Antitrust investigation of Amazon accelerates under new FTC boss
The Federal Trade Commission has revamped its antitrust inquiry into Amazon.com, shaking up the investigative team, re-interviewing potential witnesses and asking questions about the company’s recent acquisition of MGM Studios, three people familiar with the investigation said.
The agency has been looking at Amazon since 2019 over antitrust concerns with its retail business and cloud computing services. Lina Khan, who became chair of the agency last year, had made a name for herself with a groundbreaking legal paper on Amazon’s potential antitrust violations and has taken a personal interest in the investigation.
She has assigned the case to John Newman, an antitrust professor and former Justice Department prosecutor, who joined the FTC as a deputy director of competition in December and has reorganized the team investigating Amazon, according to the people, who asked not to be identified discussing nonpublic information about the situation.
The agency declined to comment on the reorganization. Amazon didn’t immediately respond to a request for comment.
During the administration of President Trump, the FTC opted to prioritize an antitrust investigation into Facebook and assigned only two lawyers to the Amazon one, two of the people said.
Before joining the FTC from Columbia Law School, Khan worked as a staffer for the House Judiciary antitrust subcommittee that had spent 16 months investigating Alphabet Inc.’s Google, Amazon, Apple Inc. and Meta Platforms Inc. Khan focused on the Google section of what eventually became the panel’s 449-page report, while an FTC staffer led the Amazon portion.
The report became public in October 2020, but by last summer the FTC investigation hadn’t broken any new ground from what had been outlined in the report, two of the people said.
After taking over the agency, Khan helped draft some lines of questioning for investigators, one of the people said. Since then, FTC lawyers have homed in on aspects of the investigation involving Amazon Web Services, the company’s lucrative cloud computing business, and more recently the $8.45-billion MGM acquisition.
After the deal was announced last May, Amazon has finally purchased MGM, giving Amazon control of one of Hollywood’s most storied brands.
Amazon said in March that it closed its acquisition of the movie studio when the FTC’s review of the deal expired without a challenge.
The FTC declined to comment directly on the deal at the time but issued a statement that it “does not approve transactions and may challenge a deal at any time if it determines that it violates the law.”
FTC lawyers have been asking questions about the MGM deal’s effect on the company’s video streaming service, Amazon Prime, two of the people said.
Amazon has sought to sideline Khan, arguing that her past work should preclude her from involvement in any FTC cases against the company. A similar recusal push by Facebook was rejected by the agency and a federal judge overseeing the FTC’s lawsuit against the company.
The FTC isn’t the only regulator focused on Amazon. In response to an antitrust price-fixing investigation by the Washington state attorney general, the company agreed to pay a $2.25-million fine in January and close a program in which it agreed on pricing with third-party sellers, rather than compete with them.
Karl Racine, the attorney general for the District of Columbia, sued Amazon last year alleging the online retailer encourages higher-than-necessary consumer prices through policies that guarantee the tech giant a minimum profit on each item sold, while discouraging merchants on the site from offering their products at lower prices elsewhere.
A Superior Court judge dismissed the lawsuit in March, but Racine is appealing with support from the Biden administration. European regulators are also investigating how the e-commerce giant treats sellers on its platform.