Date: February 27, 2019
What They’re Saying!
FTC Ramping Up Anti-Competitive Scrutiny & Fake Reviews On Amazon
FTC officials have announced the formation of a new task force to take on anti-competitive behavior from companies like Amazon to ensure “free and fair competition.”
“The role of technology in the economy and in our lives grows more important every day. As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.” (Federal Trade Commission, “FTC’s Bureau of Competition Launches Task Force to Monitor Technology Markets,” 2.26.19)
Lawmakers applauded the move as “an important step” that will challenge companies like Amazon in efforts to protect consumers.
“This is an important step toward restoring competition online and keeping the Internet open and innovative…Government has to do more to protect consumers!” (Twitter, David Cicilline, 2.26.19)
Regulatory action around companies like Amazon must move beyond “laser-focus on consumer prices” and address instead how they try to stamp out competition.
“The FTC, if it is to remain relevant, needs some way of assessing the evident competition problems in the tech sector and taking action when necessary. The FTC needs to get past its laser-focus on consumer prices, and figure out what competitive harm means in today’s tech markets.” (The Wall Street Journal, “FTC Aims New Task Force at Big Tech,” John D. McKinnon, 2.26.19)
The FTC can also take on mergers that have already gone through review, including Amazon’s billion-dollar deals for the acquisition of Whole Foods, Ring and PillPack.
“In the case the FTC does do a retrospective merger review, agency clarifies it has “the full panoply of remedies available to us” — which could include breaking companies up or spinning off pieces to fix competition. Gotta meet legal standard, including in court.” (Twitter, Tony Romm, 2.26.19)
FTC’s Bureau of Consumer Protection is already turning the heat up on Amazon with landmark settlement in its fake reviews case.
“People rely on reviews when they’re shopping online. When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.” (Federal Trade Commission, “FTC Brings First Case Challenging Fake Paid Reviews on an Independent Retail Website,” 2.26.19)
Amazon is required to notify consumers of the “sham” that was allowed to take place on its platform and hurt unwitting consumers.
“Highlight: @ewolffmann explains the “Fake Amazon review case” settlement a company reached with the FTC: “They have to go through every customer that bought this and tell them it was all a sham, and go to Amazon and identify each one of the fake reviews.”” (Twitter, Yahoo Finance, 2.27.19)
More action must be taken to ensure that “Amazon is held accountable for what happens on Amazon.com.”
“Fake reviews have flooded Amazon’s platform for years, and the company continues to turn a blind eye. Amazon has been unwilling or unable to put in place meaningful safeguards for consumers, and its failure to do so calls into question why any shopper can trust the company.” (Free & Fair Markets Initiative, “FTC TAKES IMPORTANT FIRST STEP IN CURBING FAKE AMAZON REVIEWS,” 2.26.19)
ABOUT THE FREE & FAIR MARKETS INITIATIVE
The Free & Fair Markets Initiative (FFMI) is a non-profit coalition of businesses, consumer advocacy groups, workers and community activists committed to scrutinizing and highlighting emerging market trends that are stifling competition and innovation, influencing federal and local government spending, putting consumer data in harm’s way and limiting consumer choice. For a list of members, please visit https://freeandfairmarketsinitiative.org/about-us/members/. For more information on the Free & Fair Markets Initiative, please visit https://freeandfairmarketsinitiative.org.