Amazon Is Allegedly Going to Feel the Full Wrath of the FTC in Rumored New Lawsuit
Key takeaways
- The Federal Trade Commission (FTC) is said to be gearing up for its biggest lawsuit yet against Amazon’s core online shopping business
- The FTC already has complaints about Amazon’s iRobot acquisition and its Prime membership process ongoing
- Amazon’s stock price was unaffected, rising 1.8% on Friday
Amazon and the FTC have been at loggerheads for some time, but they might be about to head to their biggest battle yet. The FTC is rumored to be gearing up for a behemoth antitrust lawsuit against the e-commerce giant, targeting its core online business. The share price was undeterred by the news — here’s the lowdown.
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What’s the latest with FTC and Amazon?
The FTC is allegedly striking Amazon at the heart of its core business, its online shopping platform, in a rumored antitrust lawsuit. The issue concerns Amazon rewarding third-party online merchants that use its logistics services and unfairly penalizing those who don’t. FTC head Lina Khan is said to be looking for a complete restructuring of the online business.
The move comes after the FTC filed a lawsuit against Amazon regarding its Prime Membership service, where the FTC said the Big Tech titan had “tricked and trapped” consumers into additional Prime membership fees by making it too difficult to cancel.
Its $1.7 billion acquisition of smart vacuum company iRobot has also been under fire from the FTC, though the U.K.’s Competition and Markets Authority recently gave the deal its blessing, saying it would not cause a “substantial lessening of competition” in the country.
Wall Street’s reaction
Perhaps it’s the fact that the lawsuit hasn’t officially happened yet, or that Khan is clearly gunning for Amazon (she wrote a critical paper on Amazon’s dominance while at Yale), but Wall Street seems to have shrugged at the news.
Amazon’s stock price was flat on Thursday and has climbed 1.71% on Friday, buoyed by the good news around the Nasdaq nearing its best half-year performance in years. Amazon stock is up 51% since the start of the year.
The upcoming Amazon Prime Day also promises to be a boon for the stock as the busiest retail period of the year in the U.S. outside of Black Friday. Last year, Amazon had $12 billion of sales from the retail event.
The bottom line
Amazon is having a rough time of things with antitrust lawsuits, but at least it’s not the only Big Tech company under scrutiny for its dominance. Besides, investors aren’t showing any signs of the love affair with Big Tech slowing down this year.
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