The FTC’s Gambit Against Amazon: Navigating a Multiverse of Blowback and Consumer Harm

Cite this Article
Lazar Radic and Geoffrey A. Manne, The FTC’s Gambit Against Amazon: Navigating a Multiverse of Blowback and Consumer Harm, Truth on the Market (August 03, 2023),

The Federal Trade Commission (FTC) is reportedly poised some time within the next month to file a major antitrust lawsuit against Amazon—the biggest yet against the company and the latest in a long string of cases targeting U.S. tech firms (see, for example, here and here).

While specific details of the suit remain largely unknown and subject to changes up to the 11th hour, according to Politico, the FTC’s multi-pronged case is likely to focus on three aspects:

  1. Amazon’s price-parity clauses (“PPCs”);
  2. the steering of sellers to Amazon’s own downstream logistics service, Fulfilled by Amazon (“FBA”); and
  3. the granting of a better placement in customer search results to sellers who buy ads.

While similar cases have been brought against Amazon on all three counts in other jurisdictions—including Italy, the United Kingdom, Germany, and the European Union—this may be the first time an antitrust authority has seriously argued that the only way to address Amazon’s allegedly anticompetitive conduct fully is to break the company up.  According to an earlier Bloomberg piece:

Amazon settled the European case by offering to change its Buy Box practices and restrict how it uses data from third-party sellers on its European web stores. While Amazon could make a similar offer for the US market, Khan has signaled opposition to such compromises, telling a Senate committee last year that the FTC would “strongly disfavor” such remedies.

The writing, so to speak, is on the wall. The 2020 U.S. House Judiciary Antitrust Subcommittee’s Staff Report on Digital Markets—on which FTC Chair Lina Khan worked before joining the commission—made no bones about its preference for structural remedies. Indeed, the report’s very first recommendation to address the problems it identifies is:

Structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business.

The report also recommends far-reaching behavioral remedies, such as:

Nondiscrimination requirements, prohibiting dominant platforms from engaging in self-preferencing, and requiring them to offer equal terms for equal products and services.

Judging by past statements critical of Amazon from the FTC and its leadership (here and here), and by Politico’s and Bloomberg’s recent reports, the FTC appears likely to propose similar remedies in its impending suit.

But this approach would be based on a deeply flawed understanding of Amazon’s business model, the unique benefits it brings to both users and sellers, and a myopic view of the consequences of these kinds of structural remedies—many of which would see competition, consumers, and third-party sellers much worse off than they are today. It also would likely eviscerate the company’s best product: Amazon Prime.

The FTC’s Prime Objective

For instance, Amazon acting as a seller on its own platform (Marketplace) means that it will be enticed to give an unfair advantage to its own products over those of rivals. It also means that it is in a position to use merchants’ sales data to boost its own retail business. As Chair Khan has written:

One feature dominant digital platforms share is that they have inte­grated across business lines such that they both operate a platform and market their own goods and services on it. This structure places domi­nant platforms in direct competition with some of the businesses that de­pend on them, creating a conflict of interest that platforms can exploit to further entrench their dominance, thwart competition, and stifle innovation.

But such conflicts of interests and so-called “self-preferencing” behavior wouldn’t be an antitrust issue if Amazon wasn’t a dominant online-retail platform and, according to the FTC, an unavoidable trading partner for merchants looking to sell their products online. As the 2020 House Judiciary report suggests: “sellers feel forced to be on Amazon because that is where the buyers are.”

A crucial piece of this puzzle is Prime, Amazon’s subscriber service that bundles a range of attractive benefits for consumers: access to Prime Video, music streaming, special deals and discounts and, above all, free two-day shipping. On average, Prime members spend more time —and more money— on In addition, they tend to only purchase goods that bear a Prime Badge, which guarantees them two-day shipping and responsive, generous customer service (as well as Amazon’s trusted stamp of approval). For products with more than one seller, Prime is said to also provide an advantage over competitors for winning the Buy Box—considered crucial to succeed on the Marketplace.

