An Amazon Prime truck driver attempts a turn in Los Angeles, California on Amazon Prime Day, July 12, 2022. What started as a one-day-only event for shopping deals in 2015 has since morphed into a 48-hour event for Amazon Prime members.
Amazon faces a major legal issue as it marks Prime Day, one of its largest sales occasions. The US Federal Trade Commission (FTC) is pursuing a vigorous antitrust prosecution against the e-commerce behemoth, arguing that Amazon has hindered vendors from providing their goods at reduced rates on other platforms.
The legal action is the FTC's largest-scale attempt to counteract Amazon's market dominance and alleged anticompetitive behavior, according to AP News. mazon has come to represent e-commerce due to the ease of its online shopping and quick shipping.
FTC Taking Aggressive Action
The FTC, under the direction of Chair Lina Khan, has taken aggressive action against significant US corporations in response to what many consider years of insufficient antitrust enforcement. Despite failures to prohibit Microsoft's acquisition of Activision Blizzard and Meta's acquisition of virtual reality firm Within Unlimited, the FTC continues to pursue antitrust cases.
The fact that Lina Khan is involved in the Amazon lawsuit completes the circle. She wrote a notable scholarly article titled "Amazon's Antitrust Paradox" while a Yale Law student in 2017. Khan criticized the conventional method of evaluating anticompetitive activity only by its effects on pricing in the article. She argued in favor of a more progressive strategy that takes corporate concentration's effects on the wider market into account.
President Joe Biden appointed Khan to lead the FTC two years ago, suggesting a harsher approach to antitrust enforcement. Amazon tried in vain to have Khan recuse herself from the inquiries against the firm, claiming she was prejudiced.
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The FTC's present objective is to demonstrate in court that Amazon is a monopoly that is stifling competition by abusing its position of market dominance. If this effort is successful, according to Khan, there will be more choices, higher quality, and cheaper pricing due to increasing competition.
The legal fight may last years, including administrations, court cases, and accords. A federal judge rejected the District of Columbia's antitrust case against Amazon last year, but California's will be tried in 2026.
Breaking Down Amazon's Market Dominance Will Benefit Everyone
Amazon's Prime Day sale offers alluring discounts and tries to lock customers into its premium Prime loyalty program, giving it a competitive edge, per The Boston Globe.
Although the FTC's antitrust action has important ramifications, shoppers may put more emphasis on discounts and sales than the fight against Amazon. Amazon's 40% market share in US online shopping and adult use of Amazon Prime makes it a powerful e-commerce player.
Stacy Mitchell, Co-Director of the Institute for Local Self-Reliance, favors both FTC legal action and Amazon division to boost competition and drive the online company to improve. She believes Amazon's dominant position might limit online buying and must be addressed to protect online marketplaces.
"The idea of a breakup isn't to break Amazon as a convenient way to shop, but rather to save Amazon from itself. Otherwise, we're just going to see a diminishing of our experience online... When you have this kind of monopoly power, you don't have to work for it," Mitchell said, as quoted by NPR. "
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