Thread by @linakhanFTC

1. Today @FTC and 17 state AGs filed a lawsuit detailing how Amazon uses punitive & coercive tactics to unlawfully maintain its monopolies. Amazon is exploiting its monopoly power to enrich itself while raising prices & degrading service for its customers.
ftc.gov/news-events/ne…

2. The complaint details a set of allegations spanning a variety of unlawful tactics by Amazon.

Amazon deploys all of these tactics to pursue a common overarching goal: deprive rivals of the scale needed to meaningfully compete against Amazon.

assets.bwbx.io/documents/user…

3. A critical mass of customers is key to powering what Amazon calls its “flywheel.” Controlling access to significant shopper traffic allows Amazon to draw more sellers—and benefit from the accelerated growth that network effects & scale economies can fuel.

4. The biggest threat to Amazon’s monopoly would be for a rival to attract its own critical mass of dedicated customers. Rivals able to build a sizable base of either shoppers or sellers could spin up their own “flywheels,” overcome barriers & achieve the scale needed to compete.

5. Having gained its own critical mass of both shoppers and sellers, Amazon set out to deny both current and would-be rivals the ability to do the same.

The complaint identifies two sets of tactics Amazon deploys to suppress competition and maintain its monopolies.

6. One is a set of anti-discounting tactics that Amazon deploys to punish sellers or retailers that dare to discount. Amazon’s sanctions prevent rivals from being able to grow by competing on price. Sellers then face fewer options & higher fees, and shoppers face higher prices.

7. The second tactic is a coercive scheme Amazon uses to effectively require that sellers use its fulfillment service, FBA. If a seller doesn’t use FBA, that seller effectively disappears from Amazon’s storefront—and FBA can only be used to fulfill products on Amazon.

8. This tactic significantly raises the cost of multihoming, where sellers could use a variety of channels and reduce their dependence on Amazon. Multihoming can be an especially critical mechanism of competition in online markets, enabling rivals to overcome barriers to entry.

9. Amazon caught a glimpse of this universe when it temporarily relaxed its coercive conduct & opened up "Seller Fulfilled Prime." SFP was immediately popular with sellers and shoppers—but Amazon saw it as a threat to its monopoly power and then resumed the coercive tie.

10. Having sealed itself off from competition, Amazon is now exploiting its monopoly power to harm its customers: the tens of millions of American families that shop on its platform and the hundreds of thousands of sellers that rely on Amazon to reach them.

11. Amazon has hiked so steeply the fees it charges sellers that it now reportedly takes around *half* of every dollar from a typical seller that uses FBA. Amazon now also litters its storefront with pay-to-play ads that steer shoppers to less relevant and more costly products.

12. In a competitive world, Amazon's decision to hike prices and degrade services would create an opening for rivals to draw business, gain momentum, and grow. But Amazon's monopolistic strategy closes off that possibility.

13. Through its years-long course of illegal conduct, Amazon has deeply entrenched its monopolies & further widened the gulf between Amazon and everyone else. Each tactic amplifies the force of the rest, in a self-reinforcing cycle of dominance and harm.

14. Our lawsuit asks the Court to put an end to Amazon's illegal course of conduct, pry loose Amazon's monopolistic control, deny Amazon the fruits of its unlawful practices, and restore the lost promise of competition.

assets.bwbx.io/documents/user…