FTC v. Amazon

Last updated
Federal Trade Commission et al v. Amazon.com, Inc
Washington-western.png
Court United States District Court for the Western District of Washington
Full case name Federal Trade Commission, State of New York, State of Connecticut, Commonwealth of Pennsylvania, State of Delaware, State of Maine, State of Maryland, Commonwealth of Massachusetts, State of Michigan, State of Minnesota, State of Nevada, State of New Hampshire, State of New Jersey, State of New Mexico, State of Oklahoma, State of Oregon, State of Rhode Island and State of Wisconsin v. Amazon.com, Inc.
Docket nos.2:23-cv-01495

Federal Trade Commission, et al. v. Amazon.com, Inc. is a lawsuit brought against the multinational technology company and online retailer Amazon in 2023. The Federal Trade Commission (FTC), joined by the attorneys general of seventeen U.S. states, alleges that Amazon holds and abuses an online retail monopoly. [1] [2]

Contents

Background

Amazon is a multinational technology company founded by Jeff Bezos in 1994 as a bookseller that has since become the world's largest online retailer. [3] The company has expanded to other ventures such as Amazon Prime Video and Amazon Web Services. [1] As of 2022, it had a turnover of over $500 billion, making it one of the largest companies in the world. [4] The case drew comparisons to a notable Yale Law journal article written by incumbent FTC Chair, Lina Khan, that used Amazon as an example of how United States antitrust law should be rewritten. Will Oremus of the Washington Post noted that the actual case was much more tempered than the arguments put forth by Khan in her article. [5]

Claims

The case, filed in the U.S. state of Washington, alleges that Amazon took part in a number of anti-competitive practices. [6]

The FTC and states allege Amazon's anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. [7]

The alleged anticompetitive practices include: [7]

and seeking to extract monopoly rents by: [7]

The plaintiffs are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in these practices. [7]

Related Research Articles

The Robinson–Patman Act (RPA) of 1936 is a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination.

<span class="mw-page-title-main">United States antitrust law</span> American legal system intended to promote competition among businesses

In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses in order to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. These acts serve three major functions. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization.

Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

<span class="mw-page-title-main">Federal Trade Commission</span> United States government agency

The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction over federal civil antitrust law enforcement with the Department of Justice Antitrust Division. The agency is headquartered in the Federal Trade Commission Building in Washington, DC.

Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws ensure businesses do not engage in competitive practices that harm other, usually smaller, businesses or consumers. These laws are formed to promote healthy competition within a free market by limiting the abuse of monopoly power. Competition allows companies to compete in order for products and services to improve; promote innovation; and provide more choices for consumers. In order to obtain greater profits, some large enterprises take advantage of market power to hinder survival of new entrants. Anti-competitive behavior can undermine the efficiency and fairness of the market, leaving consumers with little choice to obtain a reasonable quality of service.

<span class="mw-page-title-main">1-800 Contacts</span> American contact lens retailer

1-800 Contacts Inc. is an American contact lens retailer based in Draper, Utah. The brands that 1-800 Contacts use includes Johnson & Johnson Vision Care, Alcon, Bausch & Lomb and CooperVision. The company was founded as the industry's first way to buy contacts online and has since expanded to provide online prescription renewals, glasses, lens replacements, and the in-house AquaSoft Daily contact lenses brand. In 2006, its last year as a public company, the company reported net sales of US$247 million.

<span class="mw-page-title-main">Jon Leibowitz</span> American lawyer

Jonathan David Leibowitz is an American attorney who served under President Barack Obama as Chair of the Federal Trade Commission (FTC) from 2009 to 2013. Leibowitz was appointed to the commission in 2004, and resigned in 2013. During Leibowitz's tenure, the FTC brought privacy cases against Google, Facebook and others for violating consumer privacy, as well as enforcement against "pay-for-delay" deals in which pharmaceutical companies paid competitors to stay out of the market. Prior to joining the FTC, Leibowitz was Vice President for Congressional Affairs from 2000 to 2004 of the MPAA.

