US FTC’s Lina Khan Prepares Huge Lawsuit To ‘Break Up’ Amazon
The Lina Khan-led Federal Trade Commission (FTC) in the US is reportedly finalising a massive anti-trust lawsuit against Amazon, a move that could break up parts of the e-commerce giant.
According to a report in Politico, citing people close to the matter, the “wide-ranging lawsuit is expected as soon as August, and will likely challenge a host of Amazon’s business practices.”
The lawsuit might lead to a court-ordered “restructuring of the $1.3 trillion empire”, the report noted.
The FTC has been investigating Amazon for a long time. Among the potential claims are allegations similar to existing cases like Amazon’s rules requiring third-party retailers to offer their lowest prices on its platform.
“The complaint is likely to focus on challenges to Amazon Prime, Amazon rules that the FTC says block lower prices on competing websites, and policies the FTC believes force merchants to use Amazon’s logistics and advertising services,” the report detailed, citing sources.
Both Amazon and the FTC declined to comment.
On Amazon Prime, the FTC is concerned that the “bundle of services is used to illegally cement the company’s market power”.
The FTC last month sued the e-commerce giant Amazon over alleged 'deceptive' tactics to sign up customers for its Prime service.
The complaint, filed in the federal court in the US city of Seattle, said that for years, Amazon has "knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service".
"Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as 'dark patterns' to trick consumers into enrolling in automatically-renewing Prime subscriptions," read the FTC complaint.
Amazon Prime costs $139 per year and gives consumers access to free two-day shipping, along with access to Prime Video and music streaming.
"Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money," FTC Chair Khan had said in a statement.
"These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from "dark patterns" and other unfair or deceptive practices in digital markets," she added.
An Amazon spokesperson had said that the FTC's claims are false on the facts and the law.
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7 months ago
This is in reply to Mr. Kamal Garg who has given the example of Vodafone.
I was a Vodaphone subscriber for more than 10 years. The service deteriorated. Two years back I changed to Jeo. Extremely happy, not only about the charges but also about the reception everywhere and very low International Roaming Charges of Rs. 2 per minute. I am in USA for past 5 months and my monthly bill is in the range of Rs. 250-300.
The point is "customer is King and the efficient Companies will always be the King" whatever be the Competition.
It is the same case of MTNL Internet Service. EExcept for feeding their employees what other purpose they are serving?
Kamal Garg
Replied to shetyerb comment 7 months ago
Correct. So the competition has to be there and customer has to be treated like a King or Queen. No monopolistic or restrictive practices should be allowed.
My reference to Vodafone Idea was only to illustrate that there has to be a reasonable number of players in any market/industry which will promote fair competition while still not creating any monopoly leading to unfair and restrictive practices.
What GoI did is a different matter out of context for this blogpost - the reference was only to highlight, as rightly said by you, that customer is king and there has to be a fair competition in the industry/market place.
Kamal Garg
7 months ago
Someone has to think of dealing with such monopolies in India also. All big companies, particularly e-commerce companies practice blatantly monopolistic, restrictive and anti-legal activities. Mind it, Indian laws are different than American laws.
I hope author and other writers recall the plea of Vodafone Idea with the GoI that this country must have three large telecom players, apart from a government owned fourth one, so that there can be a level playing field and competition among the service providers.
7 months ago
Except for the clause of "third party retailers offering their LOWEST PRICE on Amazon Platform" there does not appear to be any restrictive clause WORTH the US Government meddling with. I am an Amazon user for several years and have found them very useful to save my time and money which I use elsewhere to MY Benefit. I used Amazon Prime in the years I needed it, but did not find AUTOMATIC RENEWAL.
I wish there are more Amazons irrespective of Ms. Khan.
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