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FTC preparing to file antitrust suit against Amazon

Illustration of a gavel handle made from the Amazon logo

Illustration: Annelise Capossela/Axios

The Federal Trade Commission is preparing to file an antitrust suit against Amazon that could lead to a breakup of the technology conglomerate, as reported by Politico and confirmed by Axios.

Why it matters: Such a case would rank among the most famous and largest, including Standard Oil, AT&T, and more recently, Microsoft.

The latest: A source familiar with the situation notes that the FTC has been investigating Amazon and that the report should be taken seriously.

  • The source says that the FTC wants to refocus antitrust enforcement on curbing the power of large corporations to protect small businesses.

Flashback: Legal scholar and former appeals court judge Robert Bork changed that thinking in the 1970s, to focus antitrust enforcement on consumer welfare and economic modeling, the source says.

Catch up fast: Bloomberg reported in late June that the FTC was planning "to file a far-reaching antitrust suit focused on Amazon's core online marketplace."

Of note: The DOJ and FTC are proposing new merger guidelines with officials at those agencies claiming they are based on statutes and case law, the source pointed out.

  • Ultimately, it's up to the courts whether they will accept the guideline changes and it will be a point of debate, says Brian Albrecht, chief economist at the International Center for Law & Economics.

What they're saying: Axios spoke to Amazon Web Services' Justin Honaman last week, who told Axios that the parent company has no plans of its own to break itself up.

  • While it does not cross-sell, Amazon believes it benefits from having multiple touchpoints with its retail customers, he says.
  • Carter's, for example, works with Amazon Web Services, uses Amazon Business for procurement, and utilizes its physical store technology, Honaman says.
  • And many of the retail technologies Amazon has perfected over the years were trialed and perfected in its own stores, he notes.
  • "Pan Amazon is what we call it," Honaman says.

Yes, but: When contacted to provide further comment, specifically on Politico's report, Amazon replied, "We are not providing comment at this time given it's pure speculation."

The big picture: Under the aegis of chair Lina Khan, the regulatory agency has become more aggressive in challenging companies on antitrust concerns.

  • The FTC is also scrutinizing the merger of Kroger and Albertsons, which would create one of the largest grocery chains in the U.S.
  • Even Tempur Sealy's $4 billion deal to acquire Mattress Firm, which would combine the largest mattress producer with the largest mattress retailer, is getting a hard look.
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