Accordingly, Amazon can (or so the story goes) dangle its coveted Prime Badge and access to its 200 million devoted subscribers worldwide to extract unfair conditions from third parties (including PPCs and ad expenditure); entrench its power in its core market (online retail); and simultaneously leverage that market power to expand into other markets (such as, for example, logistics). As Business Today wrote of the expected FTC complaint:

One major concern is that the bundled services offered through Amazon Prime are being exploited to illegally solidify the company’s market power. 

For example, the FTC has endorsed the notion that Amazon leverages its dominant position in Marketplace to extend its dominance into the adjacent logistics market by giving favorable treatment to the products of sellers who use FBA—regardless whether those products are objectively superior, or whether FBA is the best available delivery option (supposedly, the other way to obtain the Prime Badge, “Fulfilled by Sellers, is nigh on impossible).

In turn, Amazon uses the ever-growing network of FBA to strengthen Marketplace and its retail branch, and especially Amazon’s Prime program, thus creating a feedback loop among these services. Advertising and PPCs are also alleged to be a part of this anti-competitive strategy: sellers “locked” into Amazon’s “flywheel” are dependent on the company and therefore have no other choice but to pay Amazon for ads to improve their visibility on Marketplace; accept its “draconian” PPC requirements; and contract with FBA. According to some reports, this “package” eats around half their revenue.

The theory echoes one of the primary arguments in Khan’s 2017 paper “Amazon’s Antitrust Paradox”  (which, incidentally, is likely what propelled her to FTC leadership), where she wrote:

Similarly, the 2020 House Judiciary report found that:

There is a strong link between Amazon Marketplace and Fulfillment by Amazon (FBA), Amazon’s paid logistics service. Amazon uses its dominance in each of these markets to strengthen and reinforce its position in the other.

Because the competition issues that Khan and other Amazon critics identify derive primarily from how Amazon is structured—i.e., the markets in which it is present, intersections between those markets, and the inexorable conflicts of interest that arise in that context—the FTC is likely to seek a combination of behavioral and structural remedies. The latter would probably involve, as Khan wrote in “The Separation of Platforms and Commerce,” “limiting the lines of business in which a firm can engage, either by proscribing entry in certain markets or by requiring that distinct lines of business be operated through separate affiliates.”

More generally, the FTC is likely to target Amazon’s ability to wield Prime to consolidate and expand its business, even if the remedy would require ruining Prime. The FTC’s recent allegations that Amazon uses deceit and dark-patterns to “lock” users into endless Prime memberships is arguably part of the overarching strategy to erode Prime and, ultimately, weaken Amazon. The FTC, in other words, is going to want to make it easier for third-party sellers to access Prime members by undermining Amazon’s ability to control access to those members, even if that means diluting the quality standards to qualify for the Prime Badge.

What follows is an assessment of how the FTC’s approach and its likely remedies could backfire.

How the Structural Remedies Against Amazon Could Backfire

If the reports are to be believed, the FTC believes the only remedy that sufficiently satisfies its concerns would be to break up Amazon, although such structural separation could take various forms.

In theory, several remedial options are available to address the FTC’s competition concerns regarding the relationship between Amazon’s Marketplace and FBA, or the supposed conflicts of interest inherent in Amazon selling on the same platform it owns. But each of these options presents unique challenges to the assumption that structural separation will result in improved circumstances.

Moreover, unless the FTC can successfully mount a follow-up challenge to Amazon’s preferred course of action, there is no reason to think that the commission would be able to dictate its own preferred form of structural separation.

The Regulators’ Preferred Option

The first option is that Amazon stops selling its own products and becomes purely a platform marketplace and logistics operator for third-party sellers on Arguably, this is likely to be Chair Khan’s preferred solution, and it is certainly the preferred outcome for many of her ideological allies (see, e.g., here, here, and here). As they envision it: “no Amazon Basics batteries in the online store, only batteries made by third parties like Duracell.”

