what he would be accused of
The Federal Trade Commission could file a complaint against Amazon for anticompetitive practices. The e-commerce giant would be accused of forcing traders to use its logistics services. One more complaint when three have already been filed.
A few days ago, we reported an FTC complaint for deception: Amazon allegedly encouraged its customers to subscribe to Prime while making it difficult to unsubscribe. Two other complaints have already been filed by the US consumer protection authority. A fourth against Amazon could be added to the list, according to Bloomberg.
Yet another FTC complaint against Amazon
The American agency would plan to file a complaint for anticompetitive practices against Amazon. The firm would be accused of using its stranglehold on the e-commerce market to ” reward online merchants who use its logistics services and punish those who do not“, writing Bloomberg. A complaint that could be filed by FTC Chairwoman Lina Khan and her colleagues before a personnel change in August.
On the Amazon side, there may be an attempt to block Khan due to his public statements about the company via a request to the FTC Ethics Board. That’s what Meta did and what the company got. Unfortunately, the recommendations of this council are not binding. It is up to the judges of the administrative court to decide and in the case of the trial with Meta, two judges found no problem with Ms. Khan’s involvement in federal court cases“.
Amazon would force its merchants to use its logistics services
When you order on Amazon, several cases are possible:
- You buy a product from Amazon and it sends it to you;
- You buy a product from a merchant and Amazon does the shipping;
- You buy a product from a merchant and he himself sends the package to you (potentially going through a subcontractor).
Today, more than half of the sales made on Amazon are made by third-party sellers: for each transaction, they pay a commission to themarketplace. To go further, they can also pay the latter for the storage, shipping and advertising of their products.
According to a Marketplace Pulse study, in 2022 “Amazon is pocketing more than 50% of seller revenue, up from 40% five years ago.“In fact, Amazon reportedly”increased fulfillment costs and made ad spend unavoidable“. The FTC would have gathered evidence showing that Amazon would disadvantage companies that do not use these advertising and logistics services. ByBloombergwe learn that the agency would investigate a merchant selection algorithm about the “buy-box», a button that allows you to add items to your basket in one click.
What consequences for Amazon?
Amazon could avoid ending up in US court by arguing their case before the three FTC commissioners, who include Lina Khan. For the moment, no meeting has been organized between Amazon and the FTC. At this very moment, the American authority is on trial against Microsoft to validate or not the acquisition by the firm of Activision Blizzard.
Lina Khan has never hidden it: she would not be ready to accept compromises from Amazon. Potentially, it could force a restructuring of the company, in particular with a split between the activities: the entity of e-commerce and that of logistics within Amazon could become entirely independent of each other. This will obviously only be the case if American justice considers it necessary. In terms of anti-competitive practices, the FTC is investigating in parallel the proposed takeover of iRobot by Amazon, also studied by its British counterpart.
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