Amazon: The Antitrust Case

Name: Amazon: The Antitrust Case
SKU: W39820_P

Ning Su, Claire Liu

Product #:W39820_P

Supplier:Ivey

Discipline:Economics & Public Policy, Information Systems

Setting:2024

Details:Case (PDF) • 5 pages • 2024-11-13

Subjects:

Antitrust laws Environmental regulation Business law Government policy and regulation Technology and analytics Economics Information systems

Industries:

Information technology and telecom sector

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$9.71

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The case of Federal Trade Commission (FTC) versus Amazon.com Inc. (Amazon) revolved around allegations of anti-competitive practices and monopolistic behaviour by the tech giant. Amazon, with its diverse portfolio of services and dominant market position in online retail, faced accusations related to its bundling of “Fulfillment by Amazon” with Prime Eligibility and its price parity rules for third-party sellers. The FTC claimed that Amazon’s bundling strategy stifled competition by compelling sellers to use its fulfillment services, thus limiting their choices and potentially driving up prices for consumers. Additionally, Amazon’s price parity rules allegedly restricted sellers from offering lower prices on other platforms, potentially leading to artificially inflated prices across all channels. However, Amazon argued that these practices were essential for maintaining service quality, preventing showrooming, and protecting its brand reputation. The company would have to evaluate the validity of the FTC’s claims and determine the best course of action in response to the lawsuit.

Learning Objectives

This case can be adapted and used in case discussions for undergraduate- and graduate-level courses on digital strategy, decision-making and risk management, corporate strategy, and digital platforms. Working through the case and assignment questions will give students the opportunity to do the following:

Assess antitrust policies and how they apply to digital platforms such as Amazon.
Explore the concept of monopoly power in the digital age and its implications for competition and consumer welfare.
Develop an understanding of Amazon’s major business strategies, such as bundling services and enforcing price parity, and assess their impact on competition and consumers.
Gain an overview of the regulatory challenges faced by governments and regulatory bodies in addressing antitrust issues in the digital economy.