Lina Khan’s Case Against Amazon Refuted by Logic and the Market

December 13th, 2023

Two recent developments ought to prompt a federal judge in Washington State to toss out the Federal Trade Commission’s antitrust lawsuit against Amazon.

The first is a filing by Amazon’s lawyers calling out the paucity of logic, evidence, and law in the FTC’s action.

“Consider the [FTC] Complaint’s allegation that Amazon ‘rapidly’ matches competitors’ price cuts,” Amazon’s filing reads. “Matching rivals’ discount is not, in Plaintiffs’ jargon, an ‘anti-discounting tactic’; it is discounting, and the antitrust laws affirmatively encourage it.”

The filing also tees off on the FTC’s complaint that “faults Amazon for featuring competitively priced offers, and declining to feature uncompetitive ones, in the ‘Featured Offer’ or ‘Buy Box.’ As the government previously (and correctly) confirmed, these types of purchasing recommendations from retailers to consumers are ‘both pro-competitive and ubiquitous’ … Under the Complaint’s theory, Amazon would be required to feature what it knows are bad deals.”

After skewering the FTC’s complaint on the facts and law, the filing focuses on the central absurdity of the case against the retailer. The FTC, Amazon writes, “implausibly, and illogically, assumes that Amazon’s efforts to keep featured prices low on Amazon somehow raised consumer prices across the whole economy.” As I’ve written before, Lina Khan seems to exclude her team of 80 FTC economists from planning her lawsuits.

The second development is yet another sign that online retail is competitive and healthy. Dominick Reuter of Business Insider tracks how Walmart is going after Amazon by borrowing a Target strategy, planning to partially transform its chain of big box retail stores into distribution centers. Target realized that it doesn’t need to match Amazon’s massive distribution network. Target merely needs to leverage its 2,000 stores nationwide for fulfillment.

Now Walmart is adopting this Target strategy, planning to restructure its massive footprint of 4,700 stores that are within ten miles of 90 percent of the U.S. population.

These are signs of healthy competition in online retail that would pull the rug out from under FTC Chair Lina Khan’s antitrust suit against Amazon – if the lawsuit first didn’t pull the rug out from under itself.