How will the FTC’s lawsuit against Amazon affect consumers?


The biggest hurdle may be getting all its sellers to walk the walk and talk the talk

The Federal Trad Commission's (FTC) antitrust lawsuit against Amazon may be the biggest legal hurdle the online retailer has ever seen. Both it – and Google – now both face the biggest antitrust cases in a generation, the type that the government used to dilute the power of Microsoft in 1998 and AT&T in 1974.

It’s impossible to tell how much the FTC will try to tar and feather Amazon, but Amazon has already gone on the offensive, telling consumers that they have nothing to worry about, at least short-term.

“We’re proud of the ways we’ve helped to spur low prices, innovation, and competition across retail, and we intend to keep doing that for years to come,” the company wrote in a consumer-facing response to the lawsuit.

“We fundamentally disagree with the FTC’s allegations—which are in many cases wrong or misleading—and with their overreaching and misguided approach to antitrust, which would harm consumers, hurt independent businesses, and upend long-standing and well-considered doctrines. We will contest this lawsuit, and we will also continue inventing to put our customers—both consumers and the businesses that sell in our store—first.”

Amazon can take care of its side of the street, but its sellers have to do their part, too

Combating any possible misperceptions, Amazon said that when setting prices for the products it sells that are Amazon-produced and branded, “we try to match other retailers’ low prices—online and offline.” But it reminds customers that all other sellers set prices independently.

“But, to help them increase sales and make our store more attractive to customers, we also invest in tools and education to help them offer competitive prices. Other retailers also use similar tools and practices to highlight competitive offers and provide customers value in their stores.”

The same is true with delivery. 

“We also recently launched the ability for sellers to offer Prime shipping on their own direct-to-consumer sites via Buy with Prime, and many sellers have already signed up. Early results show sellers who add Prime on their own site as an additional option for customers [to] increase their sales—a clear demonstration of the value to consumers and sellers, even outside of the Amazon store.”

In the meantime, though, it’s doubtful that consumers will feel any pain in the delivery department – short of bad weather and the holiday rush.

Amazon’s first big test in the delivery department will be the upcoming Prime Big Deal Day, but it appears confident that that should be smooth sailing, too, claiming that it continues to invest in making Prime delivery “better and better” for its customers. 

“For example, we hit our fastest Prime speeds ever last quarter. Across the top 60 largest U.S. metro areas, more than half of Prime member orders arrived the same or next day.”

Amazon's defenders speak up

Yaël Ossowski, deputy director of the Consumer Choice Center, a business lobby group, reacted to the lawsuit in an email to ConsumerAffairs:

"Consumers know they're getting a myriad of benefits with their Prime subscription, whether that's faster delivery, cheaper prices, or bundled services like data storage and content streaming, Ossowski said. "That's what consumers want, and why millions buy from Amazon every day."

Ossowski said that if the FTC gets its wish and Prime goes away, the agency is revealing more about its "political grudge" than any harm that Amazon is doing to the consumer.

"That the FTC would waste their resources going after an innovative company that consistently offers value for consumers reveals more about the agency's political grudge than any perceived harm to consumers," he said.

The Center for Economic Opportunity (CEO) at Independent Women's Forum is another group that says it advocates for "common sense policy solutions Director Patrice Onwuka wants to know if FTC Commissioner Lina Khan has thought about what her agency's move would do to all the mom-and-pop, third-party sellers that make their living selling on Amazon.

“Khan couldn’t be too serious about market competition either if she’s willing to pull the rug from under the two million small businesses that sell on Amazon, competing directly with the retailer’s products, or rely on its soup-to-nuts fulfillment services to get their goods in the hands of consumers," she wrote in another email to ConsumerAffairs.

“Khan is not just suing one consumer-friendly company, but using this lawsuit to overturn an approach to antitrust law that has delivered immeasurable benefits and savings to everyday consumers and small businesses.” 

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