Unpacking the FTC’s case vs. Amazon

GeekWire Illustration / Shutterstock Photo / FTC HQ By Carol M. Highsmith, Public Domain

The outcome of the Federal Trade Commission’s lawsuit against Amazon could be years away. But there’s a chance we’re already seeing the impact of antitrust scrutiny in the e-commerce giant’s business decisions.

It may be difficult to separate the company’s business motivations from potential attempts to preempt the structural relief pursued by the FTC in the case, which was filed this week in U.S. District Court in Seattle.

But as one example, Amazon’s decision to axe a previously planned 2% surcharge for its rebooted Seller-Fulfilled Prime program came just days before the FTC suit was filed — perhaps not coincidentally running counter to one of the core themes in the subsequent antitrust complaint.

It’s part of a broader trend of Amazon making decisions and launching programs more favorable to sellers, says Jason Boyce, a former seller who has been critical of the company’s policies and practices in the past.

“Undoubtedly, there’s some pressure coming from the FTC case,” he says. Internal factors, including changes in Amazon’s executive leadership, may also be playing a role in the changes. But ultimately, he says, Amazon sellers don’t care about the company’s motivations, as long as it keeps listening and addressing their challenges.

Jason Boyce, Avenue7Media

Long term, Boyce says he hopes the case will help spur Amazon to do even more for sellers, rethinking its own far-flung corporate ambitions (i.e, brick-and-mortar stores, OneMedical, Project Kuiper, Prime Video, etc.), and applying its financial resources instead to restructuring the fundamental economics of its flagship e-commerce marketplace.

“Sellers would love to see lower fees,” he says. “I’d love to see it for my clients. … Maybe this pressure will help.”

Amazon’s seller fees, and the impact on consumer prices, are core to the dispute between the FTC and the company.

  • The FTC says the company’s tactics “allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.”
  • Amazon says the “practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”

That’s one of the angles we explore on this week’s GeekWire Podcast, as we dive deep into the landmark lawsuit. Boyce, the co-author of “The Amazon Jungle,” host of the Day 2 podcast, and CEO of Avenue7Media. Boyce offers a unique perspective on Amazon’s practices and the broader e-commerce landscape, drawing from his 17 years of experience as a seller and his current role working with third-party sellers.

We discuss the implications of the lawsuit for Amazon, consumers, and sellers in the context of the changing dynamics of online retail. We also touch on Amazon’s evolving relationship with sellers, the challenges of omni-channel retail, and the rise of new online marketplace competitors. 

Listen above, or subscribe to GeekWire in Apple Podcasts, Google Podcasts, Spotify or wherever you listen.

GeekWire coverage

Lawsuit: FTC et al vs. Amazon, U.S. District Court for the Western District of Washington

New York Times: For Amazon’s Andy Jassy, a Cleanup Job Just Got a Lot Bigger

Reuters: Amazon drops planned merchant fee as FTC lawsuit looms

CNBC: FTC Chair Lina Khan: Amazon lawsuit is about protecting free and fair competition

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