While the effort to break up Amazon is often posited to be neutral with respect to which pieces of Amazon’s business are to be spun off, those who favor breakup do clearly have some expectations. For example, in a 2021 interview, then-U.S. Rep. David Cicilline (D-R.I.) had this to say about proposed legislation to break up Amazon:

It would be a structural separation. It would say you can do, either be the platform that sells goods and services or be a producer of goods and services. That you just, you can’t do both things.

But when pressed on whether such legislation would harm consumers, Cicilline was clear about what he expected to happen:

No, not at all. I mean, there would still be a marketplace. Presumably, Amazon would be the marketplace. There would still be lots of products. But Amazon would just be limited to maintain the marketplace.

Such an outcome would seemingly let competitors’ have their cake and eat it too: third-party sellers would keep enjoying the benefits of Amazon’s outstanding logistics operation—prompt delivery, broad coverage, excellent customer service, etc.—while alleviating the “unfair” competitive pressure Amazon exercises when it acts as a seller on the marketplace (i.e., “self-preferencing,” use of nonpublic, third-party seller data, etc.).

The Walmart and Shopify Options

But what if, instead of jettisoning its own retail business, Amazon were to shut down its third-party Marketplace, remain as the only seller on, and either run its logistics business only for itself (the “Walmart option”) or offer its logistics service for off-platform sellers, as well (the “Shopify option”)?

This is not as far-fetched as might initially seem: Amazon has already suggested that “fringe notions of antitrust,” such as those expressed in the 2020 House Judiciary report, might result in it kicking third-party sellers out of the Marketplace:

The flawed thinking would have the primary effect of forcing millions of independent retailers out of online stores, thereby depriving these small businesses of one of the fastest and most profitable ways available to reach customers. For consumers, the result would be less choice and higher prices.

And Amazon made the same point elsewhere, following the introduction of the American Innovation and Choice Online Act in 2021:

In a statement after the bills were announced, Amazon’s vice president of public policy, Brian Huseman, suggested that if forced to choose one business model, the company could stop supporting independent, third-party sellers, a move it positioned as a potential detriment to the economy.

Such a response makes sense. After all, conflicts of interests, self-preferencing, and cross-use of third-party data are not issues at all if there are no third-parties on But as Amazon recognizes (but the FTC appears not to), that would be bad for consumers:

The flawed rationale for outlawing the sale of first- and third-party products in the same store is that third-party sellers suffer when they compete with the products retailers sell in their stores, including popular private-label products. What these misguided notions from some subcommittee staff misunderstand is the fact that third parties having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers.

Under either the Walmart or Shopify options, third-party sellers would be left without a platform on which to sell their products and would have to redefine their networks from the ground up. Consumers, meanwhile, would be left with a relatively meager choice of products at

Since Amazon makes most of its revenue from third-party sales, one might question why it would jettison those instead of its own first-party sales. But Amazon’s revenues from first-party sales would not remain static if third-party sellers were removed from the platform. Indeed, among the questions not adequately considered by those seeking to break up Amazon is why it allows third-party sellers at all. The answer, no doubt, is not that it couldn’t earn as much revenue by sourcing and selling products on its own, but that the combination of first- and third-party sales (and logistics and myriad other services) improves the platform’s appeal to consumers. Structural separation may solve one perceived problem but not without losing the benefits of the platform’s integrated offerings (at likely much higher cost). As John Lopatka has noted:

[I]mposing divestiture on a monopolist for engaging in single-firm exclusionary conduct threatens to destroy the integration that is the essence of any firm and is almost always disproportional to the offense.  Even if conduct remedies can be more costly to enforce than structural relief, the additional cost is usually less than the cost to the economy of forgone efficiency.

In other words, while it is possible that Amazon could make up enough revenue to offset the loss of third-party sales, it would come at consumers’ expense. Currently, Amazon’s own products comprise 5% of the inventory sold on the Marketplace, but account for 40% of total revenue. In other words: is surely economically viable without third-party sellers, and without the full range of products they offer. Amazon might offer its own substitutes for many of the products previously offered by third-party sellers, but it’s unlikely that the company would want to substitute the entirety of the lost inventory.

