Amazon and Chipotle

September 30th, 2023

Farhad Manjoo has an incisive piece in today’s New York Times on the disparities of FTC’s Amazon antitrust suit.

He quotes David Balto, former FTC official: “I think most competition scholars would say that the FTC needs to go to the competition optometrist to get a new prescription. They’re suffering from significant myopia.”

Manjoo notes that FTC’s complaint depicts Amazon as “Jaws in a fishbowl.” The FTC says Amazon monopolizes the markets for “online superstores” and “online marketplace services.” Under those terms “some of the biggest names in retail wouldn’t seem to qualify as relevant competitors to Amazon – not Home Depot, Kroger, Costco, Best Buy, TJ Maxx, Wayfair, Dollar General or other places from which Americans buy a great deal of stuff.”

The FTC suit claims Amazon’s share of the overall value of goods sold by online superstores is well above 60 percent and rising.

“I find this a little too cute,” Manjoo writes. “Amazon all but invented the notion of an online store that sells everything, and it’s been building out that idea for more than two decades; it’s hardly surprising that it dominates the category it pretty much brought into being.”

Then the money quote:

“Citing Amazon’s dominance in the online-everything-store business seems sort of like citing Chipotle’s dominance in the choose-your-ingredient burrito. Sure, it would be technically correct – but it wouldn’t meaningfully situate Chipotle in the larger marketplace for fast food.”

How, then, to explain FTC’s rambling mess of a lawsuit? We note that Khan’s career began as a dare with her law school paper to dethrone the consumer welfare standard by dismantling Amazon for its presumably predatory low prices. Now, after four major court losses, Chair Khan is trying to make her bones anyway she can – this time by embracing the idea of consumer welfare and trying to get Amazon for somehow fomenting higher prices.

So even the exotic legal theories and radical revision of antitrust law can be thrown out if it means Lina Khan can finally, somehow, someway, get Amazon.

At its root, this lawsuit is about one regulator’s ego.