POLITICO Nightly: Amazon’s long, expensive antitrust fight just began

 

BY JOSH SISCO Presented by Federal Trade Commission Chair Lina Khan speaks at the American Bar Association Antitrust Law Spring Meeting at the Marriott Marquis in Washington, D.C., March 31, 2023. | Francis Chung/POLITICO CATEGORY KILLER — After a more than four-year wait, we finally have a look at the government’s anti-monopoly lawsuit against Amazon. The Federal Trade Commission, led by antitrust hawk Lina Khan, is accusing the e-commerce behemoth of stymieing competition to rip off sellers and consumers, all the while peddling a subpar shopping experience riddled with confusing advertisements. It stands in stark contrast to the version of itself Amazon pushes to the public: a cheap, convenient way for the public to shop and a gateway to millions of valuable consumers for businesses around the world. The case challenges a host of Amazon’s business practices, including rules that the FTC says block lower prices on competing websites and policies the FTC believes force merchants to use Amazon’s logistics and advertising services. In a statement , Amazon called the case “misguided,” saying it would “force Amazon to engage in practices that actually harm consumers and the many businesses that sell in our store.” The outcome is years away. Federal courts move glacially slow, especially with complex cases like this involving myriad witnesses and terabytes of data. If it does go to trial, expect some high-profile moments, like Amazon founder Jeff Bezos on the witness stand. But based on timelines for similar ongoing cases against Google and Meta, we shouldn’t hold our breath. Absent an unlikely settlement we’re looking at a resolution likely hovering around 2030. The Justice Department is in the middle of a 10-week trial against Google accusing it of illegally monopolizing the market for online search. The case was filed in 2020. So what happens now? In short, a lot of mundane, and expensive legal posturing. But one open question is how this affects Amazon’s business in the meantime. After all, the Justice Department’s antitrust case against Microsoft some 25 years ago — the last case of this kind against a high-powered tech company to go to court prior to the Google trial — is widely believed to have slowed down the software giant, paving the way for the next generation of internet companies. Will Amazon meet the same fate? “I strongly suspect the Microsoft case was studied deeply and carefully by all of the major tech platforms and they are endeavoring to not make the mistake of slowing down because of regulatory oversight,” said Paul Gallant, managing director of the Washington Research Group at the investment bank TD Cowen. And Ian Tang, an analyst with the policy and financial research firm Capstone, pointed to Amazon’s aggressive acquisition strategy during the pendency of the FTC’s investigation as evidence that it will take more than just a lawsuit to constrain the company’s conduct. The company has acquired MGM Studios and the healthcare company One Medical, both of which were subject to lengthy FTC probes. It is currently working to buy robot vacuum maker iRobot, and POLITICO previously reported the FTC is concerned the deal is anticompetitive. Investigations are ongoing in the U.S. and EU. The FTC is not commenting on what it hopes to achieve, with Khan saying publicly that the agency is currently working to prove Amazon violated the antitrust laws. Still, if it succeeds, all options are on the table, including a break up of Amazon’s business. While the lawsuit alone is unlikely to change much, we might not need to wait for things to fully play out, according to lawyer Gary Reback, who was instrumental in pushing the DOJ to sue Microsoft in the late 1990s. “It was the trial that ended up constraining Microsoft as much as the complaint or remedy,” said Reback, referring to the settlement that ultimately ended the lawsuit and blocked Microsoft from discriminating against competing web browsers. “How this presents to the public, what the public comes to understand, is the greatest risk to Amazon, even greater than any remedy,” Reback said. “If the public loses faith in Amazon, that’s the biggest risk.” And the public opinion pivots on public access to the case. The Microsoft trial was covered every day for months by most mainstream media outlets, and evidence including video of the famous deposition of a petulant Bill Gates, the founder and former CEO of the company, pushed the public to see not an innovative genius, but an evil corporate mastermind. In contrast, much of the Google trial has been closed to the press and public . For the Amazon case to really have an impact it must be open, Reback said. So far that’s not the case. At least a third of the 172-page complaint is redacted, though more will be made public as the litigation progresses. “Historically, transparency and sunlight were a really critical tool for the public when going up against monopolies and concentrated economic power,” Khan, the FTC chair, said at a POLITICO event on Wednesday. “As we go through this, we’ll be keen to be pushing for as much public access as we can.” Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at jsisco@politico.com or on X (formerly known as Twitter) at @joshua_sisco .   A message from Meta: Trained in the metaverse. Serving real patients. Across the world, millions go blind due to lack of access to eye care. To help, FundamentalVR and Orbis International deploy cataract surgery training in the metaverse. With this virtual reality tool, surgeons everywhere can practice as many times as needed before working with real patients. Explore the impact.   