Last week it was reported that the FTC was preparing a massive antitrust suit against Amazon.
According to reports, the main focus will be on whether Amazon favors third party vendors that use FBA or buy ads versus other vendors who do not.
Amazon is especially sensitive about FTC complaints and suits. We’ve had numerous clients file complaints. After all, this is the third potential FTC suit this year. Other cases have not necessarily revolved around third party FBA sellers. For example, one suit was about the difficulty with cancelling Amazon prime.
As most FBA sellers have observed, the “buy box” is online real estate that is generally favored for FBA sellers. Amazon has already lost similar cases in the EU. Amazon should not favor FBA over FBM sellers. Legally, they must provide a fair playing field. However, it is difficult to prove (without internal documents) that Amazon is implementing this type of policy. The FTC should have access to internal documents to determine whether this “buy box” policy was an official and sanctioned policy by the bosses at Amazon.
It is similar to how most online merchants have noticed that spending money on Google Adwords has a tendency to increase one’s position in the organic search rankings. Think of it as an unwritten incentive to encourage online businesses to spend money with Google. The Amazon case is similar. Spend more money on logistics and ads and you will have preference in terms of the “buy box.”
Are Amazon FBA Sellers Favored?
I expect Amazon to settle this case similar to the EU complaints. The current FTC commissioner has been unsuccessful in her reign. The Microsoft Activision merger was viewed as a 50/50 proposition. The UK banned the merger. However, the FTC’s case in the U.S. was unsuccessful. The current FTC has been extremely accommodating to big business especially the four major “big tech” companies.