Amazon & Google Antitrust Cases Highlight “Newfound Vigor” to Fight Monopolies

The Federal Trade Commission and 17 states launched a broad antitrust case against Amazon on Tuesday, but its specifics are still unknown since so much of it is hidden from the public. We discuss the importance of this action, which was filed only two weeks after the start of a historic antitrust trial against Google, with David Dayen, author of Monopolized: Life in the Age of Corporate Power. After approximately 40 years of inactivity, there is “all this activity in the antitrust space,” according to Dayen, who claims that FTC Chair Lina Khan is leading the effort. The Biden administration has put in place a muscular team of antitrust enforcers, and Khan truly halted this alarming trend of the last 40 days.

Amazon & Google Antitrust Cases Highlight “Newfound Vigor” to Fight Monopolies

That is democracy. I’m Amy Goodman right now. The Federal Trade Commission launched a broad antitrust complaint against Amazon on Tuesday in 17 states. The corporation is charged with utilizing unquote harsh and forceful methods to illegally preserve its monopolies, which allowed it to raise prices, hurt consumers, and stifle competition. The action was led by FTC chair Lena Khan, who gained notoriety in 2017 while still a law student for her widely read scholarly piece advocating for the dissolution of Amazon. David Dayan, executive editor of the American Prospect, is here to add more. In a recent article titled “Amazon’s $185 Billion Pay-to-Play System,” he discussed this. Monopolized: Life in the Age of Corporate Power is the title of his most recent book.

Why don’t we begin? And thank you for returning today. You mentioned the significance of this action, which was filed barely two weeks after the start of a historic antitrust trial against Google when you were talking about it. Yes, after, um, you know, maybe 40 years of lethargy, there is now a ton of activity in the antitrust sector. The lawsuit, more particularly the Google trial, is the first monopolization trial in 25 years. It’s not a trial to contest a merger; it’s merely a claim that this corporation is engaging in illegal anti-competitive activities.

The Amazon case, which involves monopolization, presents the same issue. And certainly, as you mentioned, it claims that third-party merchants that utilize Amazon’s network are forced to employ a variety of services for which Amazon charges a hefty fee. About 45% of all third-party sales go to Amazon in fees, according to the study I talked about last week. These costs go for logistics, fulfillment by Amazon—their shipping and, well, warehousing networks—as well as advertising—since, if you use Amazon search these days, the first page is essentially made up of ADS. They might not be the most affordable item, the most practical item, or the most excellent goods, but third-party sellers have to pay for these things to be seen by those who are looking for items. Third-party merchants are thus encouraged to utilize these services to pay Amazon in several ways.

Additionally, there is a kind of anti-discounting restriction in place that prevents Amazon sellers from offering their goods at a reduced price on other websites. Additionally, since Amazon owns between 70 and 80 percent of all online sales, you need to be there to attract customers. However, um, essentially using an algorithm, Amazon scans the web to check if you’re selling the same goods for cheaper elsewhere, and if you are, you’re effectively voting in the search so that you can’t really be seen by Amazon’s customers, and therefore you can’t sell anything there. Therefore, this arrangement boosts prices on the internet and compels these vendors to increase their pricing.

In her own words, Lina Khan, head of the Federal Trade Commission, discussed the antitrust initiatives of the Biden administration on CBS in June. When there are free markets, you want them to be competitive, thus the established powerhouses must be open to challengers. Several antitrust actions are now in progress, alleging that some of these businesses have used anticompetitive strategies to unjustly obstruct competition. Therefore, David Dayan, if you can speak about Lina Khan personally, many corporate Democrats want Biden to remove her from office. She chairs the FTC. Yes, she did write this highly regarded law review essay regarding Amazon itself, as you said. Naturally, the business has said that They’re seeking to remove her from the case, just as they did with Jonathan Caner, the chief of the antitrust section, because of, um, comments he’s made in the past because she is now prejudiced. After all, she believes in upholding the laws as laid down.

Thankfully, judges have decided that there is no necessity for recusal in this case. Khan, um, symbolizes a tough team of antitrust enforcers that the Biden administration has installed and who have successfully reversed this alarming 40-year trend, to the point that even some Republicans are heading, uh, in that way. I’ll highlight that the FTC has been working on the case against Amazon for four years, while the Google action was actually brought near the close of the Trump administration. The probe thus, at least, began under Trump’s antitrust, I should say Federal Trade Commission, but, uh, plainly, both Lina Khan, Jonathan Caner, and Tim Woo, who was the former, are all responsible for this renewed aggressiveness in antitrust, according to the Biden administration’s antitrust chair.

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