FTC’s Case Against Amazon Gets Worse and Worse

Washington, D.C. (6/3/2024) – As the Federal Trade Commission’s (FTC) case against Amazon continues, the agency’s flawed reasoning and failure to prioritize consumers’ best interests continue to be exposed. 

Most recently, the American Booksellers Association (ABA) filed a motion to join the FTC’s lawsuit against Amazon because they complained that Amazon drives down book prices. Naturally, the agency refused to support the ABA’s motion because the FTC’s lawsuit hinges on the claim that Amazon raises prices – a fact that the ABA is helping prove to be false. As the Wall Street Journal opined last week, 

“The Biden Administration’s antitrust policy is an intellectual and legal mess these days, and look no further than the Federal Trade Commission’s curious move last week to oppose booksellers that want to join its lawsuit against Amazon. FTC Chair Lina Khan doesn’t want the booksellers contradicting her arguments in court…

“The Chair’s problem is that most evidence contradicts her claims that Amazon raises prices. What does it say when her own supporters disagree with her dubious legal theories?”

In another major moment for the case, the FTC requested the court to bifurcate its case against Amazon, splitting the case into two separate liability and remedies phases. According to CCIA President Matt Schruers,

The motion underscores the underlying factual and legal weaknesses of the agency’s investigation and raises serious concerns about the government’s intended remedies…

“The conduct alleged to violate the law is so intertwined with the company’s core business practices, that any liability discussion would need to include the consideration of remedy proposals to address the underlying alleged competitive harms…” 

“By calling into question the propriety of integrating different offerings, the FTC’s case goes even further, harming not just one aspect of a product offering, but businesses across the entire technology sector.

Both of these moments point to the major question at hand: is the FTC working in the best interest of consumers? Clearly, the answer is no. As the International Center for Law and Economics’ Geoffrey Manne and Dirk Auer write

“The complaint focuses on how hard it is for rivals to reach Amazon’s scale or compete with its huge range of services. But Amazon has succeeded because consumers want those services, and Amazon can provide them better and cheaper than others. We should encourage — not discourage — such conduct. The complaint also relies on economic arguments that stretch the imagination…”

The FTC’s case against Amazon is just one example of the agency’s “know it when you see it” approach to antitrust regulation, which has even threatened the small- and medium-sized businesses the FTC claims it wants to protect.