FTC Poised to Sue Amazon for Antitrust Violations Next Week

The Federal Trade Commission is expected to sue Amazon.com Inc. for antitrust violations next week, according to people familiar with the matter – marking the agency’s fourth swipe at the online retail giant this year.

The lawsuit, expected to be filed in federal court by the agency, marks a groundbreaking moment for FTC Chair Lina Khan, who shot to fame as a law student for a legal article about how to rethink antitrust law to apply to Amazon in the digital age.

The antitrust complaint is expected to focus on how Amazon’s pricing policies, already the subject of a suit by California’s attorney general, Prime and allegations the company illegally ties merchant access to its marketplace to use of its logistics service, the people said, speaking anonymously to discuss a pending complaint. Prime membership has been a key differentiator for Amazon, helping it convert occasional shoppers into loyal devotees who make the company their default choice when shopping online.

Politico first reported the news on Friday.

The antitrust and consumer protection agency has had Amazon in its sights for more than four years. The FTC during the Trump administration opened a probe into potential anticompetitive conduct related to several aspects of Amazon’s business, including its marketplace where both the company and third-party merchants sell goods and the Prime subscription service. Under Khan, the agency refined the probe and opened new investigations into the tech company. In August, company executives met with Khan and the FTC’s two other commissioners to discuss the potential suit, though no settlement was offered.

The agency sued Amazon in May in two separate cases for failing to delete data about children collected by its Alexa speakers and illegally spying on users of its Ring doorbells and cameras. Amazon said it disagreed with the FTC’s allegations, but agreed to pay $30.8 million to resolve the suits.

A month later, the agency filed another suit against the company, alleging that it duped consumers into signing up for the Prime subscription service and then deliberately made it difficult to cancel. Just this week, the FTC amended its complaint to add three Amazon executives as defendants in the case, arguing the trio ignored pleas by employees to stop using techniques “to mislead or trick users” into “signing up for a recurring bill.” The company is contesting the allegations in that case.

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Angela Moon

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