The lawsuit would be one of the most aggressive and high-profile moves in the Biden administration’s rocky effort to tame the power of tech giants. If successful, it could lead to a court-ordered restructuring of the $1.35 trillion empire and define the legacy of Khan, who rose to prominence after authoring an article as a law student outlining the antitrust case against Amazon.
One of the final hurdles before the FTC sues Amazon is to get as many states as possible to sign on to the complaint, said two of the people, who were granted anonymity to discuss a confidential matter. A large, bipartisan group of states would be a strong signal of support for the case, especially since there are no Republican appointees confirmed to the agency, two of the people said. A Senate hearing was held earlier this week for the nominees for those two vacancies.
The FTC circulated a draft of the complaint widely to state AG offices, two of the people said, though they declined to identify the specific states.
Negotiations with states could also potentially lead to a delay in filing the case, one of the people said. Additionally, the looming possibility of a government shutdown could delay a case further if the FTC is unable to file before the end of the week.
In August, Amazon lawyers and executives met with Khan and the other two Democratic commissioners in a final bid to avoid a lawsuit. The so-called last rites meeting, conducted virtually on Aug. 15, failed to persuade the commissioners. Amazon felt it did not have enough information about the FTC’s allegations in order to offer concessions to avoid a lawsuit, according to a separate person with knowledge of the matter.
Spokespeople for Amazon and the FTC declined to comment.
The FTC’s lawsuit would just be the latest challenge to face Amazon. California and Washington, D.C., have already sued Amazon, with California’s case on track to go to trial and the Washington, D.C., attorney general appealing a judge’s decision to throw out that case. Washington state and New York also have open investigations.
The Wall Street Journal previously reported that the FTC’s lawsuit could come in September after a lack of meaningful progress in the August settlement talk.
Top enforcement officials in the Biden administration have aggressively gone after corporate power in the past year, but more often than not have struck out.
The FTC lost its bid to block Microsoft’s $69 billion purchase of Activision last week, which came months after another loss in its case to block Meta’s acquisition of a popular virtual reality app. The FTC is looking to break up Meta in a separate case, and just this week added individual Amazon executives to a lawsuit accusing the company of making it unnecessarily difficult for consumers to cancel their Prime memberships.
The results of any lawsuit are years away, long after Khan will have left the agency. And while the end game isn’t known, the FTC will likely seek a breakup of the company based on Khan’s previous statements.