Throughout 2020 and 2021, Amazon provided the FTC with substantial amounts of information. Khan’s appointment in June 2021 resulted in a reshaping of the investigation, with a renewed focus on Amazon’s practices.

**Khan Faces Criticism and Amazon’s Defense**

As the FTC prepares to file the antitrust suit, Khan is likely to face significant criticism from business interests that are apprehensive about her hardline approach and management of the agency. Amazon is expected to mount a defense against the allegations, as it has done with previous antitrust legislation proposed by Congress. The company has spent millions on lobbying efforts and launched campaigns to oppose these bills.

In conclusion, the FTC, led by Lina Khan, is gearing up to file a substantial antitrust suit against Amazon’s marketplace. The agency alleges that Amazon unfairly favors merchants who use its logistics services and penalizes those who do not. Khan’s appointment to lead the FTC has heightened the scrutiny on Big Tech companies like Amazon. Amazon has called for Khan’s recusal from handling its cases, but she has continued to lead the charge. The upcoming suit is expected to challenge Amazon’s treatment of third-party sellers and its customer-centric claims. The FTC’s investigation into Amazon has been ongoing for years, and Khan has played a critical role in reshaping the probe. As the suit is filed, Khan is likely to face criticism, and Amazon will mount a defense against the allegations.

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