Ex-antitrust prosecutor on Amazon: 'There is plenty there for enforcers to go after'

Katie Krzaczek
Associate Editor

The Department of Justice is launching a broad-sweeping investigation into some of the biggest names in tech, looking into "whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers."

Though the DOJ hasn’t named any of the companies it will be looking into, Apple, Google, and Facebook are all preparing to come into focus. One former assistant attorney general believes Amazon is particularly primed for potential regulation.

Sally Hubbard, director of enforcement strategy at the Open Markets Institute and a former Assistant Attorney General in the Antitrust Bureau of New York State, has been keeping watch on the tech giant since about 2016. On Wednesday, she told Yahoo Finance’s YFI AM that “there is plenty there for enforcers to go after,” especially in its retail practices.

‘You’ve made competition impossible’

Just last week, the European Union’s top antitrust regulator revealed it was widening an investigation into whether Amazon exploited data from third-party sellers to promote its own products over competitors.

Attendees at Amazon.com Inc annual cloud computing conference walk past the Amazon Web Services logo in Las Vegas, Nevada, U.S., November 30, 2017. REUTERS/Salvador Rodriguez

“Just because you’ve disrupted an industry alone isn’t going to get you in trouble,” Hubbard said. “What’s going to get you in trouble is exclusionary conduct, where you’ve made competition impossible.”

In theory, regulators could go after Amazon for predatory pricing — that is, pricing its items extremely low to drive competitors out of the market. But Hubbard pointed out that predatory pricing has two steps: After a company drives competitors out of the market, it has to raise prices to recoup its losses.

Hubbard explains that because Amazon generates so much revenue from its other businesses — such as Amazon Web Services that provides cloud computing platforms to individuals and companies — changing its retail business would likely not hurt the company that much in the long-run.

“Some of this anti-competitive conduct is a little short-sighted because of the amount of trouble it’s going to bring, it’s maybe not worth it,” she said.

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