FTC boss Lina Khan has had her sights set on Amazon for a long time – now she could strike. The US antitrust authorities are preparing a comprehensive lawsuit against the tech giant, with the possibility of it being broken up.
Amazon threatens trouble. No, not from competitors, there are hardly any that can be taken seriously. The biggest threat to the Amazon business model is currently coming from politics, more specifically from the US antitrust authority, the Federal Trade Commission (FTC). Their task is consumer protection and conducting competition investigations.
According to a report in the Wall Street Journal, the FTC plans to file a comprehensive lawsuit against Amazon later this month. This is directed against the company’s logistics program and pricing on third-party websites. The authority proposes “structural remedial measures” that could lead to the break-up of the group.
Amazon should force retailers to buy ads
With the report of the usually well-informed “Wall Street Journal” the speculation about a breakup of the tech giant get new explosiveness. As early as July, Politico magazine reported that the FTC was about to launch a far-reaching lawsuit against Amazon’s business practices.
But what exactly is the FTC accusing Amazon of? Amazon is to force retailers to use the group’s logistics and advertising services. According to insider reports, this emerges from the details of the lawsuit. According to this, Amazon sellers are threatened with losing their top positions if they use other logistics service providers. Merchants would also have to buy ads if they wanted to rank well in search results.
Prime subscribers as victims?
It’s not the first time that the FTC has launched a strike against Amazon — and you certainly can’t blame agency chief Khan for a lack of aggressiveness. She had already had minor and major pinpricks in the past, and it was only in June that she filed a lawsuit against Amazon’s business practices with Prime subscriptions. The group is said to have “knowingly deceived millions of consumers” into “unknowingly registering with Amazon Prime”.
To do this, Amazon used “manipulative, deceptive, or deceptive user interface designs” known as “dark patterns.” In fact, companies that use such “dark patterns” are only pursuing one goal: to manipulate users of websites and apps. Dark patterns trick users into acting against their own interests. Amazon dismissed the allegations as “factually and legally incorrect”.
What is the FTC boss up to against Amazon?
According to market observers, the new lawsuit against Amazon, which is now expected in September, goes far beyond the skirmish surrounding the Prime subscription. Eventually, it could lead to the breakup of Amazon; at least parts of the company would then have to be spun off.
The fact that the FTC might be aiming to break up Amazon – that had already been announced with the Lina Khan personnel. It was not for nothing that Amazon reacted in complete horror to the appointment of the then 32-year-old lawyer as FTC boss two years ago. The e-commerce giant even filed a 25-page complaint at the time, accusing Khan of being biased and biased.
So had Khan already prejudiced Amazon? The fact is: There have been numerous public statements by Khan that Amazon “should be broken up”. In addition, as a student at Columbia Law School, Khan had already published a scientific article in the “Yale Law Journal” in 2017 entitled: “Amazon’s Antitrust Paradox”. In it, she accuses Amazon of exploiting its monopoly position. Kahn argues that the current cartel models failed when assessing tech giants like Amazon.
Joe Biden also has Amazon on the Kieker
But whether Khan is really as impartial as her position actually requires is ultimately irrelevant to Amazon. What matters is the full support of the US President, which Khan obviously enjoys. Because with Joe Biden, there is a president in power in the USA, who has been annoyed by the market power of large tech companies such as Amazon, Google and Meta, which has continued to grow in recent years.
Against this background, he also appointed long-time Google critic Jonathan Kanter to head the competition department in the Ministry of Justice. Timothy Wu, an outspoken advocate of aggressive antitrust crackdowns on the US tech giants, advises the President on competition issues.
Biden has declared the disempowerment of monopolies to be an important goal of his policy; Just a few months after taking office, he himself issued a decree directing the competition authorities to take stronger action against companies that dominate the market. In other words, Khan is acting directly on behalf of the President. This makes them a very dangerous opponent for Amazon.