Amazon to be broken up? FTC's Lina Khan to reportedly file landmark antitrust lawsuit

The Lina Khan-led Federal Trade Commission (FTC) in the United States is reportedly in the final stages of preparing a substantial antitrust lawsuit against Amazon, a move that could potentially lead to the dismantling of certain parts of the e-commerce giant.

Sources close to the matter, as reported by Politico, indicate that the lawsuit is expected to be filed as early as August and is likely to address a wide range of Amazon's business practices that have raised concerns about anti-competitive behaviour.

The scope of the lawsuit may have far-reaching consequences, potentially resulting in a court-ordered restructuring of Amazon's massive $1.3 trillion empire. The FTC has been conducting a lengthy investigation into Amazon, focusing on various potential claims, including allegations similar to existing cases where the company has been accused of imposing rules that require third-party retailers to offer their lowest prices exclusively on Amazon's platform.

Among the primary areas of focus for the forthcoming lawsuit are Amazon Prime and the practices that the FTC considers to be detrimental to fair competition. One major concern is that the bundled services offered through Amazon Prime are being exploited to illegally solidify the company's market power.

In a recent legal action against Amazon, the FTC accused the e-commerce giant of engaging in deceptive tactics to enroll customers in its Amazon Prime service without their full understanding or consent. The complaint, filed in a federal court in Seattle, alleges that Amazon has knowingly misled millions of consumers into unknowingly subscribing to automatically renewing Prime memberships. The FTC claims that Amazon employed manipulative and coercive user-interface designs, commonly referred to as "dark patterns," to trick consumers into recurring subscriptions, causing financial harm and frustration.

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Amazon Prime, which costs $139 per year in the United States, provides customers with benefits such as free two-day shipping, access to Prime Video, and music streaming. However, the FTC's concerns lie in the alleged deceptive practices used by Amazon to drive customers into subscription plans without their explicit knowledge.

FTC Chair Lina Khan expressed strong disapproval of these practices and pledged to protect consumers from such unfair and deceptive tactics in digital markets. She highlighted that these manipulative strategies not only harm consumers but also adversely impact law-abiding businesses. 

“These manipulative tactics harm consumers and law-abiding businesses alike. The FTC will continue to vigorously protect Americans from “dark patterns” and other unfair or deceptive practices in digital markets,” FTC Chair Khan said in a statement.

Amazon, in response to the pending lawsuit and the previous FTC claim, has strongly denied any wrongdoing. The company's spokesperson refuted the FTC's allegations, stating that their claims are factually inaccurate and misinterpret the law.

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