E-commerce giant Amazon is the subject of a major investigation linked to its Prime service. It’s not sitting idly by.
The tech and e-commerce giant will not sit silent in the face of what it sees as unfair attacks from regulators. The Seattle group has just struck hard at the U.S. Federal Trade Commission.
The antitrust regulator has opened an investigation into Amazon Prime. It questions whether Amazon is misleading consumers about how they subscribe to and unsubscribe from the paid service, which includes fast and free delivery of products as well as series, films and sports on Prime Video, tunes via Amazon Music and more.
The investigation, which had never been officially announced, has just been confirmed by the company in public documents.
In the about 50 pages of documents Amazon accuses the FTC of extending its investigation to services that have nothing to do with Prime, such as Audible, Kindle Unlimited and Amazon Music.
Amazon Says FTC Harasses Bezos, Jassy
The company also denounces the federal agency’s methods, accusing it of having only one concern: completing the inquiry as quickly as possible to the detriment of substantive work.
The FTC’s “handling of this investigation has been unusual and perplexing,” the company said. “The current impasse has been brought about by unexplained pressure placed on [FTC] staff to complete the investigation hastily, by an arbitrary deadline.”
The company continued:
“But staff’s own behavior has exacerbated the breakdown in this investigation, with the most recent incident being the most egregious: staff has attempted to restrict, contrary to law and FTC practice, counsel’s ability to jointly represent Amazon and the individual CID recipients.”
CID stands for civil investigative demands. They are similar to a subpoena.
Amazon is trying to limit and quash these CIDs issued to current and former employees, the company and also to Executive Chairman Jeff Bezos and Chief Executive Andy Jassy.
Amazon says it wants to quash the CIDs addressed to Bezos and Jassy because their testimony is unnecessary since staff below them can provide the information they possess.
The agency’s demand that Bezos and Jassy testify at an investigational hearing “on an open-ended list of topics on which they have no unique knowledge is grossly unreasonable, unduly burdensome, and calculated to serve no other purpose than to harass Amazon’s highest-ranking executives and disrupt its business operations,” the company alleged.
“Preparing either to testify regarding the granular details of business operations for which they have no unique knowledge and no day-to-day responsibilities would be a tremendous burden on them, on counsel, and on Amazon.”
The FTC declined to comment.
A Complicated Relationship
Amazon says that it has cooperated from the March 2021 start with investigators from the federal agency. The e-commerce giant says it has sent more than 37,000 pages of documents and answered questions.
But the FTC’s “staff inexplicably disengaged,” the firm said. Then, last April, almost six months after the FTC’s silence, “staff abruptly notified Amazon that a new attorney would be taking over and that staff was ‘under tremendous pressure’ to conclude the investigation.”
The owner of the Alexa artificial-intelligence-driven virtual assistant says it needs a lot more time to respond to new requests from the FTC. Amazon also wants more time to prepare current and former employees.
Amazon has a complicated relationship with the FTC, which is run by Chairwoman Lina Khan.
An article about Amazon she wrote for the Yale Law Journal in 2017 caused a stir. Headlined “Amazon’s Antitrust Paradox,” the article pleads for a rethinking of antitrust enforcement in digital markets that would reshape industry practices.
“Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead,” Khan wrote.
“Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns — yet it has escaped antitrust scrutiny.”
No surprise, then, that the company last year filed a petition to have Khan recuse herself from all antitrust cases concerning Amazon.