WHAT'D I MISS? — House impeachment inquiry off to an awkward start: House Republicans today took their latest step toward a historic impeachment of President Joe Biden — and immediately ran into setbacks with their witnesses . During the House Oversight Committee’s first impeachment-related hearing since Speaker Kevin McCarthy formally launched an inquiry into Biden, multiple witnesses called by the majority undercut the GOP’s core message against Biden. One of the GOP witnesses, Jonathan Turley, told the committee that he did not believe “that the current evidence would support articles of impeachment.” The inquiry, he said, was fair game. — GOP senators rough up Pentagon nominee over Afghanistan evacuation: Republican senators tore into President Joe Biden’s nominee to be the Pentagon’s policy chief today over the role he played in the Afghanistan evacuation when he was a State Department official . During Derek Chollet’s confirmation hearing to be the undersecretary of Defense for policy before the Senate Armed Services Committee, Sen. Markwayne Mullin (R-Okla.) called out what he characterized as the State Department’s failure to evacuate American citizens during and after the withdrawal. Chollet has been nominated to replace Colin Kahl as the top official advising the Pentagon chief on all matters related to policymaking. — Manchin snarls top VA nominee over abortion: Sen. Joe Manchin has stalled President Joe Biden’s nominee to serve as the VA’s general counsel for more than a year to pressure the agency to stop providing abortions , two people familiar with the matter told POLITICO. Manchin (D-W.Va.) has joined Republicans on the Veterans’ Affairs Committee in blocking Anjali Chaturvedi, a top Department of Justice lawyer, over the agency’s policy allowing it to provide abortion counseling and some abortions. The VA last fall finalized the policy, which enables it to provide the procedure when the life or health of a veteran or beneficiary is in peril, or in cases of rape or incest. The policy also covers dependents. But Manchin and Republicans cite federal laws, including a 1992 law that prohibits the government from providing abortion care for military veterans, to say the agency has overstepped its authority.   Enter the “room where it happens”, where global power players shape policy and politics, with Power Play. POLITICO’s brand-new podcast will host conversations with the leaders and power players shaping the biggest ideas and driving the global conversations, moderated by award-winning journalist Anne McElvoy. Sign up today to be notified of the first episodes in September – click here .     NIGHTLY ROAD TO 2024 Florida Gov. Ron DeSantis speaks to the press in the spin room after the second 2024 Republican presidential primary debate at the Ronald Reagan Presidential Library in Simi Valley, Calif., on Sept. 27, 2023. | Philip Cheung for POLITICO ATTACK MODE — Fresh off the second Republican presidential debate, Ron DeSantis is going into attack mode , POLITICO reports. The morning after the debate, the Florida governor took issue with President Joe Biden’s new campaign ad that spliced together snippets of DeSantis’ debate performance in which he called out former President Donald Trump for his absence on the debate stages. It ends with Biden saying he approves this message. DeSantis clapped back on X, formerly known as Twitter: “When I’m the nominee, I’ll make you climb out of your basement, accept responsibility, and defend your failed record, @JoeBiden.” DeSantis also had his sights on Trump, digging even further into Trump’s absence on the debate stage by saying in a Fox News interview that Trump should “defend why is he running on the same program in 2016 that he did not actually implement.” THE YOUNGKIN OPTION — Some of the biggest Republican donors in the country will converge next month at the historic Cavalier Hotel in Virginia Beach for a two-day meeting to rally behind Gov. Glenn Youngkin, the Washington Post reports. The closed gathering, named the “Red Vest Retreat” after the fleece Youngkin wore during his 2021 campaign, will begin Oct. 17 and be focused, officially, on the Republican effort to win full control of the General Assembly in Virginia’s upcoming elections. But unofficially, several donors tell me, it will be an opportunity for them to try to push, if not shove, Youngkin into the Republican presidential race. Others say they will be busy prodding Youngkin and his allies in phone calls from afar. “He appears to be leaving the door open,” Thomas Peterffy, a billionaire who has already given millions of dollars to Youngkin’s PAC, told me this week. “And if Republicans win in Virginia, maybe we can talk him into it. He obviously wants to see what emerges, what the state of play is. 2024 LIVE STREAM — On Friday morning, Rep. Ro Khanna (D-Calif.) will kick off a four-hour live stream from a Washington rooftop overlooking the White House with some of the biggest political Twitch and YouTube live-streamers , reports the Washington Post. The creators include Clara Sorrenti, known online as Keffals; Steven Bonnell, known online as Destiny; and Ian Kochinski, known online as Vaush. The agenda says they will be discussing issues such as climate change, affordable housing and student debt relief. But the significance of the event may be what it says about the way Democrats and Republicans are seeking to engage with potential voters online. “The new generation of Americans aren’t getting their news from MSNBC, CNN or Fox,” said Khanna, who represents Silicon Valley in Congress. “That’s just not how millennials and Gen Z consume news or get inspired. One of the ways they’re making decisions is engaging with streamers. It’s the equivalent of talk radio or cable for the new generation.”   