The Feds Take Big Tech to Court

The FTC launch a antitrust lawsuit against Amazon while the DOJ’s trial against Google is underway.

Lina Khan, Chair, Federal Trade Commission (FTC), speaking at a hearing of the House Judiciary committee at the U.S. Capitol. (Photo by Michael Brochstein/Sipa USA)(Sipa via AP Images)
Lina Khan, chair of the U.S. Federal Trade Commission, speaks at a hearing of the House Judiciary Committee at the U.S. Capitol, on July 13, 2023. Photo: Michael Brochstein/Sipa via AP

The U.S. Federal Trade Commission and 17 state attorneys general filed a antitrust lawsuit against Amazon on Tuesday. Meanwhile the U.S. Department of Justice’s trial against Google is shrouded in secrecy. This week on Deconstructed, we break down the antitrust lawsuits the federal government has brought against Google and Amazon, and the anticompetitive and monopolistic practices on trial. 

Ryan Grim is joined by Amanda Lewis, a partner at the law firm Cuneo, Gilbert, and LaDuca and co-founder of the Responsible Online Commerce Coalition. They are also joined by Matt Stoller, director of research at the American Economic Liberties Project and author of “Goliath: The 100-Year War Between Monopoly Power and Democracy.”

Ryan Grim: Welcome to Deconstructed. I’m Ryan Grim.

Earlier this week, the FTC, joined by 17 state attorneys general, launched a landmark suit against Amazon. Meanwhile, the Department of Justice is in its third — heading into its fourth — week in a trial against Google. Might be the biggest moment for antitrust in decades.

Today, I am joined by Matt Stoller, who is Director of Research at the American Economic Liberties Project, and also Amanda Lewis, who is a partner at the law firm of Cuneo, Gilbert, and Laduca. She’s also cofounder of what’s called the Responsible Online Commerce Coalition, which represents third-party sellers and others operating on Amazon.

Amanda and Matt, thank you so much for joining me.

Matt Stoller: Thanks for having me.

Amanda Lewis: Thank you. Great to be here.

RG: Amanda, let me start with you. Can you talk a little bit about what is in this Amazon lawsuit, and were there elements of it that pleasantly surprised you, or that you were disappointed in?

What is the FTC taking on when they’re taking on Amazon this time?

AL: Right. So, I was really, really pleased with the complaint. This is something that… The situation with Amazon and the anticompetitive conduct that the company has been engaged in, and in particular with respect to third-party sellers, and companies that rely on the platform for their entire economic livelihood, is something that the company absolutely needed to be held accountable for. The other really important thing here that is very front and center in the complaint, is the effect of the anticompetitive conduct; not just on these other businesses, which is critical and is important, but also the effect on consumers.

And so, while it seems like Amazon is offering the lowest prices to consumers, in effect, you have, basically, the invisible hand of Amazon that is setting prices at an artificially high level because they don’t allow sellers to offer their products on any competing platforms for a lower price. And if those sellers do so, they get punished.

RG: I saw something in the complaint about the buy button, and the exploitation of that. So, what does it look like? How does Amazon kind of discipline third-party sellers?

AL: So this used to be in black and white in the contract, in the agreement. That if you wanted to sell on Amazon, you had to agree not to offer a lower price elsewhere. The way that Amazon enforces its pricing policy now is, if you’re an Amazon seller and they find — Amazon tracks all the prices on other retailers and other channels — if they find that your product is available for a lower price somewhere else, they do what’s called “buy box suppression.” And that’s what you’re talking about with the buy box button.

And so, every day when — or, maybe not every day — but for people who shop on Amazon regularly, when you search for a product, there will come up a featured offer. And if you are not that featured offer, or showing up high on the list of search results, you basically don’t exist. So, the connection here is that, if Amazon finds that you have offered your product or your product is available for a lower price elsewhere, you cannot get the buy box. And it’s almost like you don’t exist. And so, you’re punished for offering a lower price to consumers.

RG: I want to come back in a second to how this also hurts consumers. But Matt, can you talk a little bit about how the Google trial has been unfolding, and how the fight against Google fits into this overall framework?

MS: Yeah. So, we’re in a really interesting moment. There’s a basic view, I think, since the financial crisis of 2008, that we have too-big-to-fail institutions that exist across the economy. And these are not just in the banking system, but they’re in everything from seeds and chemicals, to airlines, to search engines, to online shopping.

