Twist of Fates: Booksellers, Lina Khan and Amazon

Lina Khan is suing Amazon. Bookstores want to join the fight against one of their biggest competitors, claiming that the online seller lowers prices. You’d think Khan would be happy to add booksellers to his cause. Think again.

In an ironic twist of fate, booksellers both help and hurt her cause. Now the chairwoman of the Federal Trade Commission finds herself in a difficult position, trying to stop booksellers from sinking her difficult case.

While the booksellers are an unbearable nuisance to Khan, their argument is a welcome wrinkle to those who view Khan’s actions as excessive, destructive and potentially harmful to market competition and consumers.

What happened

Last year, the FTC filed a massive lawsuit against Amazon, alleging that it manipulates prices as a monopoly. The case is scheduled to go to court in 2026.

American booksellers want to intervene in this matter and cooperate with the FTC. They believe Amazon is unfairly using its size to negotiate better deals with publishers. This allows them to sell books at lower prices than independent book sellers. So they try to compete with Amazon’s lower prices, where consumers flock to save money.

The problem is that this argument contradicts the FTC’s claims about Amazon in its lawsuit. The FTC says Amazon’s monopoly position allows the company to charge more for books, increasing its profits by $57 million in 2018, for example. Khan told the federal court that booksellers should bring an entirely different lawsuit.

So which one is it? Is Amazon saving consumers money by offering books at low prices, as independent booksellers claim, or by raising prices, as the FTC claims?

The author of a Bloomberg technology article says both may be true.

The company has used various strategies to enter different product areas and train shoppers to buy things online that they usually get in store. Amazon can raise and lower prices depending on the type of competition it is facing at the time.

However, this may not happen. First, the bookseller admitted that Amazon is not the only retailer selling books in the digital city. They also compete with Walmart. Target and other stores. Perhaps their complaint is that Amazon started as a way to sell college textbooks cheaply, then grew into an online virtual mall that can sell everything from toilet paper to lettuce, and now also deliver your GrubHub order .

Khan’s biggest problem is that he must show consumer harm to prove antitrust violations. Where is the harm in consumers paying less for books?

as “Wall Street” dailythe editorial team commented:

Ms. Khan essentially agreed with booksellers in her much-derided 2017 Yale Law Journal article, “The Amazon Antitrust Paradox.” She then argued that Amazon was unfairly undercutting small competitors by “deeply cutting prices.” Its change now represents a concession that lowering prices does not constitute a violation of modern antitrust law, which puts consumers’ interests first.

Why is it important?

This case matters because Lina Khan seeks to overturn the consumer welfare standard, a long-standing standard that determines whether companies violate antitrust law or are monopolies. Under this standard, economic data is analyzed to determine whether business practices or mergers will increase prices, reduce production, or stifle innovation.

Khan and others would rather use antitrust laws to support other radical social policies and programs.

The Federal Trade Commission, chaired by Lina Khan, has taken an aggressive stance towards Big Tech, motivated by the desire to break it up.

Khan, making herself a David against Goliaths, has sued Amazon, Google and many other companies and intervened to stop major mergers and acquisitions. So far, Khan has lost more cases than she has won.

Her campaign to change antitrust laws may be coming to an end as her leadership could come to an end if her boss doesn’t win re-election.

Bottom line

Ultimately, antitrust law and its enforcement should focus solely on protecting consumers, not on supporting hatchet-wielding bureaucrats to transform the economy as they see fit.