A message from Meta:     AROUND THE WORLD EMERGENCY BRAKE — Italy is dragging its feet on the final plank of the EU’s flagship migration reform — after Germany agreed to a long-awaited compromise, write Gregorio Sorgi and Jacopo Barigazzi . During a meeting of EU interior ministers, Rome in an unexpected last-minute move placed a decision over the so-called crisis regulation on hold, crushing hopes of reaching a deal by the end of the day. Yet the EU home affairs chief Ylva Johansson guaranteed that EU ambassadors will sign off the agreement in the days to come. “We are very close to find the final decision in a few days,” Johansson said in a Brussels press conference after the meeting alongside Spanish Interior Minister Fernando Grande-Marlaska Gómez. A breakthrough on this issue would pave the way for an agreement on reform of EU asylum policy before the European election in June — after almost 10 years of failed reform attempts. “Italy didn’t say no … it has just asked for time,” said Italian Foreign Minister Antonio Tajani, speaking at a press conference in Berlin alongside his German counterpart Annalena Baerbock. Tajani added that more time is needed “to examine the content of this proposal from a legal point of view.” Earlier in the day, Germany’s center-left government dropped its veto over the deal, facilitating an agreement on the crisis regulation that details how EU border countries handle people seeking asylum during spikes in migration. The Greens — which belong to the German governing coalition — initially demanded the exemption of minors from border checks and opposed attempts to water down migrants’ rights in times of crisis. BALKAN TENSIONS — Kosovo’s President Vjosa Osmani blamed Serbia and Serbian President Aleksandar Vučić for the shootout in northern Kosovo that left a policeman and three gunmen dead over the weekend. “Kosovo is under attack,” Osmani told Reuters today . “The [armed] group simply exercised the intentions and the motives of Serbia as a country and Vučić as the leader.” A group of about 30 heavily armed Serbs stormed a village in an ethnic Serbian-majority region of Kosovo on Sunday, ambushing a police patrol and then taking refuge in a nearby Orthodox monastery. A deadly shootout between the group and police resulted in the death of a Kosovan policeman and three of the gunmen. Two other gunmen were arrested, while the rest fled. Kosovo’s leaders immediately pointed to Serbia, accusing its government of orchestrating the attack and arming the militia group. Vučić denied the accusations, but said the gunmen were local Kosovo Serbs who “do not want to suffer under [Prime Minister of Kosovo Albin] Kurti’s terror anymore.”   HAPPENING 9/28 — INSIDE THE CANCER MOONSHOT: Join POLITICO on Thursday, Sept. 28 for an in-depth discussion on the future of cancer treatment and innovation. Hear from experts including scientists, government officials and industry leaders as we explore the critical roles played by private industry, nonprofits, the National Cancer Institute and the new Advanced Research Projects Agency for Health in achieving the Biden administration's goal of cutting the cancer death rate in half over the next 25 years. Don't miss this opportunity to dive into the progress of cancer treatments and learn about the challenges patients encounter in accessing care. REGISTER HERE .     NIGHTLY NUMBER 28 million The number of student loan borrowers who will be expected to make a payment in October for the first time since a pause due to the pandemic. The Biden administration is moving ahead with plans to resume collecting student loan payments in the coming days, regardless of whether the government shuts down this weekend. RADAR SWEEP DEFEATING DEATH — With enough money and the right diet, exercise regimen and controversial health techniques like blood transfusions, can you beat back death ? It’s a question that has consumed entrepreneur Bryan Johnson as he works on what he calls “the most significant revolution in the history of Homo sapiens.” Johnson, 46, claims that he’s reversed his body age in recent years in order to reduce his “biological age.” After $4 million spent and 111 pills per day consumed, he claims that he now has the bones of a 30-year-old and the heart of a 37-year-old. He wants to get down to 18. To get an idea of how he’s doing all this — and whether he’s foolhardy or a genius or somewhere in between — Charlotte Alter profiled Johnson at his Venice, Calif. home for TIME. PARTING IMAGE On this date in 1985: Victims of earthquakes in Mexico City receive milk from a relief worker at a downtown relief center. The quakes reached a maximum intensity of 8.0, killed over 5,000 and left tens of thousands more homeless. | Jack Smith/AP Photo Did someone forward this email to you?  Sign up here .   A message from Meta: "I can practice cataract surgeries over and over in the metaverse.” Today, doctors like Renee Badroe are training in the metaverse to help treat patients with limited access to eye care. They sharpen their skills with FundamentalVR and Orbis International's immersive cataract training program. Discover other stories.     Follow us on Twitter Charlie Mahtesian @PoliticoCharlie Calder McHugh @calder_mchugh   FOLLOW US

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