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Report: FTC prepares antitrust action against Amazon

Amazon may be facing an FTC lawsuit.

The Federal Trade Commission (FTC) will reportedly file an antitrust lawsuit against Amazon as soon as next month.

According to Politico, the lawsuit will address a range of alleged issues regarding Amazon’s business practices, including how it operates the Amazon Prime paid membership service as well as pricing, advertising and logistics mandates the e-tailer places on third-party sellers using its platform.

The FTC has reportedly been preparing the suit, which it will likely file in federal court, since late 2022. The agency has also reportedly been interviewing potential witnesses such as Amazon CEO Andy Jassy and founder Jeff Bezos, and has obtained millions of documents. Amazon declined an invitation from Chain Store Age to comment.

Under the direction of FTC chair Lina Khan, the agency has been placing Amazon and other major tech companies such as Microsoft, which recently successfully challenged an FTC attempt to block its acquisition of video game company Activison Blizzard, under increased scrutiny.

If filed, this suit would follow a June 2023 complaint the FTC brought against Amazon. That complaint charges that Amazon has engaged in a “years-long effort” to enroll consumers into its Prime program without their consent, while knowingly making it difficult for them to cancel Prime subscriptions.

Specifically, the FTC alleged Amazon used deceptive user interface designs known as “dark patterns” to trick consumers into enrolling in automatically-renewing Prime subscriptions. The FTC said Amazon also knowingly complicated the cancellation process for Prime subscribers who sought to end their membership.

As far back as 2019, the FTC placed Amazon under increased scrutiny for alleged antitrust issues. U.S. Senator Elizabeth Warren (D-MA) publicly called for the federal government to break up the “monopolies” of Amazon, Google, and Facebook in March 2019. In addition to accusing these three companies of stifling competition by using their market power to pressure smaller companies into mergers, Warren called out their proprietary third-party marketplaces as unfairly limiting completion.

The FTC is also engaged in ongoing reviews of Amazon’s $3.9 billion acquisition of membership-based primary health care provider One Medical and its planned $1.4 billion purchase of robotic Roomba vaccum maker iRobot.

See more coverage from Politico here.

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