The Federal Trade Commission and the American Booksellers Association think Amazon leverages market power to monopolize profits and hurt consumers — but for opposite reasons.
The FTC filed a long-anticipated lawsuit last September against Amazon, alleging the technology titan stifles competition to keep prices high. In April, the American Booksellers Association filed a motion to join that suit, but with a twist: It thinks prices are too low. This mishmash of accusations should make everyone nervous.
As Americans for Tax Reform’s Tom Herbert details in National Review, this glaring contradiction highlights everything wrong with the FTC’s recent antitrust push. The FTC invents its market definitions and then uses them to badger disfavored companies in court that politicians then use as talking points.
Such an arbitrary approach to antitrust law will likely harm consumers by prioritizing the pet projects of regulators and politicians over consumer welfare, leading to decisions that are made regardless of the effect on prices and innovation.
In contrast, over the last few decades the consumer welfare standard has been the lynchpin of antitrust enforcement prioritizing the likely end result on consumers. In competition policy, identifying the relevant markets is key to determining antitrust violations. Very little can be done in competition enforcement without appropriate definitions to judge cases. Here’s how the FTC butchers these market definitions to feed this narrative.
American consumers mix and match purchases from online and in-person retailers and wholesalers. Amazon products can be picked up online, but similar products can often also be bought in competing stores like Target, Meijer, Kroger, Bass Pro, Costco, many sporting goods stores, Home Depot, and more. In fact, consumers often comparison shop between online and offline stores to find the best and most convenient option.
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Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.