(HorizonPost.com) – Amazon and Facebook are once again trying to throw their weight around, only this time it’s not part of an attempt to discredit former President Donald Trump or Conservatives in general. Instead, they are trying to force the Federal Trade Commission (FTC) chairperson to stay far away from antitrust cases involving their companies.
Their Worst Nightmare
Lina Khan is the current FTC head, and if there is a bogeyman underneath the beds of the top people of the Big Tech, she is it. She was a student at Yale Law when she wrote a “note,” published in a 2017 issue of the school’s journal (YLJ).
Her paper, “Amazon Antitrust Paradox,” detailed how antiquated and outdated US antitrust laws are concerning the 21st Century and the Internet. Those laws were created as weapons to protect consumers from becoming victims of companies that came to be the only, or one of a very small elite group, of places where people could buy given commodities for great profit — a.k.a. monopolies.
But Ms. Khan realized companies like Amazon, Google, and Facebook cornered their respective markets using a different strategy. So she wrote her paper, and people paid attention. She realized in the information age, in cyberspace, industry leaders focused on domination, not profits.
Amazon as an Example
Take, for example, the e-book market. Then-CEO Jeff Bezos of Amazon decided bestsellers would be priced at $9.99 regardless of the company’s cost. This price was “significantly below the $12-$30 that a new hardback typically costs.” It’s also believed he originally priced the Kindle e-reader devices below what it cost to manufacture them. His plan for market share at the expense of profit worked because, as Khan’s paper notes, through 2009, Amazon sold approximately 90% of all e-books.
Another method Bezos used to push competitors out of the online shopping sphere was the idea of Amazon Prime®, which in its first iteration, offered people memberships at $79 annually. This subscription gave people unlimited, free, two-day delivery service on most products. The YLJ article says “one Amazon expert tallies that [the company] has been losing $1 billion to $2 billion a year” on the program, once again trading profit for market share.
Running Scared
Big Tech firms are asking Khan to recuse herself because they claim her past work shows she couldn’t be unbiased. Having the person who is probably the preeminent legal scholar on the subject kept away from their litigation is just a coincidental side benefit. The merest thought that they would gain from having the arbiter being far less knowledgeable on the subject matter would only occur to someone who has an obsessively paranoid mindset. We’re sure it never occurred to them, of course.
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