Instead, the most likely scenario is that, in addition to continuing to sell its current line of products, Amazon would poach the biggest sellers to fill in the most profitable of the remaining products, turning them into wholesalers/vendors through a network of contracts. Meanwhile, consumers would lose access to a considerable chunk of product options, while those third-party sellers that did not sign wholesale agreements with Amazon or manage to find alternative channels to reach customers would risk going out of business. In addition, the intense head-to-head competition among all sellers (including Amazon) on the current platform would be lost.

Under the Shopify option, Amazon would continue to provide logistics services for third-party sellers, but would not compete with them directly on its own consumer-facing platform. This would arguably be the easiest remedy to implement, as it would essentially mean scaling up Amazon’s already-launched Buy with Prime program.

But what would it accomplish for the FTC to require this remedy? Third parties would continue to sell their products through Amazon (now acting as a delivery service), but—because the remedy would effectively kill Marketplace—consumers would now have to go through dozens of companies’ individual sites to find products and compare prices and other terms before placing an order. Consumers would be worse off, because they would lose the convenience of a one-stop shop, a single payment system, and the oversight and reputational benefits of a trusted intermediary. And third-party sellers would be worse off because their products would no longer receive the same exposure, while their marketing costs would skyrocket.

Granted, competing marketplaces or retailers might benefit, but only because Amazon would be made worse. This is a perversion of the logic of antitrust law, which is not supposed to bolster competitors by destroying successful rivals’ products, but to curb anticompetitive conduct for consumers’ benefit.

The Walmart option, by contrast, would ironically make Amazon even more vertically integrated. This would, in a sense, subvert the underlying logic of the FTC’s case, its broader problem with Amazon, and its contemporary campaign against vertical integration.

The Costco Option

As noted above, FTC leadership have made clear that they believe Amazon leverages its market power through Prime. The story goes something like this: once customers pay for the Prime membership (into which the FTC also thinks they are duped by the company, using “dark patterns”), they are “likely to concentrate their online purchases with Amazon” (here). Because Prime gives users a multitude of attractive benefits—such as free same-day/two-day shipping on eligible items, digital-streaming video and music, and early access to deals—Amazon is thereby able to build a moat around its 200 million Prime users and enshrine itself as the gatekeeper of e-commerce. According to the 2020 House Judiciary report:

Amazon also enjoys significant market power over online consumers. Amazon uses Prime and its other membership programs to lock consumers into the Amazon ecosystem.

To have access to those customers, who also tend to “shop more often with larger baskets,” third-party sellers’ products must win the Buy Box, which gives preferential treatment to products with the Prime Badge and through which the vast majority of Amazon sales are made. The report also argues that the “onerous eligibility requirements” of Amazon’s Seller Fulfilled Program (“SFP”) “render it an entirely impractical option for most sellers” to obtain the Prime Badge, thereby causing third-party sellers “feel compelled” to sign up for FBA. There is therefore a feedback loop between Prime and FBA: the more third-party sellers that contract FBA, the more attractive Prime becomes, the more users sign up for Prime, the more third-party sellers contract FBA, etc. In the words of Amazon Chief Financial Officer Brian Olsavsky:

Prime and FBA reinforce each other—they are inextricably linked. FBA adds Prime eligible selection. Prime member growth and purchasing habits attract sellers to FBA.

Therefore, if Amazon were to remove third-party sellers from Marketplace, Prime would arguably be substantially less attractive without the products those sellers offered. On the other hand, Amazon could recoup some of its lost revenue by turning into a subscription service accessible only to paying Prime members, which would make this the “Costco option.” As Ben Thompson observed in a recent post, it is likely that current non-Prime Amazon users free ride on the investments made possible by Prime contributions:

It seems perfectly plausible that it makes more sense for Amazon to optimize its logistics around the delivery promises it makes for Prime customers, instead of carving out a less efficient delivery mechanism for non-Prime customers that would actually increase overall coordination costs. […]

Perhaps the most intellectually honest position is that if Amazon believes it can most efficiently deliver packages by giving the same level of service to everyone that it ought to simply charge everyone; in other words, just as Costco requires a membership to even get in the store, Amazon ought to require a Prime membership to buy anything at all.

