top of page
Search
  • Writer's pictureThe San Juan Daily Star

Amazon to meet regulators as US considers possible antitrust suit


People pass the AmazonGo store in New York, on Aug. 1, 2023. Amazon’s meetings with the Federal Trade Commission, known as “last rites” meetings, are typically a final step before the agency votes on filing a lawsuit.

By David McCabe


Amazon is scheduled to meet with members of the Federal Trade Commission next week to discuss an antitrust lawsuit that the agency may be preparing to file to challenge the power of the retailer’s sprawling business, according to a person with knowledge of the plans.


The meetings are set to be held with Lina Khan, the FTC chair, and Rebecca Kelly Slaughter and Alvaro Bedoya, who are FTC commissioners, said the person, who spoke on the condition of anonymity because the discussions are confidential.


The meetings signal that the FTC is nearing a decision on whether to move forward with a lawsuit alleging that Amazon has violated anti-monopoly laws. Such discussions are sometimes known as “last rites” meetings, named after the prayers some Christians receive on their deathbed. The conversations, which are usually one of the final steps before the agency’s commissioners vote on a lawsuit, give the company a chance to make its case.


If the FTC files suit, it would be one of the most significant challenges to Amazon’s business in the company’s nearly 30-year history. Amazon, a $1.4 trillion behemoth, has become a major force in the economy. It now owns not just its trademark online store, but the movie studio Metro-Goldwyn-Mayer, the primary care practice One Medical and the high-end grocery chain Whole Foods. It is also one of the world’s largest provider of cloud computing services.


The FTC has investigated Amazon’s business for years. The company’s critics and competitors have argued that the once-upstart online bookstore has used its retailing clout to squeeze the merchants that use its platform to sell their wares.


U.S. officials have grown increasingly concerned about the influence and reach of giant tech companies like Amazon, Google and Meta, which owns Facebook and Instagram. The Justice Department has filed several antitrust lawsuits against Google, with two scheduled to go to trial next month. The FTC has also sued Meta over accusations that it snuffed out young competitors by buying Instagram and WhatsApp.


Some of those efforts have stumbled in the courts. Federal judges declined this year to stop Meta from acquiring a virtual reality startup and Microsoft from buying video game powerhouse Activision Blizzard, dooming FTC challenges to both deals. In 2022, the Justice Department also lost its bid to challenge UnitedHealth Group’s plan to buy a health tech company.


Stacy Mitchell, a co-executive director of the advocacy organization Institute for Local Self-Reliance and an Amazon critic, said she hoped the FTC would pursue a sweeping case against the tech giant. She said the agency should focus on how Amazon’s control of the retail business — from its store to its logistics network that delivers packages — let it hurt competitors and merchants.


“It’s a watershed moment,” she said. “What we need to see from the FTC is a case that targets the core of Amazon’s monopolization strategy.”


Amazon has said that it competes aggressively with other retailers and that efforts to regulate its business would only hurt consumers and the businesses that sell products through its site.


Under the leadership of CEO Andy Jassy, Amazon has recently been in retrenchment mode. The company has cut costs, laying off thousands of workers as growth slumped after a soaring period fueled by the pandemic. Last week, Amazon announced that its revenue in the second quarter of the year had increased 11%, to $134.4 billion, beating analysts’ expectations.

In June, the FTC sued Amazon in a separate case that accused the company of tricking users into subscribing to its Prime fast-shipping membership program and then making it difficult for them to cancel.


Amazon has also faced scrutiny from states and regulators in other countries. The District of Columbia’s attorney general filed a lawsuit against the company in 2021, arguing that it had used unfair pricing policies against merchants on its site. The lawsuit was thrown out by a judge, though the attorney general has tried to revive the case. California filed a similar lawsuit last year that has been moving forward. In December, Amazon also reached a deal to end a European Union antitrust investigation by agreeing to change some of its practices.


If the FTC sues, it would formally pit Khan — who has been one of Amazon’s most prominent detractors — against the company.


While a law student at Yale, Khan had argued that Amazon’s growth represented a failure of American antitrust laws, which she said had become myopically focused on consumer prices as a measure of whether businesses were violating the law. Amazon’s prices were often low, she wrote in a widely read 2017 paper, but that failed to account for other ways it could bully players across the economy.


The paper’s success supercharged a debate in Washington about the power of the tech giants. In 2019, federal antitrust regulators decided to investigate some of the companies. In keeping with a long-standing practice of dividing responsibilities, the Justice Department agreed to look at Google and Apple while the FTC examined Facebook and Amazon.


President Joe Biden named Khan to oversee the FTC — giving her control of the Amazon investigation — roughly two years later.

13 views0 comments

Recent Posts

See All

Comments


bottom of page