The terms and conditions by which we buy and sell things are set by a small number of people in corporate headquarters. And there are multiple important antitrust suits that are happening as a result of that. One of them has just filed this week, the Amazon suit, which is largely about how Amazon surreptitiously inflates prices in ways that consumers don’t necessarily see, but are very real nonetheless.

There are also a number of cases against Google, which is the gateway to the internet, and how Google manipulates and controls our access to the web to serve itself. So, that case was not filed this week; that case was filed in 2020, actually, under the Trump administration. The investigation started in 2019 and it is now, actually, in trial. I think we’re in third week or fourth week of trial, where the government is trying to prove that Google is a monopoly, that it has 90/95 percent of the search market, search ads market, and that it is illegally maintaining that monopoly by thwarting rivals that want to come into the market and offer a different search engine or a rival service.

And the case … I mean, antitrust cases are weird, because you have a judge, and the judge [makes] all the procedural determinations, but they also decide … Usually they’re bench trials, which means that you don’t have the jury. It’s not always the case, but usually it’s the case. And so, you’re just kind of guessing how this random person is thinking about it. But, in terms of the actual evidence that the government has put forward, it seems like it’s going pretty well.

So, the basic claim from the government is that Google has 90 percent of the search market, not because they are the best product, but because anywhere where you might access a rival search engine … Most people start to use a search engine when they buy their phone or they buy a computer, and they launch their browser, and they just search for something, and then a search engine just pops up that they start using, and they don’t think about it. And that is what’s called a default.

And Google pays. The most important partner is Apple, but it pays Samsung, Verizon, Mozilla, it owns Android which, a lot of cell phones use the Android operating system — it pays billions and billions of dollars to make sure that it is the default search engine [in] all of those places. And the goal that Google has in doing that is to make sure that rivals can’t get access to customers, and can’t get access to the data that customers generate. And that data is very important, because that’s what makes a search engine better.

And so, there’s all this evidence coming out showing that Microsoft was willing to pay a lot of money to get Bing to be the default and Apple wouldn’t consider it. Or Apple was considering starting its own search engine, but it was just making so much money from Google that Apple decided not to.

Or there are startups. There’s a startup called Branch, which made a search product that let you search your phone and all your apps for stuff, and Samsung wanted to embed branch in its own phones, because they thought, oh, this is a neat product, and it’s not a direct rival of general search, but it could kind of get there. And Google said to Samsung, you cannot embed Branch in your phone, because it’s a violation of our contract, which says that, essentially, Google is the exclusive provider of search services.

So this is what’s called “monopoly maintenance,” and it’s illegal if the judge accepts that this behavior is intended to thwart competition. It’s very similar to what Microsoft was doing in the 1990s; they were trying to destroy a rival browser producer, Netscape. They were also trying to [prevent] Sun Microsystems from putting middleware tools into the market, and the idea there was that Microsoft knew that Netscape could put a browser on top of an operating system and, ultimately, if they were able to do that, they could displace Microsoft Windows, and Microsoft didn’t want that to happen. It was a monopoly maintenance case.

And Microsoft lost that case, because what the judge determined, and what an appeals court upheld, is that they were thwarting competition, and that this was unlawful. And that’s basically the same thing that Google is doing here.

RG: And from a consumer perspective, it does just kind of feel that Google has gotten worse, just from a search perspective in the last couple of years. And I don’t have anything to back that up, just my own [feelings]. It just doesn’t seem like it’s getting better.

MS: We actually did some polling. About 40 percent of the public does think [similarly]. They’ve noticed there are more ads, it’s gotten worse. Fifty percent of the public is like, no, Google’s really good … But 40 percent is a substantial number, right? There’s a lot of people. It’s higher than I would have thought, but like, clearly there’s a market for a different search engine.

And, actually, 60 percent of people said in that poll that if Apple came out with a search engine, they would try it. So, there is demand for something different.

RG: So, Amanda, what are the consumer implications that you were talking about for Amazon’s behavior? Because a lot of people might think, well, too bad that they are destroying all these third-party sellers, but as long as prices stay low and things are OK for me, I’m not so concerned. But what are you seeing on the consumer side?

