Monday, June 17, 2024

Lina Khan’s FTC to file major anti-trust lawsuit against Amazon: Report

Lina Khan-run US Federal Trade Commission (FTC) is reportedly set to file a major antitrust lawsuit against Amazon, focused on the e-commerce giant’s core online marketplace and how it uses its power to favour merchants that use its logistics services.

The FTC is preparing the lawsuit, accusing Amazon of “leveraging its power to reward online merchants that use its logistics services and punish those who don’t,” reports Bloomberg.

The report described the upcoming lawsuit as “the big one,” following several earlier lawsuits filed by the FTC under Chairman Khan. The complaint against Amazon could be filed in the coming weeks.

The lawsuit is likely to allege that Amazon systematically disadvantages merchants who don’t use certain “optional” services like “Fulfilled by Amazon.”

Khan may try to force Amazon to “restructure” its business. “Based on her public comments, Khan is unlikely to accept compromises from Amazon and could seek to restructure the company — a dramatic outcome that Amazon would surely appeal,” the report noted.

Amazon did not immediately comment on the report.

Khan is known to be a staunch critic of Amazon before becoming FTC chair in 2021. In 2017, Khan wrote a Yale Law Journal article titled “Amazon’s Antitrust Paradox”. The FTC has already taken up Amazon for three separate and unrelated issues recently.

Last week, the FTC sued the e-commerce giant over alleged ‘deceptive’ tactics to sign up customers for its Prime service.

The complaint, filed in the federal court in the US city of Seattle, said that for years, Amazon has “knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service”.

“Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions,” read the FTC complaint.

An Amazon spokesperson said that the FTC’s claims are false on the facts and the law.

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