The Big Deal in Amazon’s Antitrust Case

The claim that Amazon is crushing competition is both novel and railroad baron-style old-school.

Advertisement

Continue reading the main story

Supported by

Continue reading the main story

This article is part of the On Tech newsletter. You can sign up here to receive it weekdays.

Hoo boy, this is a moment. A government authority in the United States has sued Amazon over claims that the company is breaking the law by unfairly crushing competition.

The lawsuit, filed on Tuesday by the attorney general for the District of Columbia, joins the recent government antitrust cases against Google and Facebook. These lawsuits will take forever, and legal experts have said that the companies likely have the upper hand in court.

The D.C. attorney general, Karl Racine, however, is making a legal argument against Amazon that is both old-school and novel, and it might become a blueprint for crimping Big Tech power.

It’s a longstanding claim by some of the independent merchants who sell on Amazon’s digital mall that the company punishes them if they list their products for less on their own websites or other shopping sites like Walmart.com. Those sellers are effectively saying that Amazon dictates what happens on shopping sites all over the internet, and in doing so makes products more expensive for all of us.

Racine has made this claim a centerpiece of his lawsuit. Amazon has said before that merchants have absolute authority to set prices for the products they sell on its site, but that ignores that the company has subtle levers to make merchants’ products all but invisible to shoppers. If a merchant lists a product for less on another site, Amazon can respond by making it more cumbersome for a shopper to buy the item.

Amazon, in a statement to my colleagues, said that merchants have the freedom to list and price their products however they wish, but that Amazon can chose “not to highlight” products that are not competitively priced.

Why is the attorney general’s claim a big deal?

Legal experts have said that it’s tricky to sue technology giants for breaking antitrust laws. That’s partly because of the ways U.S. competition laws have been written, interpreted and enforced over the decades. But the lawsuit against Amazon bypasses this by saying that the tech giant hurts the public the same way that 19th-century railroads and steel giants did — by strong-arming competition and raising prices at will.

Last year, the legal scholar and Big Tech critic Tim Wu told me that he believed that those price claims were the strongest potential antitrust case against Amazon on legal grounds. (He has since been picked to advise the White House on corporate competition issues.)

I don’t know if any of these lawsuits against Big Tech will succeed at chipping away at the companies’ tremendous influence. And I can’t definitively say whether we’re better or worse off by having a handful of powerful technology companies that make products used and often loved by billions of people.

It has been remarkable, though, to see the evolution of thinking among some of the public and politicians, from justified awe of these companies and what they make to questioning the downsides of technologies and the at-times brazen companies behind them.

It’s a sometimes unfair and noisy mess. But remember why we got to this point: Technology giants are among the most powerful forces in our world, and the price of power is scrutiny.

How to fight back against bogus online information: The comedian Sarah Silverman and three of my colleagues are hosting a virtual event Wednesday about disinformation and how to combat it. Sign up here for the online event at 7 p.m. Eastern. It’s open only to New York Times subscribers.

Before we go …

Florida passed a law that will fine social media companies for permanently barring political candidates’ accounts. The measure is most likely unconstitutional and unenforceable, Democrats, libertarian groups and tech companies told my colleague David McCabe, but it’s a response to Facebook’s and Twitter’s suspension of former President Donald Trump.

Posting is life. My colleague Taylor Lorenz explains how social media invitations to a teenager’s birthday party spread on TikTok and drew thousands of people and a police crackdown. The event got big partly because it was an opportunity for attendees to post compelling material online. SIGH.

POTUS loves Apple News? I don’t like it when computers and smartphones come with the device makers’ apps already installed, but it’s effective — even with the president of the United States. The Washington Post reported that during the 2020 campaign Joe Biden shared with aides human interest stories from Apple News, which came on his iPhone and he apparently hadn’t deleted.

Hugs to this

The Linda Lindas are glorious. Here is the talented punk band of four girls between the ages of 10 and 16 — Bela, Eloise, Mila and Lucia — playing “Racist, Sexist Boy” at a Los Angeles public library. The Guardian interviewed them about their sudden internet fame.

We want to hear from you. Tell us what you think of this newsletter and what else you’d like us to explore. You can reach us at ontech@nytimes.com.

If you don’t already get this newsletter in your inbox, please sign up here. You can also read past On Tech columns.

Leave a Reply