The New York Times this morning reports that "Amazon is scheduled to meet with members of the Federal Trade Commission next week to discuss an antitrust lawsuit that the agency may be preparing to file to challenge the power of the retailer’s sprawling business, according to a person with knowledge of the plans.
"The meetings are set to be held with Lina Khan, the F.T.C. chair, and Rebecca Kelly Slaughter and Alvaro Bedoya, who are F.T.C. commissioners, said the person, who spoke on the condition of anonymity because the discussions are confidential.
"The meetings signal that the F.T.C. is nearing a decision on whether to move forward with a lawsuit alleging that Amazon has violated antimonopoly laws. Such discussions are sometimes known as 'last rites' meetings, named after the prayers some Christians receive on their deathbed. The conversations, which are usually one of the final steps before the agency’s commissioners vote on a lawsuit, give the company a chance to make its case.
"If the F.T.C. files suit, it would be one of the most significant challenges to Amazon’s business in the company’s nearly 30-year history. Amazon, a $1.4 trillion behemoth, has become a major force in the economy. It now owns not just its trademark online store, but the movie studio Metro-Goldwyn-Mayer, the primary care practice One Medical and the high-end grocery chain Whole Foods. It is also one of the world’s largest provider of cloud computing services.
"The F.T.C. has investigated Amazon’s business for years. The company’s critics and competitors have argued that the once-upstart online bookstore has used its retailing clout to squeeze the merchants that use its platform to sell their wares."
- KC's View:
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I don't think there is any doubt that the FTC is going to file some sort of antitrust suit against Amazon; it is hard to imagine what the company could say to satisfy Khan, whose antipathy toward Amazon is sort of what propelled her into such a position of influence.
While "last rites" may be the term of art, I'm not sure that it is appropriate in this case. Even if the FTC is successful in seeking a breakup of Amazon, I suspect that the company will put into action plans that already have been laid out. There are some who would argue that if Amazon is broken up it will be a boon to investors, since the pieces are worth more than the whole. (And the whole is worth a lot.)
I'm not yet persuaded that the FTC's view of how Amazon handles its retail business is fair - I think that for the most part, Amazon does pretty much what every other big retailer in America does, though it certainly does those things better and faster.
