The Federal Trade Commission is preparing to file a mammoth antitrust lawsuit against Amazon that will target the e-commerce giant’s core online business, according to a report.
The federal agency headed by longtime Amazon critic Lina Khan is set to accuse the Seattle-based company of improperly wielding its dominance to reward online merchants that use its logistics services while penalizing those who do not, Bloomberg News reported.
Third-party merchants on Amazon pay the company commissions on each sales as well as for services including warehousing, shipping, and advertising.
While the fees are optional, most merchants end up paying them because the FTC alleges that Amazon’s algorithm places them at a competitive disadvantage if they don’t, according to Bloomberg News, which cited three people familiar with the matter.
The FTC’s reported allegation dovetails with a European antitrust case which accused Amazon of breaching competition rules by favoring merchants that used its logistics and delivery system over other sellers.
Amazon and the European Commission reached a settlement in the matter.
The Post has sought comment from Amazon.
The FTC declined to comment.
Khan and her investigators at the FTC have reportedly been prepping the lawsuit for months, sources told Bloomberg News.
The court papers are expected to be filed before the agency undergoes significant personnel changes in August, according to the news site.
Khan is expected to seek a restructuring of Amazon’s business model — a development that will likely prompt the firm to appeal, according to Bloomberg News.
Under Khan, the 34-year-old antitrust crusader who wrote a scholarly paper on Amazon’s market dominance while a student at Yale Law School, the FTC has filed three lawsuits against Amazon.
Amazon has demanded that Khan recuse herself from antitrust probes into its business given her past criticisms of the company — to no avail.
Last week, the agency sued Amazon for allegedly engaging in a years-long effort to enroll consumers without consent into Amazon Prime and making it difficult for them to cancel their subscriptions.
The FTC accused Amazon of using deceptive designs, known as “dark patterns,” to deceive consumers into enrolling in Prime, which provides subscribers with perks such as faster shipping for a fee of $139 annually, or $14.99 a month.
The FTC said Amazon made it difficult for customers to purchase an item without also subscribing to Prime.
In some cases, consumers were presented with a button to complete their transactions — which didn’t clearly state it would also enroll them in Prime.
Amazon denied the FTC’s allegations.
“The FTC’s claims are false on the facts and the law,” Amazon spokesperson Heather Layman said in a statement. “The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership.”
Earlier this month, Amazon agreed to pay a $25 million civil penalty to settle allegations it violated a child privacy law for storing kids’ voice and location data recorded by its popular Alexa voice assistant.
It also agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its doorbell camera Ring.
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