Lina Khan has become sloppy with her big antitrust case against Amazon, critics say, and some fear her alleged mistakes will allow Jeff Bezos’ e-commerce giant to walk away from federal government monopoly accusations.
Khan, 34, chair of the Federal Trade Commission under Biden, built her antitrust case filed against Amazon in September in part on the argument that it unfairly shut down a program known as “Seller Fulfilled Prime.”
The program allowed third-party sellers to fulfill Amazon Prime orders, popular with customers because it allows free two-day delivery, without paying a fee to the tech giant.
Khan claims in his lawsuit that 95% of sellers met Amazon’s two-day deadline for Prime shipping and that Amazon ended the SFP in 2019 because it wanted to charge suppliers higher fees.
The SFP has been a talking point that the FTC is pushing as part of its public relations efforts. Communications director Douglas Farrar tweeted a screenshot of the arguments and claimed that Amazon’s decision to shut down SFP was one of the reasons the company is “an illegal monopolist.”
However, in response, Amazon claims the FTC’s argument is “highly misleading” and provided drastically different percentages about the program’s viability.
“The fact is that in 2018, sellers using Seller Fulfilled Prime promised two-day delivery less than 16% of the time, far worse than the performance of sellers using FBA and well below high standards. and expectations that our customers have for Prime. ”Amazon spokesperson Tim Doyle said in a statement.
Amazon reinstated the program earlier this year. While some speculated that pressure from the feds could have been a factor, Doyle gave a different account.
“We have learned a lot and over the last few years updated the program requirements,” Doyle said. “We have now reopened enrollment for an enhanced Seller Fulfilled Prime program that can meet our customers’ expectations.”
In this particular skirmish, antitrust watchdogs fear that Amazon’s version of events rings uncomfortably true. Khan’s ruling is not only “shameful,” but it is also part of an unfortunate pattern that has hurt other regulators’ efforts to rein in big tech companies.
“The Department of Justice is actually working to address legitimate issues and leverage tried and true theories,” Joel Thayer, principal at Thayer PLLC, told On The Money. “Whereas the FTC under Khan seems more disorganized and does not seem to be as thoughtful as the Department of Justice in developing its theories or strategies.
“Unfortunately, actions like those by the FTC make it more difficult to achieve real movement on desperately needed antitrust reform because it undermines the credibility of the movement,” Thayer added.
Part of the problem, some sources suggest, is that Khan’s arrogant, micromanaging leadership style has alienated and driven away many of the career employees who typically triple-check each case for errors.
Earlier this year, former Commissioner Christine Wilson resigned, writing in a scathing op-ed in the Wall Street Journal that “Under [Lina Khan’s] leadership and trained career staff have been despised and marginalized.”
“In 2020, the last year under Trump appointments, 87% of FTC employees surveyed agreed that the agency’s senior officials maintain high standards of honesty and integrity. Today that proportion is 49%,” Wilson added.
In a statement, FTC spokesperson Douglas Farrar said that “Amazon, not sellers, sets the delivery estimate for sellers enrolled in Seller Fulfilled Prime, and sellers met or exceeded Amazon’s delivery estimates on 95 % of the time. If Amazon cared about SFP’s shipping speed, they would let sellers work with third-party logistics services, but instead we claim they force sellers to use Fulfilled By Amazon to protect their illegal monopoly so they can continue collecting rents. of monopoly to sellers, which takes away their profits. raise the price for American consumers.”
