Trump Should Pull the Plug on the Amazon Antitrust Lawsuit

By Robert Bork Jr.

November 22, 2024

For years economists praised the “Walmart Effect,” in which big box retailers’ everyday low prices had a measurable effect on restraining inflation. Walmart remains a fierce competitor in retail, demanding the lowest costs from suppliers, and passing the savings on to consumers.

Perhaps it is now time to talk about the “Amazon Effect” as well. Profitero, which offers software and services for brands, produced an independent study showing that for the eighth consecutive year, Amazon has continued to offer the lowest online prices compared to all major U.S. retailers. Profitero’s bread and butter is providing retailers with precise comparisons of prices offered by rival brands. They are in no sense out to do PR for Amazon or anyone else.

After analyzing more than 13,000 products across 22 leading U.S. retailers, Profitero found that:

• Amazon offers prices that are 14 percent lower than those of all major U.S.retailers, on average. The online retailer offers the lowest prices across 15 product categories – including appliances, goods for babies, beauty, electronics, fashion, packaged food and beverage, health and personal care, home furniture, household supplies, pet supplies, sports and outdoor goods, tools and home improvement, toys and games, video games, vitamins and supplements.

• When it comes to essentials, like beauty, baby and household must-haves, Amazon offers the lowest prices.

• Amazon’s prices beat competitors by up to 9 percent on top gift categories.

Yet the Federal Trade Commission, still in the thrall of its radical progressive Chair, Lina Khan, has all but accused Amazon of creating inflation in its ongoing lawsuit. 

Khan’s complaint reads: “Amazon’s tactics suppress rival online superstores’ ability to compete for shoppers by offering lower prices, thereby depriving American households of more affordable options.” And: “By taming price cutters into price followers, Amazon freezes price competition and deprives American shoppers of lower prices.”

Khan’s antitrust complaint argues that Amazon is forcing consumers to pay higher prices by requiring its sellers to use Amazon’s delivery system, while forbidding sellers from offering the same goods on other sites at lower prices. These claims betray Khan’s lack of real-world business experience, if not her neo-Marxist mindset. It would be insane for Amazon or any company to invest billions of dollars in a fulfillment and delivery system, and then open it up to competitors. It is also commonplace for retailers to insist on getting the best deal from their suppliers, and – like Walmart – pass the savings on to consumers.

How, logically, could a retailer like Amazon “freeze price competition” online while simultaneously offering the lowest prices?

The FTC’s antitrust action is a shallow attempt to import meddlesome, state-centered European Union-style regulation of business. If the recent election means anything, it is that Americans do not want to become a big Brussels. 

President-elect Trump should strike a blow for consumers by ending this illogical, ridiculous antitrust action and prevent the breakup of one of America’s consumer champions.