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FTC readies lawsuit that could break up Amazon
- archo 3y agohttps://archive.is/5jCa8 https://archive.is/5jCa8
- jamesliudotcc 3y agoWhat happens when they lose this one too? Just because the commissioner has a law review Note setting forth a legal theory does not mean the law has changed.
- prasadjoglekar 3y agoThe next one - for Google perhaps - gets even harder. They already lost one with Activision and Microsoft.
- justrealist 3y agoLina Khan fails upward into a cabinet position in the next administration for demonstrated loyalty to questionably legal crusades.
- themitigating 3y agoShe hasn't been in the position that long but the FTC settled with Epic games for $500 million in combined fines and refunds https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations https://www.ftc.gov/news-events/news/press-releases/2022/12/... However the FTC abilities may be limited because of two situations. First a surpreme court case that could limit federal agencies in general, likely because of the conservative majority. https://www.reuters.com/legal/federal-agency-powers-crosshairs-us-supreme-court-2023-07-04/ https://www.reuters.com/legal/federal-agency-powers-crosshai... Two, Trump has said if he is elected he will increase the power of the executive branch. Trump and Allies Forge Plans to Increase Presidential Power in 2025 https://www.nytimes.com/2023/07/17/us/politics/trump-plans-2025.html?smid=nytcore-android-share https://www.nytimes.com/2023/07/17/us/politics/trump-plans-2... "Mr. Trump intends to bring independent agencies — like the Federal Communications Commission, which makes and enforces rules for television and internet companies, and the Federal Trade Commission, which enforces various antitrust and other consumer protection rules against businesses — under direct presidential control." But your concern is that the head of the FTC, after making serious effort within the law to rein in Big Tech, fails Biden will give her a cabinet position. "Both sides..."
- fallingknife 3y agoIt was a mistake putting these agencies under the executive in the first place. Gives the president too much power by far. No reason they can't be run directly by congress.
- JumpCrisscross 3y ago> No reason they can't be run directly by congress What does this mean? You want the FTC to be more toothless? Because that's what removing it from the executive and placing it under the legislature does: it turns it into a fact-finding outfit with zero enforcement powers.
- fallingknife 3y agoIf an executive agency can have legislative powers, then a legislative agency can also have executive powers.
- JumpCrisscross 3y ago> If an executive agency can have legislative powers, then a legislative agency can also have executive powers Sure. This isn't a hot take. The legislature can order the executive to take specific actions. It does so all the time. The reason every society in history separates or delineates its executive functions is because many tasks of government require faster action than a deliberative body can continuously commit to. Congress (big and slow) granting agencies (small and faster) limited rule-making powers increases the agencies' power. The executive granting the Congress limited executive powers (e.g. prosecuting contempt of Congress) doesn't confer an equal power transfer. The executive branch of any system is built to amplify and focus power; the legislature, to distribute it. That executive power, if vested in the Congress, would dissolve across the body. An FTC under the Congress would have the same authority as any Congressional subcommittee: infinite in theory, but relatively toothless in practice.
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- themitigating 3y agoI'm not sure what you mean? If they lose then they lose. They don't have control of the law and having a legal review seems like the best they can do
- JumpCrisscross 3y ago> What happens when they lose this one too? Boards the country over become more emboldened. I have trouble seeing Khan's continuation at the FTC as anything but an olive branch to Big Tech. Activision is a recent failure. The glaring one was Facebook, where the FTC did "not even provide an estimated actual figure or range for Facebook's market share at any point over the past ten years" [1]. That's the judge! In his opinion! [1] https://casetext.com/case/fed-trade-commn-v-facebook-inc#p4 https://casetext.com/case/fed-trade-commn-v-facebook-inc#p4
- deleted 3y ago[deleted]
- kibwen 3y agoGood, although I've yet to see any indication that this FTC is competent enough to pull it off, after that pathetic Microsoft/Activision suit.
- lucubratory 3y agoI feel the same way. The case certainly seems stronger on the merits with Amazon than MS-ABK did, but I'm worried about the FTC's confidence after that PI hearing.