Given this, it seems likely to me that the people who have not signed up to Prime are free riders in the “free-rider problem” sense.

It is difficult to see who would benefit from the Costco option. The (very likely) increase in the price of the Prime membership needed to offset any revenue losses—under any of the structural remedies with the capacity to inflict such losses—would reduce’s total output, to the detriment of both consumers and third-party logistics operators (assuming Amazon did not decide to fulfill all orders itself).

Behavioral Remedies Misbehave, Too

In some of her written work, Khan has cited information asymmetries between targeted platforms and public enforcers as a reason that behavioral remedies can be more costly and challenging to implement than structural remedies. But she has also suggested that behavioral remedies could, in principle, work—especially in combination with structural remedies.

We discuss two possible such scenarios below.

Essential Facilities: Legal and Economic Problems

A crucial element of the expected strategy against Amazon would be to pry open the gates to its most loyal customers: Prime members, whom the commission appears to consider the axis for Amazon’s multi-pronged anticompetitive conduct and, at present, unfairly moated from third-party sellers. As pointed out above, the view is that Amazon gives preferential treatment on Marketplace to its own products, products delivered by FBA, and products sold by third-party sellers who pay for ads or abide by Amazon’s PPCs. Supposedly, sellers consent to this abuse because they “need” access to Prime members, and because they have nowhere else to go.

Amazon could presumably address these issues by leaving itself as the only seller on (no Marketplace). The FTC could try to avoid this outcome—which it presumably would want to do—by seeking to declare Amazon an “essential facility.”

The theoretical groundwork for this action has already been laid. Khan has written that Amazon is a “platform,” which she defines as an “essential facility”—i.e., something on which companies that provide complementary products rely. The 2020 House Judiciary report likewise supported the view that Amazon is an unavoidable trading partner for any merchant seeking to sell his products online.

Both the 2020 report and Chair Khan herself have also proposed “revitalizing the ‘essential facilities’ doctrine,” which is the legal requirement that dominant firms provide access to their infrastructural services or facilities on a nondiscriminatory basis. This doctrine could theoretically be applied in isolation, or in conjunction with a structural remedy (see the section above). As Khan has written, “structural separations and nondiscrimination rules can function as critical complements in the service of nondiscrimination.”

There are, however, two problems with this solution” one legal and the other practical.

From a legal standpoint, the essential facilities doctrine has fallen out of favor and courts are unlikely to entertain it. Indeed, ever since the U.S. Supreme Court’s ruling in Trinko, no plaintiff has successfully litigated an essential facilities claim to judgment (even prior to that, the doctrine was harshly criticized).

Furthermore, it is highly doubtful whether Amazon would even qualify as an “essential facility.” The fact that is convenient for sellers because it gives them access to the huge and loyal customer base that Amazon has built up over decades of sound management and investment doesn’t automatically mean that it’s also essential. Indeed, merchants are still free to sell their products through other offline or online channels, including their own websites.

As Geoffrey Manne and Kristian Stout have argued:

Granting retailers access to Amazon’s platform on artificially favorable terms is no more justifiable than granting them access to a supermarket end cap, or a particular unit at a shopping mall. There is, in other words, no business or economic justification for granting retailers in the time-tested and massive retail market an entitlement to use a particular mode of marketing and distribution just because they find it more convenient.

Moreover, all Amazon would have to do to comply with an “essential facilities” determination is to grant everyone access to on equal footing. But that “footing” need not be the best possible footing. In fact, Amazon could grant everyone access on worse conditions than it does today, so long as those conditions were applied equally to everyone, including itself.