AL: Right. I think, first, it’s really important to think about the fact that third-party sellers are people. So, I think of the third-party sellers as somewhat a digital main street. These people are like your neighborhood, the old neighborhood stationery store, or various businesses, your neighbors, your families. So, just because it’s a link that shows up on the page on Amazon when you go to buy something, doesn’t mean that these aren’t real people with real businesses and real employees that depend on them.

RG: Yeah. In 2016 or 2017, a friend of mine and I launched a little tiny publishing house that we called “Strong Arm Press,” to try to fill a void that we saw. We thought there was a room for progressive books that were kind of short and punchy. And, you know, we were doing biographies of Trump cabinet officials and things like that. We launched a couple of bestsellers. Like, it was metrically a success, but Amazon basically walked away with all of the revenue.

The publishing house sort of still exists, but not really, because it’s just a volunteer effort at this point, because they owned everything. They owned the publishing entities, the tools, the selling, the printing, the distribution. And they just decided what they would take, and they decided they were going to take everything. So, yes, as a third-party seller — I’ll just put my bias out there — yeah, I witnessed it firsthand.

But sorry. Go ahead, Amanda.

AL: Yeah. 100 percent on that, and that’s another part of the case that we could talk about in a little bit, which are the fees, the increasing fees and extraction, squeezing of sellers that Amazon does. But for consumers, I’ll just give you an example, and there are a few examples that I’ve heard about firsthand from third-party sellers.

And so, in one example, someone has a product. They’re selling it on Amazon. They’re also selling it at a major online pet retailer. The pet retailer discounts their product, because they have a wholesale relationship with the pet retailer. What happens? Amazon finds this same product for a lower price, suppresses the buy box, and they start losing sales. Like, thousands of dollars of sales, every day.

So, what do they say? They go back to the pet retailer, the online store, and they say, please stop discounting my product. Basically, they’re saying, you have to keep the price of my product high, or I’m getting killed on Amazon. So, repeatedly, these conversations can go on, but the online pet store says, “not my problem.” And the ultimate result is, then, usually or sometimes at least, the third-party seller has to actually pull their product from anywhere outside of Amazon, because they can’t control the pricing in these other retailers, because of the fear that that product is going to be offered for a lower price elsewhere and that they’re going to get punished by Amazon.

Then it all becomes self-reinforcing. And you see a trend here that, then, you can only get that product on Amazon. Under antitrust law, the ultimate price increase is where you can’t access something, where a store shuts down or a product is not available somewhere. So, that’s how extreme the situation is.

RG: And so, Matt, back in 2017 I think it was, Lina Khan, who’s now FTC chair, published this kind of landmark law review article about Amazon that became something of a phenom. Now, just six years later, here she is in court against Amazon.

What is the relationship between the arguments that she made there and this case?

MS: So, that paper she wrote, that paper was about how Amazon acquired its market power, and it did it through something called predatory pricing. Which is to say, it charged below cost to drive its rivals out of the market, and that used to be illegal. What Khan’s paper said is, it’s no longer illegal, therefore you have companies like Amazon.

Well, why would you intentionally lose money to acquire the market? Obviously because, later on, in different ways you’re going to raise prices to make the money back, right? And predatory pricing was made almost unenforceable, the Supreme Court made it almost unenforceable.

This case is six years later, and Amazon is now a monopoly, and they are raising prices. And so, this case is not about how Amazon acquired its monopoly; this case is about how Amazon is maintaining and then exploiting its monopoly.

So, one way to understand it is, Amazon Prime is essentially a scam, right? You don’t see that, right? But what is going on here is that 60 percent of the products sold on Amazon, when you click on Amazon, you want to buy something sold by a third party, right? And then Amazon charges those third parties about 50 percent of their revenue to list on Amazon for their logistics and everything like that. To sell on Amazon, you have to pay one out of every two dollars.

And then Amazon takes that money and pays for, quote-unquote, “free shipping.” They also pay for Amazon Prime video services, Twitch, audio; all that’s about $130 to $140 billion that they’re charging to third-party merchants. That’s coming out of your pocket, right? Because those third-party merchants have to raise prices pretty dramatically to kick that money back to Amazon.

You would think, OK, well, if you have to charge ten bucks on Amazon but you could charge six bucks elsewhere, why isn’t the web full of ads being like, “buy cheaper on Walmart, or buy cheaper direct for this widget you want?” Well, the reason is because Amazon, as Amanda was saying, has these anti-discounting measures. And it’s as if you can sell on Amazon for our high price, which includes quote-unquote “free shipping,” although nothing really is free, there’s no such thing as a free lunch.

