By Sarah Alberstein

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Despite the fact that Amazon has quickly become the center of e-commerce, it has essentially evaded antitrust scrutiny.[1] But, it seems that this pattern of antitrust evasion is changing. In 2017, Lina M. Khan published a Yale Law Journal Note titled Amazon’s Antitrust Paradox.[2] In it, Kahn posits that Amazon’s business and marketing scheme has resulted in a low-profit yet overwhelmingly expansive business presence which has seeped into the consciousness of the average consumer – and, the consumer loves it.[3] One of Amazon’s main tactics has been to undercut pricing of brick-and-mortar stores until the stores go out of business, and then Amazon takes over the physical space once the original stores are gone. [4] This combination of consumer preference and satisfaction, price-cutting and retail takeovers, while still generating negligible net profits, Kahn argues, have allowed Amazon to essentially evade antitrust scrutiny while still benefiting from the marketplace evil antitrust law attempts to stamp out – anticompetition.[5] It seems, however, that international regulatory bodies are catching on.

Austria has become yet another country to launch an antitrust probe into Amazon’s practices.[6] The Austrian Federal Competition Authority (“BWB”) stated that it “will examine whether Amazon is discriminating against smaller stores using its platform and is favoring its own products on the Amazon marketplace.”[7] This investigation is similar to a 2018 European Union antitrust probe designed to “determine whether or not Amazon puts…third-party sellers at a disadvantage by using their sales data to boost Amazon’s own sales.”[8] Also in 2018, yet another investigation was launched by the German antitrust authority, The Bunderskartellamt.[9] The German investigation centered around determining whether Amazon is preventing fair e-commerce competition by overpowering other German online retailers, and forcing consumer and seller dependence on Amazon.[10]

Like the international shifts towards stricter application of antitrust law to Amazon, similar shifts are gaining ground in the United States.[11] Lina M. Kahn, the aforementioned author of Amazon’s Antitrust Paradox, was recently hired at the Federal Trade Commission and will be participating in hearings on competition and consumer protection.[12] Additionally, Congress is starting to pay attention to large tech company business practices through an antitrust lens.[13] Ranking member of the antitrust subcommittee of the House Judiciary Committee, Rep. David Cicillene, D-R.I. has stated his vision for the subcommittee as to “figure out the responsible way to regulate these large plaforms so that we are promoting competition, protecting privacy and making them responsible stewards of lots and lots of data” by “hold[ing] congressional hearings with the companies and technology experts, craft regulations, and…engage the public on issues of limiting corporate power.”[14]

Both scholastic and legislative scrutiny has emerged, prompting local and international attention to Amazon’s business practices and impact on the e-commerce marketplace. While Amazon has grown to become a giant within the e-commerce, and general retail space, without much antitrust scrutiny, it seems that the beginning of the end of this period is near for Amazon.

[1] Lina M. Kahn, Amazon’s Antitrust Paradox, 126 Yale L. J. 3 (Jan. 2017), https://www.yalelawjournal.org/note/amazons-anttrust-paradox.

[2] Id.

[3] Id.

[4] Chris Sagers, Crack Down on Amazon, Slate (June 19, 2017), https://slate.com/business/2017/06/yes-there-is-an-antitrust-case-against-amazon.html.

[5] Id.

[6] Boris Groehndahl, Amazon’s Legal Woes Grow in EU as Austria Opens Antitrust Probe, Washington Post (Feb. 14), https://www.washingtonpost.com/business/on-small-business/amazons-legal-woes-grow-in-eu-as-austria-opens-antitrust-probe/2019/02/14/34a7289a-3050-11e9-8781-763619f12cb4_story.html?noredirect=on&utm_term=.018fe4232048.

[7] Id.

[8] Sara Salinas, Amazon hit by EU Antitrust Probe, CNBC (Sept. 19, 2018), https://www.cnbc.com/2018/09/19/eu-probing-amazons-use-of-data-on-third-party-merchants.html.

[9] David Reid, Amazon is Being Investigated by the German Antitrust Autority, CNBC (Nov. 29, 2018), https://www.cnbc.com/2018/11/29/amazon-investigated-by-the-german-antitrust-authority.html.

[10] Id.

[11] Priya Anand, Amazon Antitrust Push Slowly Gains Ground, The Information (Jul. 19, 2018), https://www.theinformation.com/articles/amazon-antitrust-push-slowly-gains-ground.

[12] Id.

[13] April Glaser, Antitrust in the House, Slate (Jan. 16, 2019), https://slate.com/technology/2019/01/antitrust-david-cicilline-congress-facebook-google-monopoly.html.

[14] Id.

 

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