Amazon's treatment of merchants is one focus of an FTC antitrust inquiry.
A team of Federal Trade Commission investigators has begun interviewing small businesses that sell products on Amazon.com Inc. to determine whether the e-commerce giant is using its market power to hurt competition.
“Early in an investigation, that’s a sign of staff doing a serious job,” said Michael Kades, who spent 20 years at the FTC. “They’re spending lots of time with witnesses and trying to really understand what they’re saying.”Amazon hasn’t disclosed an investigation by the FTC, and the agency rarely confirms scrutiny of individual companies.
A key early task for the FTC is defining Amazon’s competitive universe. The company has long argued that it should be considered a retailer that competes against rivals online and offline, a designation that Amazon says gives it a meager 4% share of the U.S. retail market. If Amazon’s market is narrowly defined as online shopping, its share rises to almost 40% — giving it significant leverage. Narrowing the market by product category, such as electronic books, gives Amazon even more dominance.
The FTC’s interest in Amazon is spreading to sellers via word of mouth. Some merchants fear incurring Amazon’s wrath by cooperating with the agency. One who spoke with an FTC attorney said he was assured the conversation would be confidential unless it led to an official complaint against Amazon or the transcript was subpoenaed by Congress.
“I told them if Amazon suspends you, it’s like a death knell,” said Karnani, who has been selling on the site for two years. “I told them when Amazon shuts you off, they sit on your money for 90 days and there’s nothing you can do. They were surprised about that.”
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