Or you can sell off of Amazon. And if you sell off of Amazon, that’s 60, 70, 80 percent of the customers, they’re not going to see you, because most people shop on Amazon.

So, that’s essentially the argument of this case. Khan said it was about predatory pricing. Predatory pricing is not an element here. However, the paper also talked about this thing called vertical integration, which is, basically, a company owning a bunch of different lines of business and then integrating them in a way that disadvantages rivals.

And it is something that is going on here, because the way that Amazon raises its prices is by doing things like saying, alright, If you want to get access to Amazon customers, you have to use our logistic service, Fulfillment by Amazon, and that costs a bunch of money. Oh, and by the way, you also have to advertise on Amazon, and they get about $30 billion through advertising.

And so, what the net effect is, as a consumer, you put “batteries” into Amazon, and most of the links that you see are sponsored links, although you can’t really tell, because “sponsored” is written in really, really small language or really small font, and those are often more expensive or worse quality.

But from the perspective of the seller, as you put it, all the revenue or all the margin is being taken by Amazon, and that is a function of vertical integration. So, it is in part drawn from Khan’s paper. It’s mostly, though, [a series of] new things that Amazon has been doing to exploit the monopoly that Khan described how they acquired.

So, I don’t know if that makes sense, but I think there’s also one other element here when you’re talking about that paper and the relationship to the case. You know, Lina Khan is a very important person, she’s the chair of the Federal Trade Commission, but the Federal Trade Commission and 17 states brought this case.

This is not like Lina Khan wrote a complaint and brought the case. This is three commissioners; Alvaro Bedoya, Becca Kelly Slaughter, and Lina Khan voted out this complaint, which was written by probably dozens of people who were involved in the investigation. And then there were 17 state attorneys general and all their staff, and they all had to agree on a case to bring.

And so, that’s what this is. This is not about one person. This is about an argument of how we run our society. And should it be run, should pricing in terms and worker salaries and all the rest of it be set by a small group of people in Seattle over the whole online retail sector? And then Google for search, and Walmart, and airlines, and Ticketmaster, and so on and so forth. Or should it be done through a competitive open market and public rules?

And that’s the relationship, the paper. And then, kind of behind that, the ideological debate over whether that paper is the case.

RG: Amanda, this isn’t the first pressure that’s been applied to Amazon. How have they adapted to the political efforts to investigate them and rein them in before?  

AL: Right, you’re absolutely correct. While I was at the Federal Trade Commission as a staff attorney, I was on detail to Congress to the House Judiciary Committee. I was a counsel detailee when Lina Khan was a counsel on the subcommittee. And we worked with Slade Bond, who was the chief counsel, and several other people on the committee to conduct a digital markets investigation that was focused on Amazon, Google, Facebook, and Apple.

So, Amazon was a focus of that investigation, and I have to say they stood out as one of the least cooperative companies of all four. They don’t respond well to scrutiny, they’re not very cooperative. This was alluded to in the complaint as well that it seems like the company is very comfortable. In the case of the House Judiciary Committee investigation, there was actually a perjury referral for one of Amazon’s executives that testified before Congress and misled Congress.

RG: What was the upshot of that? Is that still alive?

AL: So, once a perjury referral goes to the Department of Justice — and it was also a bipartisan referral — then it’s up to the Department of Justice whether they want to pursue it. There is a fairly high standard for proving perjury, and I don’t have any insight into what happened after we sent that over, but I imagine…

MS: The DOJ sucks. Let’s be honest. Like, the DOJ’s shitty. I mean, it’s true. The government is not functional except for the antitrust agencies. It’s embarrassing.

And why is there all this fraud, why is there all this corporate crime? I love what the antitrust enforcers are doing, but the rest of the government is not functional.

One of the things in this complaint is, they were lying to the FTC. They were lying to the FTC a few years ago in a case the FTC brought on Amazon Prime and deceptive advertising. We have a lawlessness problem in this country with regards to large corporations, and like, we need somebody to put some damn handcuffs on someone. And the FTC can’t do it; they don’t have criminal authority and they don’t handle perjury complaints. And the antitrust division doesn’t handle criminal complaints on … They handle criminal antitrust complaints, but not things like perjury.

