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--:-- Georgia Howe: Welcome to an extra edition of Morning Wire. I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's Saturday, September 30th.
--:-- John Bickley: That's right, Georgia. Today we're discussing the historic antitrust lawsuit filed against Amazon by the Federal Trade Commission and several state attorneys general.
--:-- Georgia Howe: Joining us to break down the case is Deputy Director of Consumer Choice Center, Yael Osaski. Yael, thanks so much for coming on.
--:-- Yael Osaski: Thank you so much for having me.
--:-- Georgia Howe: So, let's start with the basics. Can you lay out this lawsuit for us? Who's bringing the suit and what are they claiming?
--:-- Yael Osaski: So, what we have here is the Federal Trade Commission. They're the nation's top competition authority, and they're joining with 17 different state attorneys general. And they brought out a lawsuit against Amazon, claiming that they're a monopoly power and laying out various charges that relate to Amazon's marketplace, to their sellers programs, to the prime program itself. And they're essentially using this case to make the broader distinction that Amazon is too big and must be broken up by government officials.
--:-- John Bickley: That's a big claim. How significant is this suit? Has Amazon ever faced anything like this before?
--:-- Yael Osaski: So, from the FTC, this is definitely the largest case that they brought. We have a similar case against Google about its search monopoly that was brought by the Justice Department itself. This is from the FTC. FTC has launched previous suits against Meta for one of its acquisitions and against Microsoft to try to stop one of their mergers with Activision around computer gaming. So this is definitely the largest case that FTC has taken on. It was able to sign up the state attorneys general as well. So that is basically adding a lot of fire to this.
--:-- Georgia Howe: That's a lot to unpack. Can you break down some of the specifics of the claims? For example, how does the FTC say this affects maybe individual sellers or consumers?
--:-- Yael Osaski: So, Amazon has a two-day delivery prime program that likely many of your listeners are familiar with. And in order to offer that to customers, Amazon has its own sellers program where people opt into this and they're able to have prime delivery. And it means that they need to use the Amazon logistics in order to do so. Now, the FTC and the various state attorneys generals view this as strong arming, view this as trying to weed out competitors. And at the same time, Amazon has this price guarantee. They want to ensure that they have the cheapest price available for a product. So if any seller is going to other marketplaces with a higher price, Amazon will penalize them.
--:-- John Bickley: That's a key point. Another claim is that Amazon has deceptive practices related to shipping and logistics, and they have this idea of a tax, that something that noted in the complaint, and they say that the fee that is charged to the sellers in order to use the logistics is much too high. Again, that's something that's set by the market. The government views that as anti-competitive behavior.
--:-- Georgia Howe: That's a lot of technical jargon. What are you hearing from your legal colleagues? Do people think this suit actually has legs and could succeed?
--:-- Yael Osaski: It's very difficult because, really going back to standard oil, you know, perhaps the tobacco monopolies, we haven't really had a case of this scale and surely not one that deals with an e-commerce industry. Because you only have 14% of all retail that's online. There, Amazon has about a 37% advantage among all the other e-retailers. So it's not the traditional monopoly that we've known in the past, whether it be in oil or tobacco or something else. So a lot of legal experts are really thinking it's going to take a novel theory to really push this through. It really hasn't been done before.
--:-- John Bickley: That's a good point. Usually the metric for antitrust in the past 30 to 40 years has been on consumer prices. And it's pretty much anyone can attest if you use Amazon prices are record lows and they surely were during the pandemic when everyone was shopping online. So that metric is very difficult to bring into this case.
--:-- Georgia Howe: How do Amazon sellers feel about this? Are there any associations of sellers that are part of the suit or took any part in bringing it forward?
--:-- Yael Osaski: So this is purely a suit that's brought about by the government, the federal government through its independent agency, FTC, and then also the state attorneys general. You have had groups of sellers online who complained about the rates that Amazon is charging. But again, the vast majority of the sellers are still using the platform because it's the best place to go. It's where you can get your products to the market the quickest. And Amazon now has this very sophisticated logistics and delivery service all through the prime membership that can get stuff out the door and into people's living rooms pretty quickly.
--:-- John Bickley: That's a good point. Amazon has responded to this suit. They've put up a press release on their website. They've been a bit active in media. They sort of debunk it point by point. A lot of it has to do just with their consumer centrism. Jeff Bezos talks a lot about this and they quote him. They mentioned that they do everything they do to lower prices for consumers. And that has been a large approach of Amazon really since it was started and is a pretty stellar point.
--:-- Georgia Howe: That's a good point. The FTC doesn't have the strongest winning record as of late. So we'll just have to see what happens in the court.
--:-- John Bickley: Right. Well, we're going to be tracking this case. Yael, thanks so much for coming on and explaining this to us.
--:-- Yael Osaski: Thank you so much for having me.
--:-- Georgia Howe: That was Yael Osaski, Deputy Director of the Consumer Choice Center. And this has been an extra edition of Morning Wire. Bye.
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