FTC Aims to Break Up Amazon's Empire

Next week, the US Federal Trade Commission (FTC) is set to confront Amazon with a major antitrust lawsuit aiming to break up its US$1.2 trillion empire for deceptive “dark patterns” tactics, according to a press release. The lawsuit is expected to focus on critical aspects of Amazon's practices, potentially leading to spinoffs of specific divisions.

The FTC has accused Amazon of engaging in deceptive practices to enroll customers in its Prime program without their consent and creating obstacles for them to cancel their memberships. The complaint filed in Seattle alleges that Amazon utilized manipulative and coercive user-interface designs, known as "dark patterns," to trick consumers into signing up for automatically renewing Prime subscriptions. The lawsuit focuses on third-party sellers, comprising 60% of Amazon's eCommerce sales. The claim alleges that the company leveraged its market power to punish merchants who declined to use its logistics services while rewarding those who complied.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC Chair Lina M. Khan. “These manipulative tactics harm consumers and law-abiding businesses alike. Khan has pursued antitrust cases against other tech giants including Microsoft, Meta and Google, all of which have ended in defeat, igniting criticism both outside and within the FTC.  

As the second-largest player in Mexico’s e-commerce market, AWS, holds a substantial 13.2 percent share of the total sales revenue. A significant improvement from its position in 2018 when it held a comparatively lower market share of 10.6 percent. The company’s success can be attributed to its strategic expansion since opening its first warehouse in Mexico back in 2015 and outsourcing labor.  

The FTC's antitrust lawsuit has garnered the attention of various public and private stakeholders who stand to be directly impacted by the outcome and precedent of the case.