Like, we have a real problem with the rule of law. And I’m the biggest cheerleader of antitrust cases, but we have a problem with other areas of the Department of Justice and other parts of the government. I don’t know if the judges would accept a perjury claim like this. I don’t know if Congress would. But, certainly, Amazon executives would notice if they actually got some damn handcuffs.

I don’t want to go on a rant because I’m really mad about this, but we have a problem with the rule of law, and we have to do more than just what the FTC and DOJ are doing, the antitrust division are doing.

RG: Even in the case of Google that’s in trial right now, you’ve had this remarkable, kind of bizarrely unfolding situation where you do finally have the DOJ taking on this major company. At the same time, there’s a strange amount of respect on display that a typical defendant would not get from a typical prosecutor. Google has been able to muzzle most of this trial.

Matt, can you talk a little bit about why we haven’t heard a lot about it?

MS: Yeah. I mean, Google has been saying … Amanda can probably talk about the redactions in the Amazon complaint, but in the Google trial, there’s a judge named Amit Mehta, that’s the judge who’s overseeing it, and he said very explicitly, I’m just a judge, I’m not a business person, and I’m going to defer to you guys on — talking to Google — on what kind of information is competitively sensitive, and make sure that… I don’t want to hurt your business.

Which might sound reasonable if you’re just, like, a guy. But if you’re a judge, that’s crazy. Like, that’s a real problem, because these trials are supposed to be public, right? Google gets better privacy, they get more protection from a judge over their normal business behavior than, like, a sexual assault victim would get in a court, right? Like, it’s totally insane. They get to hide.

Everyone knows Apple pays Google huge amounts of money for the default search engine placement, right? Whether it’s 12 billion or 8 billion or 20 billion, we don’t know the exact number, but we know there’s a number, and it’s always redacted. And that’s totally insane. Like, that’s crazy. Why is that? Why are these numbers just redacted?

And so, the judge is deferential, but so is the DOJ. The DOJ trial team is like, they’re not pushing particularly hard for public access to these numbers, and this is something that has to change.

Fortunately, a number of newspapers have done stories, we’ve been pushing for it. And the judge is now, actually … It’s funny, the DOJ and the judge are kind of blaming each other for things that are in closed session, or hiding things. And so, they’ve actually started to hear the criticism, and the judge was like, look, the CEO of Microsoft is testifying on Monday, I want as much of it to be in public as possible.

So it’s like, I don’t want to allege bad faith here. I think the judge and the DOJ didn’t know that people were actually really interested in this, but we do have this problem with this excessive deference to corporate secrecy. Very different than it was 25 years ago with Microsoft, when it was front page news every day. The judge unsealed not just the trial, but over a hundred depositions, which are the extra interviews you do with industry participants outside of a trial. You know, there were 20 hours of videotaped deposition of Bill Gates which you can watch on YouTube because the judge unsealed it.

The public record is super important here, and we’re not getting enough of a public record in the Google trial, but hopefully — because we haven’t done a big monopolization case in 25 years — but hopefully the exposure of the fact that it is super secretive … And that’s crazy. Because, apparently, Google does care about its own privacy.

But it’s crazy. And I think people in the judiciary are actually hearing that, and they may be open to making things more public going forward.

RG: And Amanda, how’s the Amazon case look on that front?

AL: Yeah. So, if you’ve looked at the complaint, there are, unfortunately, a significant number of redactions. My understanding is that the FTC is working to push as much as they can to get at least some of those redactions lifted, so I think it’s a little bit of a “stay tuned” on that. And then we’ll also have to see how the judge ultimately deals with it.

And going back to what Matt said about how it’s a little bit crazy that you do have this one individual with so much power deciding who can see what the members, what the public and the media has access to in these historic and really important trials. It is a little disconcerting that these decisions are left to the whim of a single person, a judge, in this case.

One thing that I wanted to point out is something that’s interesting and maybe not surprising with these companies — at least I’ve seen it with Amazon — is they are very protective of their own confidential information, but when it comes to third parties, maybe smaller businesses who are having no choice but to participate in these cases because they’ve been subpoenaed … Well, when it comes to those people, Amazon wants the names of those people, and the details of their business to be public.

And so, isn’t that double standard interesting?