<i>Advanced Micro Devices, Inc. v. Intel Corp.</i> Private antitrust lawsuit

AMD v. Intel was a private antitrust lawsuit, filed in the United States by Advanced Micro Devices ("AMD") against Intel Corporation in June 2005.

Vaccine bundling is a contractual agreement offered by some pharmaceutical companies to pediatricians, that gives a discount to doctors purchasing pediatric vaccines, but only if the physicians agree to buy the majority of their vaccines from a single manufacturer. It is a form of product bundling.

FTC v. Actavis, Inc., 570 U.S. 136 (2013), was a United States Supreme Court decision in which the Court held that the FTC could make an antitrust challenge under the rule of reason against a so-called pay-for-delay agreement, also referred to as a reverse payment patent settlement. Such an agreement is one in which a drug patentee pays another company, ordinarily a generic drug manufacturer, to stay out of the market, thus avoiding generic competition and a challenge to patent validity. The FTC sought to establish a rule that such agreements were presumptively illegal, but the Court ruled only that the FTC could bring a case under more general antitrust principles permitting a defendant to assert justifications for its actions under the rule of reason.

FTC v. Motion Picture Advertising Service Co., 344 U.S. 392 (1953), was a 1953 decision of the United States Supreme Court in which the Court held that, where exclusive output contracts used by one company "and the three other major companies have foreclosed to competitors 75 percent of all available outlets for this business throughout the United States" the practice is "a device which has sewed up a market so tightly for the benefit of a few [that it] falls within the prohibitions of the Sherman Act, and is therefore an 'unfair method of competition' " under § 5 of the FTC Act. In so ruling, the Court extended the analysis under § 3 of the Clayton Act of requirements contracts that it made in the Standard Stations case to output contracts brought under the Sherman or FTC Acts.

Match Group, Inc. is an American internet and technology company headquartered in Dallas, Texas. It owns and operates the largest global portfolio of popular online dating services including Tinder, Match.com, Meetic, OkCupid, Hinge, Plenty of Fish, OurTime, and other dating global brands. The company was owned by IAC until July 2020 when Match Group was spun off as a separate, public company. As of 2019, the company had 9.3 million subscribers, of which 4.6 million were in North America. Japan is the company's second largest market, after the United States.

Software monetization is a strategy employed by software companies and device vendors to maximize the profitability of their software. The software licensing component of this strategy enables software companies and device vendors to simultaneously protect their applications and embedded software from unauthorized copying, distribution, and use, and capture new revenue streams through creative pricing and packaging models. Whether a software application is hosted in the cloud, embedded in hardware, or installed on premises, software monetization solutions can help businesses extract the most value from their software. Another way to achieve software monetization is through paid advertising and the various compensation methods available to software publishers. Pay-per-install (PPI), for example, generates revenue by bundling third-party applications, also known as adware, with either freeware or shareware applications.

<span class="mw-page-title-main">Lina Khan</span> American legal scholar and jurist (born 1989)

Lina M. Khan is a British-born American legal scholar who has served as chair of the Federal Trade Commission (FTC) since 2021. She is also an associate professor of law at Columbia Law School.

Federal Trade Commission v. Qualcomm Incorporated was a noted American antitrust case, in which the Federal Trade Commission (FTC) accused Qualcomm's licensing agreements as anticompetitive, mainly because their practices excluded competition and harmed competitors in the modern chip market, which according to the FTC, violated both Section 1 and Section 2 of the Sherman Act. On May 21, 2019, the United States District Court for the Northern District of California ruled in favor of the plaintiff, the FTC, by alleging that Qualcomm had indeed violated the federal antitrust laws by (1) refusing to license its patents to direct competitors, in its relevant product market (2) by placing an extra fee on rival chip sales through its licensing of its patent, and (3) by entering in an exclusive business deal with Apple from 2011 to 2013. The case was seen as controversial when the United States Court of Appeals for the Ninth Circuit decided to unanimously reverse the decision of the district court by arguing that the FTC failed to prove through its rule of reason analysis that Qualcomm's policies have a considerable negative effect towards the consumer in the CDMA and cellular chips market.

