The FTC’s Suitcase against Amazon: An Overview of Some of the Most Famous Federal Antitrust Cases During the Last Century
The FTC’s lawsuit against Amazon could be related to some of the most famous federal antitrust cases of the last century, such as Standard Oil and Microsoft. a trial is currently taking place regarding the domination of the search-engine market.
The company this year also paid more than $30 million to settle two other FTC lawsuits, which alleged that Amazon failed to delete data on children’s conversations with voice assistant Alexa, and that its employees monitored customers’ Ring camera recordings without consent.
The Amazon investigation prompting Tuesday’s suit started under Joe Simons, the former FTC chair under Donald Trump. The investigation against Meta was diverted after the platform’s Cambridge Analytica scandal. Khan, the current FTC chair, has long criticized Amazon’s e-commerce dominance and bulked up the agency’s ongoing Amazon probe after her 2021 confirmation.
Indeed, the FTC this year lost a lawsuit against Facebook parent Meta over its acquisition of virtual reality company Within Unlimited, and later struck out on its attempt to block Microsoft’s purchase of videogame company Activision Blizzard.
As FTC chair, Khan positioned herself as an aggressive regulator, unafraid to challenge companies in court and undeterred by the prospect of some losses.
Later, as Democratic counsel for the House Judiciary Committee’s antitrust panel in 2020, Khan helped write a 449-page report that called for “structural separations” of Amazon, Apple, Facebook and Google. They “have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the report said.
Amazon has built up one of the largest delivery companies in the U.S. with a web of warehouses, air hubs and trucking operations that ship more packages than FedEx. It has also ventured into healthcare, home security, filmmaking and other fields — becoming one of the world’s most valuable corporations, worth $1.3 trillion.
Though Amazon’s growth has slowed, it’s the most popular online store in the U.S., capturing over 40% or more of all online shopping, according to private and government research. About two-thirds of U.S. adults are members of Amazon’s subscription service, Prime, as estimated by Consumer Intelligence Research Partners.
Amazon vs. Jassy: The Real Thing is in the News for Tech Startups and the Future of the Silicon Valley
The FTC did not immediately seek a breakup of the company. Instead, it asked the court for a permanent injunction, although this could change down the road. The case is expected to last for a long time.
Mr. Bezos, 59, is no longer in charge of Amazon on a day-to-day basis. He surrendered the chief executive reins to Andy Jassy two years ago. But make no mistake: Mr. Bezos is Amazon’s executive chair and owns more of the company than anyone else. It is his innovations, carried out over more than 20 years, that Ms. Khan is challenging. The F.T.C. complaint quotes him repeatedly.
If Ms. Khan’s arguments sway, the landscape for tech companies will look very different going forward. Big antitrust cases tend to have that effect. The government achieved only a muddled victory in its pursuit of Microsoft 25 years ago. Yet that still had enough force to distract and weaken a much-feared software empire, allowing 1,000 start-ups to bloom, including Amazon.
It was impossible for Silicon Valley to ignore the prospect of Mark Zuckerberg and Elon Musk fighting each other. Ms. Khan and Mr. Bezos are, however, the real thing — a courtroom clash that could have implications far beyond Amazon’s 1.5 million employees, 300 million customers and $1.3 trillion valuation.