Anti-Business Activism Behind the FTC’s Lawsuit Against Amazon – The American Spectator

On Jun 30, 2023

The Federal Trade Commission continues to attack big businesses — like Amazon — just to spite them.

Last week, the FTC filed a dubious lawsuit against Amazon, alleging that the online retailer has “duped” customers into signing up for Amazon Prime as well as obfuscated the process for canceling a Prime membership. This is just the latest example of the FTC’s unduly burdening companies with overzealous litigation — and ultimately harming consumers.

Amazon does not trick consumers into signing up for Prime. Individuals without Prime memberships make purchases on Amazon every day without falling into a subscription. Promoting Prime to non-Prime users and advertising the benefits of a Prime membership are not deceptive practices, and — despite the insinuations of the FTC — when people do bite on the offer of a free trial, the terms of membership are stated in simple, clear language. The FTC must think consumers are too lazy or stupid to mark their calendars and cancel before they’re charged full pop. And even if that’s the case, it’s no fault of Amazon.

The lawsuit criticizes Amazon for making it too hard to cancel a Prime Membership. The FTC points out that it takes “a minimum of six” clicks to go from Amazon’s home page to completing the account cancellation process. The horror! Ironically, as pointed out by Patrick Hedger, the executive director of the Taxpayers Protection Alliance, it takes more clicks to submit a comment to the FTC.

The FTC’s Activist Chair

Such needless litigation harms consumers in two ways: It wastes taxpayer money, and it forces companies to waste resources fighting the federal government. The latter often leads to more expensive products and imposes major opportunity costs, since money spent on litigation is money that cannot be spent on developing better, cheaper products.

The FTC, which was created to protect consumers, has become an activist bureaucracy aimed at punishing businesses for being big. Before becoming the chair of the FTC, Lina Khan produced an illustrative body of writings about competition and Big Tech firms. In a 2017 essay published in the Yale Law Journal — titled “Amazon’s Antitrust Paradox” — Khan argued that the mere size of a company can form the basis of antitrust action.

Khan also argued that Meta should be blocked from all future acquisitions. Yet, despite her past statements, Khan disregarded the advice of the FTC’s top ethics officer, who suggested she recuse herself from the commission’s case against Meta’s acquisition of Within Unlimited, a fitness app. Thankfully, the FTC’s attempts to block the acquisition ultimately failed.

Khan has been the face of countless failed lawsuits by the FTC as she sets out to pester big companies and block them from growing through mergers or acquisitions instead of focusing on real consumer welfare. Nevertheless, in March, the FTC requested a whopping 37 percent increase in its budget for fiscal year 2024. Taxpayers should not be asked to provide greater funding to an activist agency undermining their interests.

The FTC’s priorities under Lina Khan are all wrong. Big businesses are not inherently bad, and mergers can improve efficiency and innovation. Khan’s attacks on big business and her hostility toward mergers and acquisitions not only unduly burden companies but also harm consumers by increasing the prospect of higher prices and slower growth. The commission does not deserve a raise, but Americans deserve better from their government.

Benjamin Ayanian is a graduate of the University of Minnesota, where he studied philosophy, business law, and political science. He has also been published in the Star Tribune and the Wall Street Journal. Follow him on Twitter @BenjaminAyanian.

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