MS: Sorry, I just want to say, there’s this sort of a funny story when … Not like, funny, “ha-ha,” but more like “funny, WTF.”

Apple, essentially in collusion with Google over controlling the search market, they actually pre-briefed reporters on what their executive was going to say. And there were a bunch of stories — one in The Wall Street Journal, one in Bloomberg — here’s what the Apple executive is going to testify to. And then they demanded that the testimony be sealed, enclosed.

So it was like, there were these articles about what he was going to say, and then it was all closed session. I mean that’s like …

RG: May or may not have said that, even.

MS: Yeah. I mean, it’s like, what? Like, this is a clown show.

I think what is exciting about this moment is that … You know, I talked to a bunch of judges now, and they’re new to this, right? They’re new to antitrust, they’re new to public interest in some of these kinds of corporate litigation. I’ve been to some antitrust trials, and I’ve been to some that are well-attended and others that aren’t. Those judges are surprised that there’s public interest in these trials, and they act differently when they realize, oh, the public is interested in this stuff.

So, they’re like, oh, this is something I should learn about, I shouldn’t just be dismissive because I learned these stupid theories in the 80s and I’m going to dismiss these things now. So, it’s kind of like a cool moment to see this wave of populist anger turned into legal arguments.

The work that Amanda and Slade did investigating in Congress, that’s turned into these legal arguments which are now hitting the courts. And the judges are being kind of bad, but they don’t know any better, and now they’re kind of learning.

And so, it looks kind of annoying and conspiratorial, but I think it’s actually a lot of positive movement in the courts.

RG: And, to finish, I’m curious for both of your takes on this — and maybe Matt, you could go first — if you were the judge here, and you can issue a ruling, what does — we could do both Google and Amazon — what should happen to these companies? What would be proper antitrust policy?

MS: Well, first of all, if I were the judge in the Google case, I would sanction Google, and sanction their lawyers really hard for destroying documents. Who said they could talk about antitrust with the chat, the autodelete on. The CEO of Google said that, right?

I would really go hard and say, this is unlawful behavior. When there is a litigation hold, you cannot shred documents. You just can’t do it, right? And whether you’re shredding documents digitally or not, no, not OK. And it’s very important to do that, just procedurally, that’s what I would do.

I would also try to make things as public as possible. I would say, unless there’s a good reason, the data, everything is public, right? If you cannot show me direct harm that unveiling this will cause, it’s public. Including depositions. And maybe not for smaller companies who could fear retaliation from dominant firms, but there’s really no reason that Google and Apple have to claim trade secrets on anything but very, very, very specific stuff that might be trade secrets. Like, that’s just the way that things work.

Your dirty laundry, just because it’s embarrassing, doesn’t stay private. If you don’t want to be exposed in a trial, don’t violate the antitrust laws, right? Or don’t come close to it.

And then I would also, in terms of the ruling, I think you could imagine … I think the evidence from the government has been fairly persuasive. Not just the evidence from the government that they’ve presented, but you have to really weigh the evidence that’s been deleted, right? And so, you have to assume that there’s a lot more there that you never get to hear, because it was destroyed.

So, the actual destruction of the evidence should be a strong factor in assuming bad faith from the company, and assuming law breaking. It’s a little bit like the income tax violation for Al Capone, right? When you delete the evidence, that’s pretty compelling evidence that you were doing something wrong, so I would take that strongly into account.

And then the remedy, you know, then you have to have a separate trial for the remedy. But the same problems are going to emerge with that trial, which is that evidence has been deleted.

And the thing is, there is another trial in Virginia against Google, where Google has been screwing around the same way they have in D.C., but the judge in Virginia is not having it. She’s just like, oh, you made a discovery error? Fuck you, fix it. And so, Google literally had to hire a thousand contract attorneys, which are really expensive, to go through millions of documents because they screwed up in discovery. And the judge is not trying to split the baby. She’s just like, you screwed up, you fix it.

And that’s the way that you actually have to deal with these big corporations. Otherwise, they’ll just … You know, they have more information than everybody, and they’ll just run circles around you.

RG: And Amanda, when it comes to Amazon, if, let’s say, Amazon does get found guilty of this, what should be the remedy?

AL: That’s a really good question, and an important one. So, if this conduct is found to violate antitrust law, you can either have a behavioral remedy, which would basically say: Amazon, you cannot have these pricing policies, you cannot have these anti-discount rules. That’s the very minimum of what should be done.

