Elizabeth Warren says Amazon-MGM deal requires ‘meticulous antitrust scrutiny’ in letter to FTC
In a letter sent to Federal Trade Commission Chair Lina Khan, Sen. Elizabeth Warren asserted that Amazon’s billion-dollar bid for MGM might harm consumers and extend Amazon’s market dominance beyond an acceptable level.
The letter, first published in The Verge, outlined the senator’s concerns about the online retail giant’s power in streaming and entertainment services with Prime Video in addition to its market dominance in other online areas and overall competitive voraciousness.
“Amazon’s massive presence in a host of retailing businesses creates conflicts of interest throughout its online marketplace ecosystem that may provide it with the incentive and ability to harm competitors in unexpected ways that a narrowly-focused antitrust analysis may not anticipate or reveal,” Warren wrote in the letter dated June 29 (read in full below).
“Therefore, the FTC should look beyond streaming and entertainment services and assess the possible competitive effects on customers, sellers, and workers across all of Amazon’s retailing segments when reviewing this transaction.”
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 characterized as unusual given the Department of Justice’s historic role in reviewing such prospective purchases or mergers.
But more concerning 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 in 2018 published “Amazon’s Antitrust Paradox” in the Yale Law Journal, a seminal paper that today is the underpinning of current proposed federal legislation to curb the reach of the tech giants, including Amazon.
In it, she argued against the theory that consumer prices and happiness are the bedrock of antitrust law. Instead, she asserted, that Amazon’s size, reach and structural power also creates harm to consumers and competition in the same way the railroad companies did during the 1890s when the industry offered cheap prices but no choices.
Warren’s letter made many of the same points. She said that the MGM deal is a way for the company to go cheap, kill competition and then control the market.
“Amazon’s tactic to operate at a financial loss and use low prices to lure in customers and capture the market has worked before, and the FTC must determine whether this vertical acquisition is truly an entertainment strategy or merely another step towards unfettered monopolization,” the Massachusetts senator wrote.
It’s not the first time Sen. Warren has taken aim at Amazon. On her 2020 presidential campaign she criticized the Seattle-based tech giant for allegedly skirting federal taxes and pushed a proposal to break up and more closely regulate Amazon and other Big Tech companies.
We’ve reached out to Amazon for comment and will update this story when we hear back. Read Sen. Warren’s letter in full below: