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FTC Reportedly to Sue Amazon

The media reported that the US Federal Trade Commission (FTC) is likely to sue Amazon in the near future.

FTC Reportedly to Sue Amazon

According to the information received by the media from insiders who are aware of this issue, the regulator will go to court before the end of September. This will happen after the FTC has completed an antitrust investigation into the e-commerce giant, which began four years ago.

According to anonymous insiders referred to by the media, the basis of the lawsuit against the retailer will be complaints from third-party sellers who are dissatisfied with the fact that the company ties access to its trading platform with its logistics service. According to the mentioned merchants, such a business approach of the e-commerce giant, which is manifested in the framework of interaction with them, is not fair.

Currently, on the Amazon virtual marketplace, the share of third-party sellers in the total structure of online sales is more than 50%.

This lawsuit will be the fourth since the beginning of 2023, the regulator’s appeal to the court as part of the proceedings against the e-commerce giant. In part, these actions, which have signs of tactics that include a systematic sequence algorithm, are a reflection of the increased attention of the administration of the President of the United States Joe Biden to antitrust law and competition as a cornerstone of economic policy.

FTC Chairman Lina Khan, who was chosen by Mr. Biden to lead the agency, has been thinking about the activities of the e-commerce giant in its various aspects for a long time and considers the retailer’s business in a global context. While still a law student, she wrote an article on how to rethink the concept of a state approach to legislative initiatives in the field of antimonopoly regulation due to the Amazon virtual platform.

The media reports that the company’s top managers held a meeting with representatives of the FTC in August. Insiders claim that during this communication, the pending lawsuit was discussed, but at the same time, attention was not paid to the prospects and options for resolving the situation in the framework of the proceedings, which will soon move into the plane of judicial review.

The FTC, which currently has authority in the area of antimonopoly regulation and is an authority with the right to take measures to protect consumer rights, is investigating the e-commerce giant for its potential involvement in illegal behavior practices that have led to restrictions on the competitive capabilities of other firms in several aspects of business. This trial applies to the Amazon trading platform, the Prime subscription service, and cloud computing.

In May, the regulator sued the e-commerce giant in two other cases. As part of one of the proceedings, the degree of legality of the company’s actions was assessed in the context of the lack of measures to delete children’s data that were collected by Alexa speakers. In the second case, claims were made to the firm about the practice of spying on users of Ring doorbells and cameras. The tech giant announced its disagreement with the regulator’s accusations, but at the same time agreed to pay $30.8 million to settle these proceedings.

In June, the FTC sued Amazon again in a consumer protection case. The regulator said that the e-commerce giant, through a method of deception, forced users to subscribe to Prime and deliberately complicated its cancellation. The company denies the charges. This trial continues.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.