<i>Federal Trade Commission v. Meta Platforms, Inc.</i> United States ongoing antitrust court case

Federal Trade Commission v. Meta Platforms, Inc. is an ongoing antitrust court case brought by the Federal Trade Commission (FTC) against Facebook parent company Meta Platforms. The lawsuit alleges that Meta has accumulated monopoly power via anti-competitive mergers, with the suit centering on the acquisitions of Instagram and WhatsApp.

<span class="mw-page-title-main">New Brandeis movement</span> American academic and political movement

The New Brandeis or neo-Brandeis movement is an antitrust academic and political movement in the United States which argues that excessively centralized private power is dangerous for economical, political and social reasons. Initially called hipster antitrust by its detractors, also referred to as the "Columbia school" or "Neo-Progressive antitrust," the movement advocates that United States antitrust law return to a broader concern with private power and its negative effects on market competition, income inequality, consumer rights, unemployment, and wage growth.

<span class="mw-page-title-main">Christine S. Wilson</span> American attorney (born 1970)

Christine Smith Wilson is an American attorney and former government official. A member of the Republican Party, Wilson was appointed by President Donald Trump in 2018 to serve on the Federal Trade Commission (FTC). Wilson resigned from the FTC in 2023.

<i>United States v. Google LLC</i> (2020) Antitrust case alleging Google illegally dominates internet search

United States v. Google LLC is an ongoing federal antitrust case brought by the United States Department of Justice (DOJ) against Google LLC on October 20, 2020. The suit alleges that Google has violated the Sherman Antitrust Act of 1890 by illegally monopolizing the search engine and search advertising markets, most notably on Android devices, as well as with Apple and mobile carriers.

<i>United States v. Google LLC</i> (2023) Antitrust case alleging Google illegally dominates digital advertising

United States v. Google LLC is an ongoing federal antitrust case brought by the United States Department of Justice (DOJ) against Google LLC on January 24, 2023. The suit accuses Google of illegally monopolizing the advertising technology (adtech) market in violation of sections 1 and 2 of the Sherman Antitrust Act of 1890. The suit is separate from the first antitrust case launched in 2020 that accuses Google of an illegal monopoly in the search engine market.

References

  1. 1 2 McCabe, David (September 26, 2023). "U.S. Accuses Amazon of Illegally Protecting Monopoly in Online Retail". The New York Times . Archived from the original on September 26, 2023. Retrieved September 26, 2023.
  2. Fung, Brian (September 26, 2023). "US government and 17 states sue Amazon in landmark monopoly case". CNN. Archived from the original on 2023-09-26. Retrieved 2023-09-26.
  3. Debter, Lauren (May 12, 2022). "The World's Largest Retailers 2022: Pandemic Helps Amazon Cement Its Lead". Forbes. Archived from the original on 2023-09-26. Retrieved 2023-09-26.
  4. "Topic: Amazon". Statista. Archived from the original on 2023-09-27. Retrieved 2023-09-27.
  5. Oremus, Will (2023-09-27). "Analysis | Lina Khan's Amazon lawsuit is nothing like her famous law article". Washington Post. ISSN   0190-8286 . Retrieved 2023-12-05.
  6. "Amazon sued by FTC and 17 states over allegations it inflates online prices and overcharges sellers". AP News. 2023-09-26. Archived from the original on 2023-09-26. Retrieved 2023-09-26.
  7. 1 2 3 4 "FTC Sues Amazon for Illegally Maintaining Monopoly Power". Federal Trade Commission. 2023-09-26. Archived from the original on 2023-09-26. Retrieved 2023-09-27.