- The Federal Trade Commission is questioning Amazon’s competitors about some of its business practices, according to Vox.
- While this doesn’t mean that the FTC has launched an investigation into Amazon, it signals that the tech giant is becoming the focus of increased regulatory scrutiny.
- Sources told Vox that the FTC is interested in Amazon’s logistics service, its role as both a seller and marketplace, and Amazon Prime.
- Visit Business Insider’s homepage for more stories.
The Federal Trade Commission is homing in on Amazon.
A new report from Vox revealed that the government agency has been questioning Amazon’s rivals about some of its business practices, including how it competes with its own third-party sellers and whether its Prime services are unfairly undercutting competitors.
While this doesn’t mean that the FTC has launched an investigation on Amazon, it signals that the tech giant is becoming the focus of increased scrutiny.
Earlier this month, The Washington Post reported that the FTC and Department of Justice (DOJ) have carved up responsibility for any antitrust investigations concerning Amazon and Google. Under this new agreement, the FTC has oversight of Amazon.
Amazon did not immediately respond to Business Insider’s request for comment. The FTC declined to comment.
For Amazon, the main concern for both regulators and competitors is that the company is so dominant that it’s impossible for others to compete. Sources familiar with the matter told Vox that the FTC is speaking to Amazon’s competitors about three areas of interest:
1. The pricing structure for logistics service Fulfilment by Amazon
Amazon’s FBA logistics service gives third-party sellers the chance to have any items sold on Amazon’s site stored, packaged, and shipped out to customers by Amazon for a fee. Amazon offers the same service when a seller is selling these items on other marketplaces such as eBay or Etsy, for example. But according to Vox, the fees to do so are around 75% more than when they are selling on Amazon. Vox said it is the massive price discrepancy that caught the FTC’s attention.
2. Amazon’s role as both a seller and marketplace
The FTC is also reportedly asking questions around one the most contentious areas of Amazon’s business: its role as both a seller and a platform for other merchants to sell on. This has been very publically criticised by Senator Elizabeth Warren, who – drawing on recent reports that Amazon used the third-party to create its own versions of best-selling items – accused Amazon of “crushing” small businesses.
3. Amazon Prime
Lastly, sources said the FTC is questioning whether Amazon Prime unfairly undercuts the competition by bundling together its services, such as video, music and one-day delivery, for one fee.
Business Insider Emails & Alerts
Site highlights each day to your inbox.