If the FTC Wants to Start Winning Cases, It Should Focus on Consumers Getting Hurt, Not Amazon Prime 

COMMENTARY

When was the last time you ordered something on Amazon? If you answered “within the last week,” you’re in good company. Two-thirds of Americans, myself included, use Amazon at least weekly. With three young kids, something new arrives on our porch every few days.

And while Americans rely heavily on Amazon Prime’s two-day shipping, a potential new lawsuit from the Federal Trade Commission could end it. If the FTC proceeds with the lawsuit, it could hamstring the logistics services that ensure Amazon can send us our orders fast. 

Not only would this be a disservice to consumers, who subscribe to Prime for its speediness, but it would also harm online sellers, who rely on fast shipping guarantees to bring in more orders. Unlike Amazon Prime, FTC Chairwoman Lina Khan’s crusade against the service is a lose-lose deal for everyone. 

Public opinion polling shows that voters are worried about more pressing issues than Amazon’s shipping logistics. A recent survey from Chamber of Progress and Morning Consult found that when it comes to tech-related concerns, a majority of voters rank protection from online scams and improved cybersecurity as the top issues they want President Biden to tackle. That’s followed closely by national issues like data privacy and broadband access.

Khan is misplacing her focus on fighting losing battles consumers aren’t asking for. Just take a look at the FTC’s recent failed lawsuit attempting to block the acquisition of Activision Blizzard. Despite Microsoft’s offering to address FTC concerns over the merger, the agency refused to work out a deal and instead pushed forward with a dead-end lawsuit. That loss came after the FTC’s challenge to a Meta virtual reality acquisition also failed in court. It stands to reason the FTC’s Amazon lawsuit may end the same way. 

There’s no doubt that Amazon’s services, especially its Prime membership program, are immensely popular. In fact, Amazon Prime reached a milestone of 200 million subscribers last year. And while Amazon has managed to attract millions of users, those users are overwhelmingly happy with the services they access. Nine out of 10 users report being satisfied with their subscription, including 89% of Democrats. 

Khan’s potential case against Amazon is reported to allege that Amazon’s practices have hurt companies that sell their goods through its service. But Amazon’s ultimate obligation is to customers, not sellers, and sellers who don’t deliver speedy, high-quality products to consumers shouldn’t have the right to be featured on Amazon’s platform.

Even most businesses agree that Amazon’s shipping fulfillment service is a good deal. About half of Amazon’s merchants use Fulfillment by Amazon, which warehouses and ships products on behalf of sellers. Businesses that use the service typically see 30% lower shipping costs. For small, independent sellers, the ability to save on shipping and promise customers quick delivery can mean more overall sales and a bigger bottom line.

Of course, merchants may still sell products through Amazon even if they choose other fulfillment options. Amazon’s logistics service is just that, an option — customers and merchants shouldn’t be punished for its popularity.  

The FTC should absolutely be looking out for consumers’ best interests. But doing away with a popular service that supports millions of American shoppers and small businesses isn’t the way to achieve that. Instead, Khan should be focusing the FTC’s resources on real threats to consumers, like tackling scams, fraud, malware and cybersecurity risks in today’s digital age — or mergers that increase prices for groceries and health care.

Khan may sue Amazon because she alleges it has hurt sellers. But the FTC should bring its focus back to protecting consumers instead, combating the problems they’re really concerned about.

Adam Kovacevich is the founder and CEO of the Chamber of Progress, a tech industry policy coalition promoting technology’s progressive future. You can reach the Chamber of Progress by email and Adam on Twitter.