Amazon Could Be Hit With Massive Antitrust Suit Over Pressuring Sellers To Use Its Logistics Platform
A key component of Amazon's logistics empire is under threat.
The Federal Trade Commission is preparing a federal antitrust lawsuit against the e-commerce giant, alleging that it uses placement on its site to pressure third-party sellers into using its logistics services, Bloomberg reports.
The federal agency plans to accuse Amazon of rewarding third-party sellers who use its supply chain with higher placement in searches and on the "buy" button on product pages while withholding such placement from sellers who ship their products with competitors.
The FTC has been investigating the relationship between Amazon's logistics network and its retail platform, where third-party sellers account for over 50% of sales, since 2019, Bloomberg reports. One of the agency's key decisions for the anticipated case is where to file a lawsuit, either in federal court or in the FTC's administrative court.
Based on the scope of the investigation and FTC Chair Lina Khan's public comments about Amazon before and since she was appointed to her post in 2021, Khan could seek a reorganization of Amazon's corporate structure to halt the alleged anticompetitive behavior, Bloomberg reported.
As more and more third-party sellers have felt market pressure to sell on Amazon's platform, the company has raised its commission rate to more than 50% of a product's purchase price, up from 35% as recently as 2016, Bloomberg reported.
After Amazon's prodigious wave of industrial leases and acquisitions in the first two years of the pandemic proved to be a costly miscalculation, it has exited millions of square feet of warehouses and canceled plans for millions more. Alongside that retrenching, Amazon has sought to leverage its excess space by offering it to third parties, fully entering the third-party logistics business.
Amazon has been far from alone this year among major companies investing in providing logistics as a service, but its retail platform has always been central to its pitch for sellers to use more of its services. It may soon have to fight the U.S. government to keep it that way.