On the other hand, you can go further. The court does have the power to go much further, and actually require a divestiture, and say that there is actually just an inherent conflict here. If Amazon is going to run the platform, they can’t also compete on it, and self-preference, and engage in all of the unsavory conduct and potentially illegal conduct that is discussed in the complaint.

Courts are fairly unlikely and skittish to order a breakup or a divestiture. But I have to say, what’s difficult is, if you only end up with a prohibition on the conduct … Amazon has a history of sort of shapeshifting their anti-competitive policies. And you also can think of it sort of like a balloon; if amazon has this monopoly power and you push it in one place, or a waterbed, it’s going to just move somewhere else. They’re just going to find somewhere else to extract these monopoly rents and to exercise this monopoly power that they have in a way that’s going to be harmful to third-party sellers and consumers.

I am someone who, probably not surprisingly, also thinks that we need legislation. So, regardless of what happens here, by the time the remedy gets put into place, and it’s very important that the case is brought, but it will likely be ten years before any appeals are exhausted and there’s actually a remedy put into place. And so, I think we also need to really continue to push on the legislative front.

Not that Congress is particularly impressive in getting things done quickly, but I do think it’s really important to have a dual track and be pushing as hard as we can on both fronts to address these critical problems with not just Amazon, but Google, Facebook, and Apple. We’re in a situation that we are not seeing innovation or disruption coming from U.S. companies. Where do we see the newest entrant in social media? TikTok.

So, for everyone who said, oh, we can’t change our laws and we can’t change our policies, because everything’s working so great, and we have the best tech companies in the whole world, and we’re the only ones who innovate. Well, look around. That’s not true. That’s not the future, as long as we allow these monopolies to continue to build the moats, and maintain and extend their monopoly power.

RG: Amanda, thank you. Matt, you’ve often got a last word. Do you have any last words you want to sum up on, or are you wrapped up?

MS: Yeah. I think that, to Amanda’s point, I think we need … This has been the most extraordinary month of antitrust action in 50 years, right? The DOJ has this Google trial, the FTC brought a case against Amazon. They also brought a case against a private equity healthcare rollup in anesthesiologists in Texas, which is upsetting everyone in private equity and healthcare. They did something important on pharmaceutical patents on what’s called the Orange Book, which is technocratic but important. The DOJ brought a huge case on price fixing in the meat industry in poultry, pork, and chicken.

The number of cases, the amount of activity is just, I think, extraordinary, and really positive, in terms of our ability to actually get control of our corporations and our markets. I think one thing to keep in mind is there are a lot of procedural problems, right? Like, this case was filed in 2020, and it’s just getting to trial in late 2023. The Facebook case was filed in 2020, it’s going to go to court next year. They have to go on appeal, right? It takes time.

But Amazon is constraining its behavior now. They’re starting to treat sellers a little bit better. Not well, but some of the people who are very upset are like, this isn’t enough, but we are getting treated a little bit better. And what’s starting to happen is, you know, a seller just came out the other day and was like, I wanted to charge five cents less on another site and I got penalized by Amazon, and sellers are going to come out and start saying that.

The expression that someone once made is, “the trial is the remedy,” and I think that’s really important. The public exposure of these practices really matters, right? Beyond just the ultimate resolution and remedy. The public exposure does matter, and it does have significant impacts. It will influence Congress, it will influence state legislators. It will influence how people within Amazon think. It will influence how unions who are trying to organize Amazon approach their strategy.

This is a bigger game than just, like, who wins this narrow court battle and how long it takes. So it’s very positive. There’s not a lot going well right now in our society, but this is one area that I think is.

RG: Well, Matt, thank you for joining me.

MS: Thanks for having me.

RG: And Amanda, thank you for joining me. Really appreciate it.

AL: Thank you.

RG: That was Amanda Lewis and Matt Stoller, and that’s our show.

Deconstructed is a production of The Intercept. Our producer is José Olivares. Our supervising producer is Laura Flynn. The show is mixed by Sharif Youssef. Legal Review by David Bralow. Leonardo Faierman transcribed this episode. Our theme music was composed by Bart Warshaw. Roger Hodge is The Intercept’s Editor-in-Chief. And I’m Ryan Grim, D.C. Bureau Chief of The Intercept.

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