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Amazon gears up to defend itself against escalating antitrust scrutiny

Katherine Khashimova Long, The Seattle Times on

Published in Business News

Despite its efforts to ingratiate itself in Washington, Amazon is finding its current reception there markedly more cool than in the Obama era.

Recent Biden appointees are skeptical of large technology companies' power. Lina Khan, who penned an influential 2017 treatise proposing an overhaul of antitrust law to give government more power over Amazon's business activities, is a nominee to sit on the FTC, enforcing federal antitrust laws. Tim Wu, a Columbia University law professor known for criticizing the power of huge conglomerates like Amazon as yielding "gross inequality and material suffering," has been appointed a presidential adviser on technology and competition policy.

In the Senate, Amy Klobuchar, D-Minn., has introduced sweeping antitrust legislation that, among other reforms, would make it harder for dominant companies to win merger approval. Statehouses have passed new laws in recent months to limit large technology companies' reach, and state attorneys general are investigating antimonopoly and price-fixing claims against Amazon.

The House antitrust subcommittee, meanwhile, is mulling changes that could increase the enforcement power of antitrust agencies.

Democrats and Republicans largely agree that firms like Amazon have amassed too much market power, said Rep. Pramila Jayapal, D-Seattle, who last month was selected as the subcommittee's vice chair.

"Amazon's lines of business are giving [the company] a competitive advantage, allowing them to buy, acquire and kill competition," Jayapal said in an interview.

Media reports and the subcommittee's findings have documented that Amazon uses data from third-party sellers on its Marketplace platform to develop its own product lines, undercutting vendors reliant on Amazon's website and logistics services. Amazon has denied claims it uses individual vendors' Marketplace sales data, but the company does examine aggregate data to inform the creation of its own brands.

Lawmakers are "looking at ways we can ensure that companies like Amazon don't get to use competitor data," Jayapal said. That could mean new legislation or rule making prohibiting companies such as Amazon from competing in the same markets as clients — in this case, selling goods on Amazon.com — boosting their own products in search results, or excluding vendors from preferential deals on shipping and advertising.

 

Also on the table are proposals to prevent big tech firms from using dominance in one sector to compete in related sectors, which could hinder Amazon from selling products marketed under its more than 45 private-label brands, whether on Amazon.com or another site.

Those more sweeping recommendations are unlikely to be enacted, said Jack Kirkwood, a professor of antitrust law at Seattle University.

"Breakups of big firms rarely happen," he said. "It would cause consumer outrage if you can't get Amazon batteries, or whatever."

But there is bipartisan support for more incremental measures to increase the funding and reach of antimonopoly enforcement agencies like the FTC, which launched an investigation into Amazon's relationship with the third-party vendors on its platform in 2019.

"Tech titans have used their dominant positions to hike fees, misappropriate third-party data, steal Intellectual Property, and erect barriers to entry with the intent of keeping themselves in a position of power for decades to come," wrote Rep. Ken Buck, R-Colo., the ranking member of the House antitrust committee, in the minority report on last year's tech hearings. "Antitrust enforcement agencies need additional resources and tools to provide proper oversight."

"Antitrust is clearly having a moment," Bloom, the former DOJ antitrust litigator who has worked for Amazon, said in a recent videocast. "We have Republicans as condemnatory, if not more, as Democrats." Though many Republicans' interest in antitrust reform centers on hemming in what they say is Big Tech's censorship of conservative voices, "whatever their motivation, that makes them advocates of strong antitrust law," he said.

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