The Federal Trade Commission's (FTC) antitrust case against Amazon, launched on Sept. 26, is in many ways a departure from accepted antitrust case law and raises a number of questions such as why Amazon is the target, and what FTC Chair Lina Khan wants to achieve with her suit.

While federal agencies have brought antitrust cases against companies like Microsoft, Google, and other corporations that they feel have become too dominant, courts have typically followed what is called the “consumer welfare standard,” or the extent to which consumers are harmed, when ruling on these cases.

The FTC is alleging that “Amazon’s ongoing pattern of illegal conduct blocks competition, allowing it to wield monopoly power to inflate prices, degrade quality, and stifle innovation for consumers and businesses.” But many analysts question the logic of this case.

“It’s a strange neither fish-nor-fowl concoction,” Robert Bork Jr., president of the Antitrust Education Project, told The Epoch Times.

While still a college student, Ms. Khan wrote about her desire to target Amazon, but at that time her argument was that Amazon was too cutthroat in reducing prices as a means to eliminate competitors.

“In her famous college paper, Khan accused Amazon of using low prices in a predatory way,” Mr. Bork said. “Now she is accusing Amazon of forbidding sellers from selling products on other platforms with prices that undercut those of Amazon.

“It is at its heart illogical. How can a company that leads retail in offering the lowest prices also be the leader in raising prices?” he said. “The complaint that many sellers pay up to half of their total [income] to Amazon overlooks the fact that many of these small sellers would have no market at all without Amazon or something like it.”

“The whole argument is strained and sure looks like Lina Khan wants to make her mark by getting at Amazon any way she can,” Mr. Bork said.

Rewriting America's Antitrust Rules

Ms. Khan’s pursuit of Amazon reflects her intention to redefine U.S. antitrust law.

In her 2017 paper, published in the Yale Law Review, she stated that antitrust law is too focused on consumer welfare and that other standards should be applied to justify state action against companies. These new criteria include “our interests as workers, producers, entrepreneurs, and citizens.”

This sounds similar in many ways to the concept of “stakeholder capitalism,” which sits at the heart of the progressive environmental, social, and governance (ESG) movement, and according to which companies must serve wider social and political goals rather than simply generating profits and value for shareholders. The issue in both cases is that things like profits and consumer prices are more easy to quantify and measure, while more nebulous political, social, and environmental goals are subject to interpretation and manipulation.

“If she can somehow beat a company that is utterly consumer-centric and with the lowest prices, on antitrust grounds,” Mr. Bork said, “she will have enacted a new progressive paradigm in antitrust in which anyone can be sued for anything.”

If Ms. Khan wins her case against Amazon, some argue that consumers will be the ultimate losers. The suit would force significant changes to the Amazon Prime service, which currently has 167 million American members.

The FTC charges that Amazon uses data from other retailers on its site to boost its own brands; that it leverages its Amazon Prime service to box out competitors; and that it penalizes retailers who offer their products at lower prices on other sites. While the suit does give a nod to consumers by alleging that Amazon is driving up prices by limiting price discounts on other sites, this argument is largely an effort to help other retailers.

The suit alleges that Amazon has made it too difficult for other retailers to compete. What the FTC is up against, however, is that so many consumers apparently feel they benefit from Amazon’s innovations in pricing, product offering, ease of transacting, and speed of delivery.

According to a 2021 survey of Amazon customers in the Amazon Consumer Behavior Report, 72 percent of the 2,000 consumers surveyed said they belong to Amazon Prime, a subscription service that includes free shipping and access to streaming of music, movies, and television shows. In addition, as online shopping increases even beyond levels at the height of the COVID pandemic, consumer loyalty to Amazon is at an all-time high.

More than half of respondents said they visited Amazon’s online stores every day, and 62 percent of them said they bought something from Amazon in the past two months. And while competitors like Walmart are gaining in popularity with online shoppers, 62 percent of respondents said they begin their search for products at Amazon, and 75 percent said they check prices and product reviews on Amazon before making a purchase.

FTC Playing a Losing Hand

Many analysts believe the FTC will ultimately lose in court.

