Amazon Faces Broadscale FTC Antitrust Suit

A federal regulator is reportedly preparing a wide-ranging antitrust suit against Amazon.

The Federal Trade Commission (FTC) plans to file the suit — which deals with Amazon’s key online marketplace — in the coming weeks, Bloomberg News reported Thursday (June 29).

The report, which cites documents seen by Bloomberg and sources familiar with the case, says the suit will argue that Amazon uses its power to punish merchants that refuse to use its logistics services, while rewarding the ones who do.

Both Amazon and the FTC declined to comment when contacted by PYMNTS.

The Bloomberg report notes that — based on her past remarks — FTC Chair Lina Khan isn’t likely to agree to a compromise by Amazon and could instead push for a court to restructure the company, a move Amazon would appeal.

The lawsuit centers on third-party sellers, who make up 60% of Amazon’s eCommerce sales, according to the company’s U.S. Small Business Empowerment Report.

But rather than empowering these independent merchants, the FTC suit apparently argues Amazon penalizes them for not using certain services.

According to Bloomberg, the suit deals with the commissions they pay for each sale, as well as the fees they pay for services like advertising and shipping.

While the fees are optional, the Bloomberg report says the FTC has found evidence showing Amazon disadvantages merchants who do not employ these services. The commission is also looking into the algorithm that chooses merchants for Amazon’s coveted “Buy Box,” which lets shoppers add merchandise to their carts with a single click.

News of the suit — which could be filed before August — comes during a month in which Amazon has already faced serious regulatory action.

Last week, the FTC sued the company over practices that allegedly “tricked and trapped” consumers into Amazon Prime recurring subscriptions.

The agency’s 159-page complaint claims Amazon — which gets roughly $25 billion in subscription revenues per year — employed “dark patterns” to dupe consumers into enrolling into the program, while also subjecting them to a “labyrinthine” cancellation process.

Meanwhile, the company is also reportedly facing full-scale EU antitrust investigation over its $1.7 billion acquisition of Roomba vacuum cleaner maker iRobot.

As PYMNTS wrote earlier this month, the European Commission has scheduled a four-month probe into the deal, set to begin after it wraps its preliminary review of the purchase next week.