By: John Garrasi
It is hard for younger generations to imagine a time before Amazon. The convinience and speed with which consumers are now able to have groceries, clothing, and movies delivered to their doorsteps seems to be the embodiment of American consumerism and instant gratification. Millions upon millions of Americans take advantage of Amazon’s services each and every day, and the e-commerce behemoth collects nearly half of all the dollars spent online by American consumers. From the humble beginnings of the internet’s early dot-com boom, Jeff Bezos’ vision of an online bookstore has come to dominate the American economy in ways that are hard to fathom for the average customer. Yet, that road to dominance has been paved with anticompetitive practices that harm almost all consumers, alleges the FTC in a filing late last month.
In their complaint, the FTC claims that Amazon has been built on a long history of anti-competitive practices, including forcing sellers on its platform to use Amazon’s costly logistical services. If a seller elects to opt out, they are no longer eligible for the “Prime” designation on Amazon’s platform, which is a heavy draw for consumers when making purchase decisions.
Amazon also stands accused of punishing their sellers if they advertise lower prices on their goods elsewhere. If a seller elects to do so, their products are “downgraded” on Amazon’s search results, inevitably impacting that seller’s bottom-line. Amazon has developed enormous “surveillance networks” to monitor the pricing of items and ensure that their platform carries the lowest price. In doing so, Amazon has effectively ensured pricing controls across the internet, and in some cases even in the physical retail world as well.
FTC Chair Lina Khan has long had Amazon in her sights, going back to her days at law school where she wrote the now-infamous note “Amazon’s Antitrust Paradox.” Khan has championed the argument that regulators should no longer look to the “short-term price effects” within a given market to analyze anticompetitive practices. Instead, Khan argues, regulators should consider the economics of platform markets and look at how corporations pursue growth over profits.
This suit could amount to the Biden Aministration’s most important contribution to the field of antitrust law, fighting the ever-increasing power of “Big Tech” and its growing economic power. The FTC has asked for both injunctive relief against the offending practices, as well as potential “structural changes” that may include breaking up parts of Amazon’s business. While it is difficult to imagine what this would look like, it appears that the only realistic move forward that would lead to meaningful change would be structural change, as Amazon has previously found ways around judicial decisions crafted to curtail some of its worst behaviors. Furthermore, Amazon has shown little hesitation to use all tools at it’s disposal to creatively craft both company policy and strategy in order to maintain market dominance.
Despite the implications that this case may have on the future of antitrust regulation, the FTC faces an uphill battle against the tech behemoth. The government’s arguments, while echoing many of the traditional arguments underpinning antitrust law, seek to expand upon novel legal theories about just what constitutes harm to consumers. Amazon’s response to the FTC complaint illustrates the company’s commitment to their argument that their practices actually enhance the competitive landscape, and amount to little more than economically prudent business savvy. Perhaps most crucially, Amazon’s legal resources dwarf that of the federal government in practice.
Amazon has operated with relative impunity for the better part of two decades in America. With the CEO’s sights set not only on economic dominance in financial markets but also dominance in the science spaces as well, it is hard to understate the gravity of the stakes at play in this case. With the relative freedom from accountability Amazon has enjoyed thus far, the company has simultaneously enjoyed an oversized impact on wages, employee rights, and physical retailers across the country. The only sane option that remains on the path forward is to reign in companies like Amazon who subvert the will of the people that it supposedly serves, and restore the truly free market competition on which the country has thrived in years past.
Student Bio: John Garrasi is a second-year student at Suffolk University Law School. He is a staff writer on the Journal of High Technology Law, and received a Bachelor of Arts degree in Political Science from the University of Massachusetts in Boston, Massachusetts.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
