Elizabeth Warren tries to guess which billionaire face she held up during a game on “The Late Show With Stephen Colbert” last year. (YouTube screengrab)
In a letter to Federal Trade Commission Chair Lina Khan, Senator Elizabeth Warren alleged that Amazon’s multi-billion dollar offer for MGM could harm consumers and expand Amazon’s market dominance beyond acceptable levels.
First published in The Verge, the letter outlined the senator’s concerns about the online retail giant’s power in streaming and entertainment services with Prime Video in addition to its dominance in other online areas and general greed for competition.
“Amazon’s massive presence in a multitude of retail businesses creates conflicts of interest across its entire online marketplace ecosystem, providing the incentive and opportunity to harm competitors in unexpected ways that narrowly focused antitrust analysis may not be able to foresee or uncover” Warren War wrote in a letter dated June 29 (see below).
“Therefore, in considering this transaction, the FTC should look beyond streaming and entertainment services and assess the potential competitive impact on customers, sellers and employees in all of Amazon’s retail segments.”
Before: The review of the Amazon MGM deal is being led by the FTC, now led by Big Tech critic Lina Khan. is directed
Last week, GeekWire reported that the FTC would be taking the lead in the government’s investigation into Amazon’s $ 8.5 billion bid for the movie studio – a move some legal experts have made, given the Justice Department’s historic role in reviewing such described potential acquisitions or mergers as unusual.
But more worrying for outgoing CEO and founder Jeff Bezos and the company’s executive team is Khan, the newly appointed head of the FTC.
It was Khan who published “Amazon’s Antitrust Paradox” in the Yale Law Journal in 2018, a landmark paper that today forms the basis of current proposed federal legislation to curb the reach of tech giants, including Amazon.
In it, she argued against the theory that consumer prices and satisfaction are the basis of antitrust law. Instead, it claimed that Amazon’s size, reach, and structural power also hurt consumers and competition, just as railroad companies did in the 1890s when the industry offered cheap prices but no choice.
Warren’s letter made many of the same points. She said the MGM deal was a way for the company to get cheap, kill the competition, and then take control of the market.
“Amazon’s tactic of operating at financial losses and using low prices to attract customers and enter the market has already proven its worth, and the FTC needs to determine whether this vertical acquisition is really an entertainment strategy or just another step towards fuller freedom Monopolization is, “wrote Senator.
It’s not the first time Sen. Warren has targeted Amazon. In her 2020 presidential campaign, she criticized the Seattle-based tech giant for allegedly evading federal taxes and pushed for a proposal to disband and regulate Amazon and other big tech companies.
We contacted Amazon for a comment and will update this story if we hear something. Read Sen. Warren’s letter in full below: