FTC v Amazon: The Modern Monopoly Question

In September 2023, the U.S. Federal Trade Commission (FTC), along with 17 state attorneys general, filed a lawsuit against Amazon U.S. under antitrust law. The case alleges that Amazon has been employing unfair practices to maintain monopoly power in online retail and marketplace services. This is a significant case as it marks one of the major cases in U.S. antitrust law in relation to Big Tech’s digital dominance since the lawsuit against Microsoft in the 1990s.

The FTC’s Claim – ‘Amazon is a monopoly that uses punitive and coercive tactics’

Fundamentally, the FTC’s claim alleges that Amazon has unlawfully dominated the online superstore market and the online seller services market through anti-competitive practices. For instance, anti-discounting rules, whereby Amazon penalises sellers who offer lower prices for their products listed on other platforms, as well as conditioning seller visibility and Prime eligibility on utilisation of Amazon’s fulfilment services (FBA).

Amazon’s Defence – ‘The FTC’s case would harm consumers and competition’

Amazon and its legal team, comprising Williams & Connolly LLP, Covington & Burling LLP, Paul, Weiss, as well as the in-house team, deny engagement in monopolistic activity. Amazon has argued that it is faced with intense competition with other U.S. businesses such as Walmart and Target. Furthermore, Amazon develops its case from a ‘pro-consumer’ perspective rather than exclusionary anti-competitive behaviour, alleging that the lawsuit would lead to more expensive products and slower deliveries on the part of the consumer.

Where are we now?

The outcome of this case will significantly impact Big Tech’s behaviour in relation to competition law, potentially redefining the balance between innovation and regulation. The case also reflects a wider global trend towards scrutinising Big Tech’s market power, with regulators in the UK and EU pursuing similar actions against Google, Apple, and Meta. Nevertheless, it is unlikely that the outcome will be revealed anytime soon, given the determination of the FTC and Amazon’s apparent confidence, and a trial would not conclude for a number of years. However, the question here remains: will competition law bend to Big Tech’s will, or vice versa?