Blumenthal Asks FTC, DOJ to Probe Amazon Pricing

Sen. Richard Blumenthal, D-Conn., sent a letter asking the FTC and DOJ to open an investigation into Amazon’s price parity provisions, a controversial practice it ceased in Europe. Blumenthal announced the request Wednesday during a Senate Antitrust Subcommittee hearing, in which he claimed U.S. consumers are paying higher prices for goods via Amazon because of the “invisible” clause preventing merchants from charging lower prices. He called the contractual obligation for third-party sellers a barrier to entry and asked witnesses why Americans don’t deserve the same protections as Europeans. An FTC spokesperson confirmed it received the letter. DOJ didn’t comment.

Lawmakers and witnesses debated whether the U.S. should apply European antitrust methods in the U.S., particularly concerning tech issues. Chairman Mike Lee, R-Utah, warned against “poorly conceived interventions” that can chill the economy. The EU approach protects competitors, not competition, Lee argued.

The U.S. doesn’t need to follow Europe’s lead on antitrust, said ranking member Amy Klobuchar, D-Minn., and enforcers should forge their own path. On antitrust and privacy, U.S. officials are too afraid to do anything, she said. Silicon Valley is reshaping the global economy, placing more power in a relatively few companies’ hands, she said, arguing enforcers need to be properly equipped to police the trillion-dollar companies they oversee.

The European antitrust approach would stifle innovation and stagnate the digital economy, said International Center for Law & Economics President Geoffrey Manne, arguing the EU approach results in maximum litigation. The EU isn't obligated to show loss of a competitor would result in actual consumer harm, he said.

The U.S. should rethink whether the FTC needs additional authority to examine harm to competition, said George Washington University Law School professor William Kovacic, a former FTC chairman. Large tech companies are using their positions to keep competitors at bay with data leverage, and the EU has lessons to offer, said New York University law school professor of trade regulation Eleanor Fox.

George Mason University adjunct law professor Tad Lipsky, a former acting FTC Competition Bureau director, like Manne, argued EU standards for abuse of dominance contain a variety of elements in tension with the main policy objective of U.S. laws on monopolization.

Substantial harms can be overlooked in the digital economy​​​​​​​, said Paul Weiss attorney Jonathan Kanter, a former Competition Bureau attorney. “A prime example is the journalism industry, where growing concentration among digital distributors and platforms is impairing the ability to produce quality reporting.”