Like so many other large and successful American companies, Amazon has to walk and chew gum at the same time. While gearing up for the holidays and what is most certainly going to be a rush on their Prime Big Day deals during a period of high inflation, Amazon is also fending off the Federal Trade Commission’s most ambitious antitrust lawsuit in a generation. But while the court battle to preserve their business model will drag on for years, the holidays will be here before you know it. 

The key to Amazon’s defense against the FTC is its 200 million Prime members and the many reasons consumers want their subscription services. The cost savings accrued by Amazon’s customers go beyond price tags. Benefits range from the ease of on-the-go mobile shopping and product comparisons to try-before-you-buy options and subscribe-and-save auto-delivery offers. Amazon is even rolling out opportunities for consumers to get paid for picking up their own orders. 

The sales promotions offered by Amazon have even created ripple effects for consumer savings, where competitors such as Walmart and Target, attempt to preempt Prime days with their own clearance items and service options. 

Amazon’s brand has become synonymous with affordability and efficiency, despite FTC accusations of market price manipulations. 

Amazon's mission statement is “to be Earth's most customer-centric company” and in the last decade, Americans have become Amazon-obsessed. Cakes have been baked to look like Amazon delivery boxes, and doorsteps have been adorned with mats that say “Yes, Amazon this house again” (such mats are sold by rival retailer sites, like Etsy). 

Even the FTC chairwoman, Lina Khan, admitted in her 2017 article for the Yale Law Journal that customers “universally seem to love the company.” Nevertheless, since being appointed by President Biden, Khan has made it clear that she sees being big as being bad. The FTC is moving forward with its antitrust allegations and the media coverage of it has taken off.

As the Amazon case moves forward, it is important to remember that the prominent market position of Bezos’ behemoth business is a testament to its consumer-oriented mission.  

Amazon is ranked as one of America’s most favored institutions and, according to the Morning Consult list, Amazon is ranked third for being one of the most trusted brands in the country. It came in first place when compared to other tech brands. Clearly, Amazon is doing something right when it comes to meeting market needs, making Khan’s scathing case against it so wrong and so strange. 

Khan’s track record of cases and her latest lawsuit against Amazon seem to have little to do with consumer welfare and more to do with interests in extending government power into the economic realm. As such, buyers should beware. Whenever government agencies get involved in consumer matters, choices decrease and costs can increase. 

Khan claims to care about competition and innovation, but her stance on corporate deals stifles business strategy and portrays consumers as needing a nanny state to safeguard their shopping habits.

One of the FTC’s claims is that Amazon is steering customers towards preferred merchants and higher-priced goods. If that is the case, then consumers could simply steer their shopping away from Amazon and towards the actual dominant retailer in the U.S. -- Walmart. 

If not Walmart, there is always Target, Costco, or any other big-box retailer. 

When you look at the current cases Khan has launched, it seems she views business transactions as occurring in a vacuum. The FTC willfully overlooks the fact that while Amazon may be a primary player in e-commerce now, competition is certainly getting fierce both at home and abroad.

The government’s indictment of Amazon sets a disturbing precedent for American businesses regarding the ability to control the interactions and transactions of a private firm. 

The words of economist Ludwig von Mises should be given careful consideration:

The consumer suffers when the laws of the country prevent the most efficient entrepreneurs from expanding the sphere of their activities. What made some enterprises develop into ‘big business’ was precisely their success in filling best the demand of the masses. 

Kimberlee Josephson is an associate professor of business at Lebanon Valley College and serves as an adjunct research fellow with the Consumer Choice Center.

Image: Amazon