- OO000oo 3y ago[flagged]
- kmeisthax 3y agoThe FTC is competent, the problem is that they have decades of antitrust enforcement debt and a judicial system hell-bent on nullifying the underlying law. See https://pluralistic.net/2023/07/14/making-good-trouble/ https://pluralistic.net/2023/07/14/making-good-trouble/
- fallingknife 3y agoAuthor doesn't seem to understand the basics of acquisitions: > Start with the fact that Corley's son is a Microsoft employee who stands reap massive gains in his stock options if the merger goes through It's Activision whose stock stands to gain from this, not MSFT.
- JumpCrisscross 3y ago> FTC is competent As a training ground for aspiring Congresspersons, yes. As an executive agency, no. Khan started her term learning to manage. She is now losing case after case on account of sloppiness [1] and overreach. Her ideas are good. But she seems to want to write new laws, not enforce them. The right person in the wrong seat spells incompetence. [1] https://news.ycombinator.com/item?id=36872719 https://news.ycombinator.com/item?id=36872719
- jarjoura 3y ago
- zapatos 3y agoOf all the "big tech" companies, Amazon's monopoly position is the one that worries me the most. Google, Apple, Netflix, Facebook - you can imagine how a clever competitor can get a foothold to compete in those markets. But Amazon's ownership over the entire physical logistics supply chain through to last-mile delivery is just such a huge moat that keeps getting larger and larger.
- dzink 3y agoExcept that it’s financially supported by AWS. If AWS is separated, they would not be able to keep owning the logistics chain for long.
- flangola7 3y ago[flagged]
- shadowgovt 3y agoIf Amazon can't make delivering tangible goods to people in exchange for money profitable without slopping money over from the near infinite slush fund that is cloud computing, then it is using market position to stifle competition and deserves to be broken up so Walmart, Target, Best Buy, etc. have a fighting chance of staying in business to keep prices down via competition.
- Aloha 3y agoThe going theory here is that they dont have to make money shipping people shit and still own most of the marketplace because of the giant sloshy bucket of money from AWS.
- Aloha 3y agowhich is why I would force them to cleve AWS off, and frankly cleve off some of their logistics chain too.
- lotsofpulp 3y agoSource? They kept their profit margins near zero during their retail only days, but Walmart/Target/Kroger/etc have only ever earned 2% to 5% profit margins anyway.
- OO000oo 3y ago[flagged]
- AraceliHarker 3y agoIn the Activision case, the FTC ignored the fact that cloud gaming is a very small market and that the high-end console market is dominated by PlayStation, and filed an injunction to prevent the acquisition on the grounds that "large-scale acquisitions by large companies are not good." As a result, it was natural that they lost the lawsuit. In the case of the FTC's proposal to split Amazon, the FTC has been collecting evidence to support its claims for the past three years, even before Lina Khan took office as the chair. In addition, Amazon has actually pressured third-party retailers by using its dominant position in online shopping. Therefore, I think the claim is more likely to be upheld than in the Activision case.
- Aloha 3y agoThe only thing I look at with amazon is how you'd break it up? I think its obvious that Amazon is a company with an market position allowing it to exercise unreasonable control over its markets.
- JumpCrisscross 3y ago> how you'd break it up? For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.)
- MAGZine 3y agoand grocery/fresh food delivery. and then maybe put the streaming services and media production into it's own entity. you could even split kindle+audible out, too.
- JumpCrisscross 3y agoWhat part of the streaming market is remotely uncompetitive?
- Aloha 3y agoThats where I'd go first - but I think it's also worthwhile to break the shopping side of the business up to, into amazon eCommerce platform, amazon the seller of goods, Amazon logistics, and amazon fulfillment services as well - that would still leave a bag of leftover parts and businesses.
- kmeisthax 3y agoDo it, Lina. Do it, do it, do it.
- bobnamob 3y agoNo mention of aws is surprising
- remarkEon 3y agoIt's mentioned[1] extensively in the essay the now FTC chair wrote for the Yale Law Journal back in 2017 [1] https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...
