FTC Countdown to Sue Amazon! Amazon to Have Final "Ceremonial" Meeting with FTC Officials

On Monday, August 7, some media quoted people familiar with the matter as saying that Amazon will meet separately with each member of the Federal Trade Commission (FTC) next week and discuss with them the antitrust lawsuit that the FTC may initiate against Amazon. **This move is seen as the last ceremonial meeting between the parties before going to court or reaching a settlement. **If the FTC does prosecute Amazon, it would mark a landmark moment in the tenure of the commission's chairwoman, Lina Khan. Khan once accused Amazon of accumulating too much market resources and power in a widely circulated academic paper. In the face of Amazon, the US antitrust law has failed. At the end of June, several people familiar with the matter were quoted as saying that the FTC would file a far-reaching antitrust lawsuit in the next few weeks, focusing on the online marketplace business in Amazon's core e-commerce business, commonly known as third-party e-commerce business. The FTC will accuse Amazon of using its market dominance to favor online merchants who use its logistics services and punish those who don't, according to people familiar with the matter. Over the past few months, FTC investigators have been preparing for the lawsuit and hammering out key details, including where to file it, according to two of the people familiar with the matter. As for the prosecution date, Khan and colleagues plan to file the lawsuit before the agency's personnel changes in August, and the final date may also be delayed. Based on Khan's previous public statements, she is unlikely to accept Amazon's compromise and instead wants to seek to restructure Amazon. This is clearly unacceptable for Amazon, which is expected to seek an appeal. However, it is not clear which aspects of Amazon's e-commerce business the FTC will target in a potential lawsuit. Amazon's large-scale online marketplace is the core of its e-commerce business. Third-party merchants currently account for more than half of Amazon's online sales. Third-party merchants not only pay Amazon commissions for each transaction, but also pay Amazon for various services from warehousing and transportation to advertising. Of course, these fees are optional. But most merchants believe that these are necessary costs to do business on Amazon's platform. In recent years, Amazon's percentage of each transaction in its online marketplace has been increasing, with the percentage in 2022 exceeding 50%, up from 35% in 2016. The FTC said it had gathered evidence that Amazon used its "Buy Box" offer ranking to favor online merchants who use its logistics services and punish those who do not. Buy Box allows consumers to add items from specific retailers directly to their shopping cart, and getting Buy Box means more sales. Before that, the European Union also conducted an antitrust investigation on Amazon Buy Box, but the two sides reached a settlement in December last year. The FTC has been investigating the case for several years. As early as June 2019, Amazon was notified of a preliminary investigation. Two months later, the FTC first asked Amazon to provide relevant materials, including several questions about how the use of Amazon warehousing and delivery services "affects product placement" by third-party sellers, including the use of Buy Box.