The U.S. Federal Trade Commission (FTC) is filing an antitrust lawsuit against Amazon, the world's largest e-commerce company.
On the 5th (local time), The Wall Street Journal (WSJ) reported, citing sources, that the FTC plans to file an antitrust lawsuit against Amazon by the end of this month. Having recently concluded its antitrust investigation into Amazon, the FTC proposed on the 15th of last month that Amazon's legal team prepare corrective measures regarding unfair business practices and behaviors that reduce market competition. However, Amazon did not present any concrete plans. WSJ pointed out, "Since Amazon's management did not offer any self-remedies to resolve the antitrust allegations in the final stage before the lawsuit, a legal battle is inevitable."
This lawsuit targets Amazon's unfair business practices maintained through its market monopoly position, such as charging fees for its logistics service 'Fulfillment' (SFP, a one-stop service from product storage to delivery) and pricing policies for third-party sellers.
The FTC alleges that Amazon has engaged in anti-competitive behavior by using unfair contract terms to artificially maintain high prices in the online retail market, preventing third-party sellers on its platform from offering lower prices on competing platforms. Additionally, the practice of charging fees to sellers who deliver products themselves is considered an abuse of market dominance.
Seeing the potential for Amazon's business practices to hinder competition, the FTC has conducted a comprehensive investigation into Amazon over several years. Bloomberg reported, "The FTC recently concluded a four-year antitrust investigation into Amazon that began during the Trump administration and is now intensifying the lawsuit against Amazon by the end of this month."
Sources said that if the lawsuit proceeds in earnest, the FTC may demand remedies at the level of corporate breakup from Amazon. WSJ reported, "There is also speculation that the FTC could propose a 'structural remedy' through this lawsuit that could lead to the breakup of Amazon as a company."
Big tech regulations that began during the Trump administration have become even stronger under the Joe Biden administration. The FTC, a major pillar of Biden's antitrust regulation, has focused more on ex-post regulations such as corporate breakups and fines rather than ex-ante regulations, strengthening checks on big tech companies that dominate all digital platforms including search, e-commerce, and social media. Strong measures such as corporate breakup lawsuits like those against AT&T and legislation to reduce business scope are also being pursued.
As part of this, the FTC sued Google, which dominates the global digital advertising market, for antitrust violations and filed a lawsuit against Meta's acquisition of the virtual reality (VR) startup Within, claiming it reduces market competition, but these were dismissed by the courts. Injunction requests against Microsoft's $68.7 billion (about 91.51 trillion KRW) acquisition of Activision Blizzard were also dismissed. Over more than two years, lawsuits against big tech have mostly ended in defeat. Despite consecutive losses, the FTC is wielding regulatory power over big tech businesses, naming OpenAI, which sparked the generative artificial intelligence (AI) boom, as its next target.
Amazon's stock, listed on the U.S. Nasdaq market, closed at $137.27, down 0.62% in regular trading on the day. After-hours trading saw selling pressure, with shares down 0.42% as of 8:40 a.m. Korean time.
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