- albert_e 3y agoInteresting part -- > Evidence suggests that Amazon is keenly aware of and interested in exploiting these opportunities. For example, the company has reportedly used insights gleaned from its cloud computing service to inform its investment decisions.374 By observing which start-ups are expanding their usage of Amazon Web Services, Amazon can make early assessments of the potential success of upcoming firms. Amazon has used this “unique window into the technology startup world” to invest in several start-ups that were also customers of its cloud business.375 > How Amazon has cross-leveraged its advantages across distinct lines of business suggests that the law fails to appreciate when vertical integration may prove anticompetitive. This shortcoming is underscored with online platforms, which both serve as infrastructure for other companies and collect swaths of data that they can then use to build up other lines of business. In this way, the current antitrust regime has yet to reckon with the fact that firms with concentrated control over data can systematically tilt a market in their favor, dramatically reshaping the sector. Is there actual independent reporting on this alleged business practice? I have heard Amazon folks "refute" this 'myth' a few times -- around the likes of WalMart / Target / BestBuy refusing to use AWS -- assuring customers that AWS and Amazon retail are strictly separate businesses. But haven't seen real reporting on any specifics. Is it mostly conjecture? EDIT: The part of the report I quoted has a footnote / reference to this Reuters report (dated 2011) https://www.reuters.com/article/amazon-cloud-idUSN1E7A727Q20111109 https://www.reuters.com/article/amazon-cloud-idUSN1E7A727Q20...
- foepys 3y ago
- thepaulthomson 3y agoWow, the FTC is really turning up the heat on Amazon! It's like a high-stakes poker game, and the FTC is going all in with this antitrust lawsuit. It's going to be interesting to see how this plays out, especially with all the different aspects of Amazon's business in the crosshairs. From Amazon Prime to their logistics and advertising services, it seems like no stone is being left unturned. And with Lina Khan at the helm, who's been pretty vocal about her views on Amazon, things are bound to get interesting. Grab your popcorn...
- deleted 3y ago[deleted]
- 40yearoldman 3y agoNooooooooooo!
- sashank_1509 3y agoIt’s amazing how inept FTC is to target the one company that feels least like a monopoly. Amazon has no pricing power. If they increase prices customers will leave to Target, Walmart etc. in fact every single one of amazon businesses has a lot of competitors that customers can move to. Google on the other hand is the dictionary definition of a monopoly. Microsoft Windows is a monopoly for consumer desktops. Apple is an annoying brand based monopoly that also made it the most valuable company to ever exist. What is the FTC trying to tell companies, using low prices to get as much market share as possible is illegal but having a technical edge that makes you the only player is completely fine?
- theanonymousone 3y agoNon-native speaker here: Shouldn't the verb in the title be "prepares" instead of "readies"? Were all the things we learned in the English class this useless?
- HWR_14 3y agoEither is acceptable as used in the title. English does have a lot of synonyms. There are circumstances where "ready" is the wrong verb to use but "prepare" is not, so I think your English class having you learn "prepare" is the correct choice.
- nosefurhairdo 3y agoAmazon is not a monopoly. They offer a compelling bundle of services. The whole point of breaking up monopolies is that monopolies are uniquely positioned to manipulate market prices. None of Amazon's businesses can arbitrarily increase prices without losing customers to their competition. In 2020 Amazon's political donations were roughly half those of Google and Microsoft, two companies who could more easily qualify as monopolies. Microsoft used to explicitly avoid political donations until the FTC made noise about breaking them up. Meta gets away with donating less because, as Zuckerberg stated on Lex Friedman, they collude with federal agencies to censor wrongthink. Amazon will remain whole and they're going to have to raise their protection fee to the Federal Mafia.
- glimshe 3y agoLina Khan wrote an influential essay about Amazon and monopoly in college. She will come with guns blazing for this one after the crushing defeat in the ridiculous lawsuit against the Activision purchase. Amazon both revolutionized and destroyed large parts of physical retail. I'm thinking about whether I want the FTC to win this one.