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Amazon to soon face big FTC antitrust suit over online marketplace power, report says

Amazon CEO Andy Jassy speaks during the GeekWire Summit in Seattle, Oct. 5, 2021.

David Ryder | Bloomberg | Getty Images

Amazon will soon face a long-anticipated antitrust lawsuit from the Federal Trade Commission, Bloomberg reported Thursday.

The complaint is expected to focus on Amazon’s online marketplace and how the company uses its power to favor merchants that use its logistics services, Bloomberg reported based on documents it reviewed and three unnamed sources familiar with the case. The complaint could be filed in the coming weeks, Bloomberg said.

Such a lawsuit would be a huge milestone for FTC Chair Lina Khan, who became a known figure in the antitrust world in 2017 when The Yale Law Journal published her note, “Amazon’s Antitrust Paradox.” In it, Khan argued that the prevailing antitrust framework at the time failed to adequately assess Amazon’s vast power and the ways it could use it to harm competition.

Her past writing is part of what sparked Amazon to ask for her recusal from its antitrust cases because the company believes she lacks impartiality in the matter. Meta made a similar request, but Khan has so far declined to sit out.

The FTC has already taken action against Amazon in other areas, including a recent consumer protection lawsuit alleging the platform has used deceptive tactics to get users to sign up for its Prime subscriptions and “sabotaged” their attempts to cancel. It also recently settled two separate cases alleging privacy lapses in its Alexa voice assistant and Ring video security products.

But the antitrust complaint against Amazon’s core business is the action most FTC watchers have been waiting for. According to Bloomberg, the expected complaint is based in part on evidence the FTC has collected that Amazon allegedly disadvantages sellers that don’t use its logistics services.

While it’s possible for both parties to reach a settlement before charges are formally filed, Khan has signaled she prefers structural changes such as breakups over promises from companies to change their behavior, which make a settlement less likely.

The FTC and Amazon declined to comment to CNBC.

Read the full story on Bloomberg.

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