Fourth lawsuit this year… ‘Antitrust’ is the first
If the FTC wins, corporate division is inevitable.
U.S., Google-Meta era, war with big tech
Amazon’s anti-monopoly rebuttal of “promoting competition”
The U.S. Federal Trade Commission (FTC) filed an antitrust lawsuit against Amazon, the world’s largest e-commerce company. While Google is also in the midst of an antitrust lawsuit with the U.S. Department of Justice, there is analysis that the Joe Biden administration is continuing to keep Big Tech (large-scale information technology companies) in check like a war. Since its launch, the Biden administration has argued that bloated Big Tech has too much influence on the market.
On the 26th (local time), the FTC stated in a 172-page complaint filed in federal court in Seattle that Amazon is unfairly promoting its platform and services at the expense of online retailers who rely on the company. The FTC said, “Amazon prevents fair competition from occurring by preventing rival companies and sellers from lowering prices, reducing product quality, and suppressing innovation by imposing excessive fees on sellers.”
The FTC went on to point out that the measure to prevent online retailers that offer lower prices than Amazon from appearing in Amazon’s search results is an act of excluding competing companies. They also took issue with the fact that Amazon products appear first in search results even if competitors’ products are of better quality. The FTC said, “If this is left unchecked, Amazon will continue to engage in illegal activities to maintain its monopoly power.” Amazon’s high fees were also pointed out as a problem. FTC Chairman Lina Khan (pictured), known as the ‘Amazon sniper,’ said at a briefing on the day, “Sellers pay Amazon $1 for every $2 in revenue,” and “Amazon, as a monopoly, makes shoppers and sellers pay more for worse service.” “They are abusing the monopoly by forcing them to do so,” he said. Amazon issued a statement on this day and refuted the claim, saying, “The practices questioned by the FTC helped promote competition and innovation throughout the industry.”
The FTC has filed lawsuits against Amazon four times this year, but this is the first antitrust lawsuit. If the FTC wins, Amazon will inevitably split up the company.
A lawsuit filed by the U.S. Department of Justice against Google for monopolizing the search engine market in 2020 has also been underway since the 12th. It is said that Google excluded competing companies by paying search engine advertising revenue to Apple, Samsung Electronics, etc. in order to install its search engine on web browsers and smartphones.
According to the Wall Street Journal (WSJ) on the 26th, Antonio Langall, a behavioral economics professor at the California Institute of Technology who appeared as a witness at the trial on this day, said that Samsung Electronics tried to modify the design of the smartphone web browser to allow users to easily change the default search engine, but Google solved the problem. He said he raised it. Professor Langell argued, “Google protested that Samsung Electronics violated the agreement, and Samsung Electronics withdrew the design change.”
In July of last year, Meta was sued by the FTC over the acquisition of Within Unlimited, the company that created the virtual reality fitness game ‘Supernatural’. Even though Meta’s own technology is capable of creating virtual reality apps, it avoided market competition by absorbing startups. However, the court ruled in Mehta’s favor, saying there was insufficient evidence that Mehta’s acquisition was unfair.
Columbia University professor Tim Woo, who served as special adviser to the White House in the Biden administration, mentioned the Google lawsuit in an article for the New York Times on the 26th and pointed out, “It is a war over new technologies.”
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.