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Amazon accuses FTC of harassing Bezos in ‘burdensome’ probe

Aug. 16, 2022 Updated Tue., Aug. 16, 2022 at 10:02 a.m.

Amazon founder Jeff Bezos announces Blue Moon, a lunar landing vehicle, during an event in Washington, D.C., on May 9, 2019.  (Tribune News Service )
Amazon founder Jeff Bezos announces Blue Moon, a lunar landing vehicle, during an event in Washington, D.C., on May 9, 2019. (Tribune News Service )
By Emily Birnbaum Bloomberg

Amazon.com accused the Federal Trade Commission of harassing its founder Jeff Bezos and the company’s Chief Executive Officer Andy Jassy as it probes the e-commerce giant’s business practices.

In a filing made public on Monday, Amazon claimed that FTC staff have made “unduly burdensome” demands as the agency investigates whether the company’s subscription services, including Amazon Prime, violate consumer protection laws.

The online retailer is seeking to quash or limit the FTC’s most recent civil investigative demands, which are similar to subpoenas.

Amazon said the FTC’s requests are “unworkable for Amazon to discern the information staff demands and to respond in the timeframe allowed.”

The FTC, which has both antitrust and consumer protection mandates, has been investigating Amazon for potential anticompetitive conduct for several years.

The filing offers an unusually public glimpse into the ongoing struggle between one of the world’s biggest companies and one of its regulators.

FTC Chair Lina Khan, who took over the position in June 2021, has escalated the investigation, shaking up the team, re-interviewing potential witnesses and asking questions about the company’s recent acquisition of MGM Studios, Bloomberg reported in May.

The FTC declined to comment.

Amazon has taken a particularly antagonistic approach as it faces scrutiny from the FTC, said Maurice Stucke, a former prosecutor in the Justice Department’s antitrust division who now teaches law at the University of Tennessee.

Stucke pointed out that Amazon previously attempted to force Khan to recuse herself from the Amazon investigation altogether.

“Generally, this approach over the long run is not workable,” said Stucke, comparing Amazon’s approach to Microsoft’s stance in the 1990s as it faced antitrust scrutiny from the Justice Department. “The day of reckoning for Amazon is coming.”

Microsoft was “very confrontational” when it first began battling the government in the 1990s, but “ultimately, they relented,” said Stucke.

Microsoft appealed after losing at trial and the case was settled in 2001.

The Biden administration has stepped up antitrust enforcement as a keystone of its economic policy, seeking to reverse what antitrust officials view as decades of lax oversight over corporate consolidation and market power.

The FTC served individual information demands to 20 current and former Amazon employees at their homes in June, according to the filing.

Bezos and Jassy are also petitioning to quash the FTC requests directed at them, arguing that the commission could obtain the same information from the documents and testimony that company executives have already offered.

The FTC will be required to respond to Amazon’s allegations over the next few months. Then the commission will hand down a ruling about how to move forward.

Amazon in the filing said it has been cooperating with the FTC’s investigation into Amazon Prime since March of last year.

The company said it so far has provided over 37,000 pages of documents.

Staff have been given a deadline of this fall to make a recommendation to the commission. Amazon is represented by Covington & Burling LLP.

The FTC staff fell silent for months until the commission again escalated the probe in April, according to the filing.

Amazon is seeking to narrow the FTC’s follow-up request from June, which the company described as “extraordinarily broad,” including questions about Amazon Prime as well as Audible, Amazon Music and Kindle Unlimited.

The FTC had demanded responses by Aug. 1.

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