The horizontal merger guidelines written by the Treasury Department and the FTC in 2010 establish the consumer welfare standard as the essential guideline in determining whether companies are acting in a monopolistic way. It states: “A merger enhances market power if it is likely to encourage one or more firms to raise prices, reduce output, diminish innovation, or otherwise harm customers.”

This document signaled a consensus acceptance of arguments made by Robert Bork, judge and legal scholar (and father of Robert Bork Jr., who is quoted in this article) in his book, “The Antitrust Paradox: A Policy at War With Itself.” In this and other writings, he argued that consumer welfare should be the standard for antitrust law and litigation.

A 2022 report by the American Action Forum (AAF) states that the consumer welfare standard has been the foundation of antitrust policy for the past 40 years because it “is measurable using economic analysis and empirical evidence, facilitating a reliable and objective application of antitrust law.

“Commandeering antitrust policy as a tool to solve other societal ills including depressed employee wages and harm to competitors risks creating uncertainty, stifling innovation, and slowing economic growth,” the AAF states.

In a New York Post op-ed, Geoffrey Manne and Dirk Auer from the International Center for Law & Economics argue that Congress and America’s courts have repeatedly rejected Ms. Khan’s broader view of what antitrust law should entail.

“Legislative efforts to change antitrust law to comport with the vision Khan and her ideological allies put forward have failed to gain any meaningful momentum,” the authors argued. And the Supreme Court has repeatedly upheld the consumer welfare standard as the basis of antitrust law, they stated.

Another curious element of the FTC’s case against Amazon is the extent to which it quickly became politicized. Attorneys general from 17 states joined the FTC in bringing this case, but virtually all of them were from left-leaning states. The co-plaintiffs include Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.

California did not join the coalition, but brought its own lawsuit against Amazon in September 2022, charging that the company caused prices to increase by penalizing merchants who offered lower prices.

FTC Ignores Cases With Greater Consumer Harm

Another question critics have raised is why Ms. Khan would target Amazon instead of, for example, the meat-packing oligopoly that controls approximately 85 percent of beef processing and has vertically integrated to establish even more dominance over the pork and poultry industries. Cattle ranchers have charged that, as meat prices escalated during and after the COVID pandemic, those price increases benefitted meat packers and were not passed on to farmers.

This has left Americans utterly dependent on a handful of companies for much of their food.

To prevent situations like this, in addition to antitrust law, the 1921 Packers and Stockyards Act was specifically written “to assure fair competition and fair trade practices, to safeguard farmers and ranchers, ... to protect consumers, ... and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices," according to the U.S. Department of Agriculture.

The FTC and the Justice Department have taken no antitrust action in this industry.

There is also the FTC’s willingness to ignore corporate collusion in various net zero clubs sponsored by the United Nations’ Glasgow Financial Alliance for Net Zero, and which include the Net Zero Banking Alliance, the Net Zero Insurance Alliance, the Net Zero Asset Managers initiative, the Net Zero Asset Owners Alliance, and the Net Zero Financial Service Providers Alliance.

“The biggest question in my mind is why the FTC doesn’t go after the ESG movement in which large and powerful financial institutions, activist NGOs, and the proxy advisory duopoly are publicly promoting the restraint of trade in the energy sector, which last time I checked is a legal business,” Mr. Robert Bork Jr. said.

Several of these activist climate clubs, which are aligned with the ESG industry, have been flagged by conservative state attorneys general as potentially violating federal and state antitrust laws.

Far from joining state efforts to investigate antitrust behavior among Wall Street banks and money managers, the Biden administration has encouraged them to unite behind the global warming agenda. On Sept. 19, the U.S. Treasury Department announced its “Principles for Net-Zero Financing & Investment,” which pushes banks, insurance companies, and asset managers to unite behind U.N. climate goals.

These principles (pdf) state that “Treasury and the Biden-Harris Administration welcome robust net-zero commitments made by financial institutions. Treasury hopes financial institutions will use the Principles to support the implementation of their commitments.”

The FTC did not respond to The Epoch Times' request for comment.