In win for Chair Lina Khan, judge rules FTC can proceed with its antitrust claims against Amazon

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A federal judge has ruled that the Federal Trade Commission can proceed with its case that Amazon operates as an illegal monopoly, handing agency chair Lina Khan a preliminary win in her legal campaign to rein in the power of Big Tech companies.

In a sealed order on Monday, U.S. District Judge John Chun delivered a blow to Amazon’s months-long efforts to have the agency’s landmark case dismissed, according to two people familiar with the ruling, who spoke on the condition of anonymity to discuss the nonpublic document. The court is expected to unseal the order later this month.

The FTC and the attorneys general of 18 states and Puerto Rico allege in the case that the company abused its dominance in the market to squeeze merchants and crush rivals, resulting in higher prices and lower-quality goods for American shoppers.

The Seattle-based judge permitted the agency’s claims that the company violated federal antitrust and competition laws to move forward, while tossing some of the claims brought by state attorneys general about alleged breaches of state laws. The judge did allow the states’ claims that the company violated federal laws to proceed, said the people, who described the order to The Washington Post.

The Post exclusively obtained details of the order as some of the company’s supporters were celebrating Tuesday, saying that the partial dismissal was a victory for Amazon or a “big deal,” without knowing which parts had been dismissed. (Amazon founder Jeff Bezos owns The Washington Post.)

The case, initially filed in September 2023, is widely watched as a bellwether of regulators’ efforts to thwart Silicon Valley’s allegedly monopolistic practices. The FTC is battling Amazon and Meta in court – while the Justice Department takes on Google and Apple – over alleged violations of antitrust laws, testing whether century-old competition polices can address the practices of the world’s most valuable internet companies.

For Khan, the Amazon case has a signal importance. Her rapid ascent to the helm of the FTC followed the national attention she received after writing a paper titled “Amazon’s Antitrust Paradox” in law school. The paper and her subsequent work on alleged monopoly power in the tech sector made her an avatar of the “hipster antitrust” movement, which pushes for more creative and legally risky applications of competition law.

The case also marks the biggest legal test to date for Amazon’s 30-year-old e-commerce business. In its December motion, the Seattle-based company called for the dismissal of the FTC and states’ suit in its entirety. Amazon has denied the FTC’s claims, saying its prices are competitive and merely match those of its rivals.

Amazon declined to comment.

The judge also granted the FTC’s request that the case be bifurcated into a phase focused on the company’s liability and a second on potential remedies, the people said.

Regulators recently scored a victory when the U.S. District Court for the District of Columbia found that Google operates its search engine as an illegal monopoly. But Judge Amit P. Mehta will not decide until next summer on a remedy, which could possibly extend to a breakup of the company. That case, originally brought under the Trump administration in October 2020, is an example for how antitrust cases often take many years to resolve.