FTC’s Amazon antitrust lawsuit faces a high bar in USA court. Legal issues are present in the U.S. Federal Trade Commission’s (FTC) lawsuit accusing Amazon.com (AMZN.O) of abusing its control of the retail industry to stifle competition. According to legal experts, these barriers test the application of U.S. antitrust law and provide hurdles for the agency.
The 17 states and the U.S. agency that defends federal antitrust law filed a case against Amazon on Tuesday in federal court in Seattle, asking a U.S. judge to consider an injunction and other penalties to end alleged illegal conduct.
Several experts consulted by Reuters say that the FTC will find it difficult to prove that American customers would profit from Amazon’s standards being absent.
The complaint claims that Amazon unfairly favors its products and penalizes sellers who want to sell their products for cheaper on rival platforms.
For Amazon to maintain or achieve its dominating position in the market and be considered a large player with considerable impact, the FTC must prove that it participated in illegal activities to do so. The requirement for the government to identify and support the relevant markets is another significant threshold issue.
David Balto, a former FTC policy director and antitrust lawyer, compared the FTC’s challenging future to climbing Mount Rainier in tennis shoes.
He said, “It’s possible, but it’ll be pretty cold at 20,000 feet, and you might not make it to the summit.”
In the course of the litigation, Amazon will have the chance to present pro-competitive arguments for its alleged acts, said antitrust lawyer Diane Hazel of the law firm Foley & Lardner. Hazel added that for Amazon to reject the FTC’s claims, it must show that its arguments are “legitimate.”
University of Minnesota Law School antitrust expert Tom Cotter projected that Amazon’s justification would be, “We give consumers access to a wide variety of goods at affordable prices quickly.”
The disputed tactics have, in fact, “helped to spur competition and innovation across the retail industry,” according to a statement from David Zapolsky, chief counsel of Amazon. According to Zapolsky, the FTC argues that “everyday retail competition doesn’t exist.”
Amazon is believed to have used “punitive and coercive tactics” to unlawfully maintain a monopoly, as stated by FTC Chair Lina Khan.
Several individual consumer complaints filed against Amazon in recent years and still proceeding in the U.S.S. federal court are comparable to, but more broad than, the FTC’s action.
We get a sneak glimpse at some of the legal arguments Amazon may use to resist the FTC’s action from the private antitrust litigation.
In one of the cases, Amazon’s pricing policies were being contested, and the company’s legal team said that no court “has ever condemned a business practice that requires low prices in a retail store for consumers.”
Amazon is also defending itself against claims that it has stifled competition in the market for shipping and fulfillment services that were made in a separate private civil lawsuit.
Judge Ricardo Martinez of the U.S. District Court dismissed that argument in April because the plaintiffs’ consumers had not bought any logistical services. The court did permit the clients to submit a new complaint, though.
Martinez, George W. Bush appointed, may be involved in the FTC’s action because, in its opinion, several Amazon matters now before him are factually and legally relevant to the new complaint.
The University of Iowa’s law school’s antitrust specialist, Sean Sullivan, claims that American courts are frequently “wary of using antitrust law to punish low-priced behavior.”
Sullivan contends that it is not always easy to distinguish between “good low pricing,” which is decided by market competition, and “bad low pricing,” which helps a company acquire or maintain market dominance.
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