FTC’s Amazon Lawsuit Is Really a Code of Conduct Manual
The government antitrust case is a guide for operators of other online marketplaces in how to be better partners with their sellers.
Don’t make the same mistake.
Photographer: Ronny Hartmann/AFP via Getty Images
The Federal Trade Commission’s lawsuit accusing Amazon.com Inc. of running an illegal monopoly has potential implications beyond the e-commerce behemoth’s successful marketplace and logistics business. For retailers that followed in Amazon’s footsteps and launched their own online marketplace, the lawsuit should act as a code of conduct on what not to do regardless of the outcome of the lawsuit.
Retailers from Walmart Inc. to Macy’s Inc. have followed Amazon’s e-commerce playbook in recent years and launched their own online marketplaces where independent sellers compete for sales. But where Amazon has gotten in trouble with the FTC is through its alleged abuse of power as the dominant marketplace landlord, marketplace seller and delivery business. The FTC accused the company of using a “set of interlocking anticompetitive and unfair strategies,” including punishing merchants for selling their goods for less on competitor sites and burying sellers that don’t pay for the company’s delivery or ad services. Amazon said its practices have spurred competition and innovation across retail, and consumers would face higher prices and slower delivery without them. Even so, Amazon is the US’s largest e-commerce company by far, taking almost 38% in market share, according to e-commerce market insights firm Insider Intelligence.