FTC’s Amazon Case and the Difference Between Speed and Reliability

November 2, 2023

Are Federal Trade Commission Chair Lina Khan and her minions being deliberately obtuse in an effort to puff up their antitrust lawsuit against Amazon?

The issue involves Seller Fulfilled Prime (SFP), in which Amazon sellers pack and ship their goods themselves. In its filing, FTC tells the court: “Sellers enrolled in SFP met their promised ‘delivery estimate’ requirement set by Amazon more than 95% of the time.”

On Thursday, FTC spokesman Douglas Farrar doubled down on this claim in the filing that Amazon had shut down SFP “because they said deliveries weren’t on time. But new info today shows sellers using SFP met the delivery requirement set up by Amazon more than 95% of the time.” In other words, the goods arrived when the seller said it would – even if was a week or two later.

It seems, however, that FTC misstates Amazon’s position and continues to deliberately conflate two very different metrics.

Amazon points out that the 95% statistic is about reliability – whether something is delivered when a seller said it would be. So if a seller promises a delivery in a week, or two weeks, and meets that slow target, they have satisfied their claim.

Speed is a different metric. Amazon claims that fewer than 16% of SFP orders in the United States met the Prime Two-Day delivery promise customers have come to expect. Amazon decided that it could not ask its customers, accustomed to Prime’s two-day delivery, to accept deliveries a week or two later under SFP. That is why Amazon paused the program.

Lina Khan told Bloomberg (6:45 mark) that “sellers were effectively meeting the same standards” of delivery that Amazon’s Prime meets. So it appears Chair Khan and FTC, ignoring the plain logic of Amazon’s protestations, are continuing to tell the public and the court that reliably slow delivery is the same as reliably fast delivery.

If that’s correct, this is a manifest misrepresentation that the FTC continues to push before the public and a federal court in Washington State.

Such a misrepresentation would be another indicator about the quality of the case Lina Khan is waging against Amazon. Her case is shoddy, rhetorical, lacking in economic analysis, and may be foisting a claim that is demonstrably untrue.