According to sources familiar with the matter, it has been reported by the Wall Street Journal that the Federal Trade Commission (FTC) may take legal action against Amazon later this month. This comes after the company failed to offer any concessions to settle antitrust claims. The lawsuit will specifically target Amazon’s logistics program, Fulfillment by Amazon, as well as pricing practices by third-party sellers on its website. The report also suggests that the FTC may propose “structural remedies” that could potentially result in the breakup of the company. Both Amazon and the regulator declined to comment on the matter.
Furthermore, it is worth noting that the FTC’s lawsuit is expected to propose these “structural remedies” in an effort to address concerns surrounding Amazon’s alleged anti-competitive practices. This development comes amidst growing criticism of Amazon for favoring its own products over those of external sellers on its platform, among other allegations. However, Amazon has consistently denied these claims.
In addition to the current legal situation, it is worth mentioning that FTC Chairperson Lina Khan has been a vocal critic of Amazon. In a 2017 article published in the Yale Law Journal, she expressed concerns about the company’s structure and practices, highlighting potential antitrust issues. Khan’s appointment as FTC Chair has brought renewed attention to Amazon’s alleged unfair business practices.
It is also worth noting that the FTC has previously sued Amazon in June for allegedly enrolling customers into its Prime subscription service without their consent and making it difficult to cancel. This case highlights broader concerns about the company’s business practices and its impact on consumers.
As for Amazon’s stock, it experienced a slight dip of 0.4% in extended trading after news of the potential FTC lawsuit broke. Nevertheless, the company’s shares have still seen significant growth of approximately 63% since the beginning of this year.
In conclusion, the impending FTC lawsuit against Amazon signifies a significant escalation in the scrutiny the company is facing regarding its business practices. While Amazon firmly denies any wrongdoing, the allegations and criticism indicate ongoing concerns about the company’s market dominance and potential antitrust violations.
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