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“Mr. Bezos, I believe you’re on mute.”
Jeff Bezos’s testimony during federal hearings into alleged anticompetitive practices might not be quite as memorable as that time Mark Zuckerberg had to explain the internet to Congress, but federal antitrust law has still managed to monopolize headlines in recent months, with even late-night host John Oliver weighing in.
Amazon has been in the hot seat and is facing questions in the US and abroad about data privacy and pricing:
- The big antitrust issue for Amazon when it comes to data is whether it collects and uses information from sellers to develop private-label products, which can then compete for customers on the platform.
- Amazon has repeatedly denied the accusation, including in front of a congressional subcommittee in 2020. (The subcommittee later asked the Justice Department to step in to investigate potential obstruction of Congress.)
- The EU, Germany, and the UK all have their own probes. Earlier this month, Amazon moved to settle with the EU, agreeing to “stop collecting nonpublic data about merchants that it competed with” on the platform, according to Reuters.
- Amazon also faces allegations that “the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market” from Washington, DC’s attorney general Karl Racine.
- In 2021, Racine sued Amazon alleging “illegal control of prices across [the] online retail market.” A Superior Court judge dismissed the case in March, but the attorney general is appealing, with support from the Biden administration.
Juggling act: “There’s a lot of different plates spinning now that all relate to the same issue,” Mark McCareins, clinical professor of business law at Northwestern University’s Kellogg School of Management, told Retail Brew. “But at the end of the day, the litmus test is federal court.”
And Amazon’s argument that sellers have other options and aren’t forced to use its platform is likely to be vindicated by the courts, he said.
“Under 100-plus years of antitrust legal precedent—much of it set by our Supreme Court—simply because a firm has grown large, has innovated, and has achieved even a dominant position in the market, is not, in and of itself, illegal,” McCareins said.
+1: Meanwhile, the Senate has three weeks left to vote on an antitrust bill sponsored by Minnesota Democrat and one-time presidential candidate Amy Klobuchar before its August recess. Senate majority leader Chuck Schumer has indicated the bill might not have enough support to make it to the floor.—MA
Editor's note: This story has been updated to reflect that the Kellogg School of Management is part of Northwestern University (and not Northeastern University).