FTC examination into Amazon supposedly getting ready

A federal probe into Amazon’s market supremacy is supposedly underway.

The Federal Trade Commission has actually begun speaking with small companies that offer items on Amazon, inquiring just how much of their organization counts on Amazon, Bloomberg reported Wednesday, pointing out 3 merchants who have actually been talked to.

The Wall Street Journal previously this year reported that the FTC and the Department of Justice consented to divvy up antitrust examinations into huge tech business, with the Justice Department checking out Google and Apple, while FTC will examine Facebook and Amazon.

The FTC decreased to comment Wednesday. Amazon didn’t react to an ask for remark.

These business are now dealing with numerous examinations, numerous that are simply getting going or were simply revealed, by  Congress, United States attorney generals of the United States, and the FTC and Justice Department. These examinations are all checking out prospective monopolistic practices, such as utilizing their big platforms to suppress rivals. 

The United States examinations follow years of examinations and fines directed at huge tech business in Europe. Those have actually consisted of a $5 billion fine in 2015 versus Google for antitrust practices utilizing its Android os. The European Commission in July revealed an antitrust probe into Amazon, too.

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Two days ago, 50 attorneys general announced an antitrust probe into Google. Just days earlier, Google confirmed a Justice Department investigation into its business, as well. And on Friday, Facebook became the target of an antitrust investigation by a handful of state attorneys general.

The FTC’s interviews of Amazon merchants appears to signal the early stages of a broad investigation into Amazon’s business practices, Bloomberg reported.

Chris McCabe, founder of Amazon seller consultancy ecommerceChris and a former Amazon employee, said he’s spoken to one seller who was already interviewed by the FTC and has heard from a handful of others who were looking to contact the agency. These sellers, he said, want to come forward after feeling ignored by Amazon for their past complaints and now see the FTC as a new authority that could help fix existing problems at Amazon.

“It looks like they are expanding their scope,” McCabe said about the FTC investigation, adding that the agency appears to be probing beyond just antitrust concerns and asking sellers about fake reviews and  seller account suspensions.

Amazon for years has faced criticism for allegedly pushing around smaller businesses and for gobbling up its competitors, like Zappos and Diapers.com. Smaller merchants on its site have often stated that they have few alternatives to Amazon, such as eBay and Walmart, making them increasingly reliant on the whims of Amazon.

Additionally, smaller merchants have complained that Amazon tends to copy their products by making private-label versions of them, making it harder for them to compete on Amazon’s marketplace. Amazon executives have said that private labeling is a small part of its business and that they don’t use smaller merchants’ data to determine what individual private label items to make.

The Free & Fair Markets Initiative, a vocal Amazon critic, applauded the FTC’s efforts.

“It is welcome news to see that regulators are finally getting serious about taking on the unfair advantage Amazon has staked out on its platform,” Robert B. Engel, a spokesman for the group, said in a statement. “The drumbeat of sellers who are speaking out against Amazon for its efforts to stamp out competition are growing louder and louder each day, and it is time for regulators to hold this company accountable.” 

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First published at 6:23 a.m. PT.
Updated at 11:19 a.m. PT: Adds comments from consultant Chris McCabe.