GINN: The FTC’s Amazon Lawsuit Is An Anti-Market Disaster

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Just weeks after launching its pointless lawsuit against Google, Biden’s Federal Trade Commission set its sights on Amazon, beginning the process of suing one of Americans’ favorite companies.

While government regulation is often portrayed as a means to protect consumers, this lawsuit appears to be another attempt to control the marketplace, with potentially detrimental consequences for consumers, competition and innovation.

The Amazon lawsuit is part of the FTC’s ongoing tirade against businesses, including “Big Tech,” that they accuse of violating antitrust law. But the real “violation” here is against free-market capitalism and human flourishing. 

The FTC takes issue with how Amazon manages its online marketplace for sellers, claiming that sellers are forced to charge high prices and lose profit by using Amazon’s add-on services and advertisements. Both of which are optional. It’s not unlike how popular media platforms employ algorithms to favor certain types of content, which some people may try to circumvent by purchasing ad campaigns.

But the FTC claims these choices are optional “in name only” and that Amazon is operating like a monopoly, forcing customers to pay higher prices for lower quality products. 

And just like with the Google lawsuit, the real problem reveals itself with this complaint. 

Antitrust laws were established to preserve competition and protect consumers. They focus on the consumer welfare standard, which evaluates whether consumers are better or worse off due to a company’s actions. Research, however, shows that Amazon’s consumers are pleased with the service. Otherwise, they’d stop using it. 

According to the latest American Customer Satisfaction Index, Amazon takes first place for its selection, value and online shopping experience. And what’s more, NetChoice polling shows a staggering 84 percent of Americans and 92 percent of Republicans view the FTC’s lawsuit against Amazon as a waste of resources.

If the FTC prevails, the result could be fewer product choices, higher prices, slower deliveries and fewer opportunities for small businesses — an outcome contrary to the intended purpose of antitrust laws.

This lawsuit threatens to waste taxpayers’ dollars that could be better utilized elsewhere, particularly when the economy faces challenges like the labor shortage, high housing costs and inflation, to say nothing of Congress’ refusal to avoid accruing more debt

It also highlights the knowledge problem that economist Friedrich Hayek pointed out. Central planners lack the dispersed knowledge necessary to determine market dynamics effectively. Manipulating markets through government intervention often leads to unintended consequences, undermining the principles of free-market capitalism.

The FTC’s lawsuit against Amazon raises serious concerns about its true intentions and potential negative consequences. Rather than stifling free markets and wasting resources, government should focus on getting out of the way of productive activities that benefit consumers, workers and employers alike.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting, chief economist or senior fellow at multiple state thinks across the country, host of the Let People Prosper Show, and previously the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20. Follow him on X.com at @VanceGinn.