Report: FTC Prepares Major Antitrust Lawsuit Against Amazon

The FTC is set to file a landmark antitrust lawsuit against e-commerce giant Amazon. The federal agency believes Amazon uses its market dominance to unfairly disadvantage sellers on the platform who don’t use its logistics services.

Bloomberg reports that the FTC lawsuit will primarily focus on Amazon’s online marketplace, accusing the company of exploiting its dominant position to favor sellers on the platform who use its logistics services, while penalizing those who do not.

FTC Chair Lina Khan ( GRAEME JENNINGS/Getty)

An employee carries a package at the distribution center of US online retail giant Amazon in Moenchengladbach, on December 17, 2019. (Photo by INA FASSBENDER / AFP) (Photo by INA FASSBENDER/AFP via Getty Images)

The FTC has reportedly been crafting this complaint for several months, aiming to file before personnel changes scheduled for August. Lina Khan, known for her uncompromising stance against tech behemoths, is expected to remain steadfast in her approach towards Amazon, potentially pushing for a company-wide restructuring.

The case is built on substantial evidence suggesting that Amazon systematically disadvantages sellers who choose not to use its warehousing and delivery services. The agency is particularly scrutinizing an algorithm responsible for selecting merchants for the highly coveted “Buy Box” on the web store.

These allegations echo those outlined in a 2020 report from a US House of Representatives subcommittee and intersect with a European antitrust investigation, which concluded with Amazon modifying its Buy Box practices and restricting the use of third-party seller data on its European web stores.

This lawsuit will mark the FTC’s fourth legal confrontation with Amazon within a year. Previous cases involved allegations of Amazon’s failure to delete children’s data collected through Alexa speakers, illicit surveillance of Ring doorbell and camera users, and deceptive practices related to Prime memberships. While Amazon has consistently disputed the FTC’s allegations, it agreed to a $30.8 million settlement to resolve these cases.

The FTC’s antitrust investigation into Amazon has been ongoing since June 2019, during which the agency has been examining how the use of Amazon’s warehousing and delivery services impacts the placement of third-party sellers’ products.