For instance, to ensure that products sold through FBM qualified for the Prime Badge more easily, Amazon could loosen its notoriously strict delivery requirements: say, four-day delivery instead of two-day delivery. It could also make it easier for sellers’ products to win the Buy Box. But this would be a Pyrrhic victory for the FTC, as it would simply reduce the standard of quality across the platform. Over time, this would make worse—less trusted, less popular with consumers, and less beneficial to the very sellers that Khan wants to empower.

In sum, it is difficult to see how resuscitating and applying the essential-facilities doctrine to Amazon would be a net benefit for consumers or competition. If, that is, the courts even permit it.

Price Parity Clauses Do Not Constitute Price-Fixing Cartels

Reportedly, the FTC’s complaint will raise PPC allegations similar to those put forward in existing cases by the attorneys general of California and the District of Columbia. PPCs, in a nutshell, require that retailers not charge a higher price on Amazon than they do on other platforms. According to the 2020 House Judiciary report:

Amazon uses its dominant position in e-commerce as leverage with other businesses to require most-favored-nation (MFN) clauses or similar price parity provisions [PPCs] to guarantee that it will always receive the best prices and most favorable terms. While these clauses are not inherently anticompetitive, Amazon has a history of using MFN clauses to ensure that none of its suppliers or third-party sellers can collaborate with an existing or potential competitor to make lower-priced or innovative product offerings available to consumers.

It is alleged that these PPCs are especially egregious in the book market, where they “stifle the emergence and growth of competitive alternatives.” As the 2020 report argues: “Essentially, Amazon disrupted this market, dominated it, and now wields its immense power to effectively guarantee that no competitor could possibly do the same.”

The 2020 report and the D.C. and California complaints allege that Amazon aggressively enforces PPCs against third-party sellers on the Marketplace and responds to violations with “Buy Box suppression,” where it removes a seller’s ability to win the Buy Box. Thus, the House Judiciary report concludes:

Amazon’s “Fair Price Policy” is likely anticompetitive with respect to blocking competition from other marketplaces, and does not result in lower prices for consumers as Amazon has claimed.

Again, the reason why sellers accept this supposedly egregious and prevalent practice is that they “need” access to Amazon’s Prime users (and, by extension, its Buy Box).

If the cases from the attorneys general in D.C. and California are anything to go by, the FTC may seek to ban Amazon from imposing PPCs in its dealings with third-party sellers. Again, Amazon could respond by simply removing third-party sellers from But even if it chose not to do that, consumers wouldn’t necessarily be better off in a world without PPCs. As Geoff Manne and Dirk Auer have written, PPCs have many pro-competitive benefits and, far from blocking competition, they often enable it.

PPCs generally benefit consumers, who don’t have to waste time searching among sites, because they know they are unlikely to find lower prices elsewhere. They also encourage e-commerce sites to improve their services. With PPCs, consumers have less incentive to use one platform to search for goods and another to buy the thing they are looking for. This means that all retail sites have an incentive to invest in good search functions and easy consumer interfaces, rather than sacrificing both in favor of competing on price. Among other valuable point-of-sale services, PPCs have encouraged retail platforms to invest in curated reviews, side-by-side product comparisons, and useful product suggestions.

For a company like Amazon, bare-bones sites that offer none of these bells and whistles present a free-rider problem. Many shoppers use Amazon as a convenient starting point for their product search. By requiring its retail suppliers to sign PPCs, the company is protected from being undercut by rivals that have made none of those investments in service. PPCs may also deter rivals who sell through the Amazon platform from raising the prices they list on Amazon in order to discourage consumers from shopping there.

Regardless of these considerations, the FTC is likely to portray Amazon’s PPC policy as a price-fixing agreement, on grounds that Amazon sometimes offers its own versions of products that other retailers also sell through its platform (even though PPCs do not limit this competition in any way). The reason for this strategy is clear: if courts go along with the argument, the FTC would not have to show that Amazon’s policy harms consumers—which it doesn’t.

And yet, whatever one thinks of Amazon’s PPC clauses, these agreements with retailers are clearly not a price-fixing cartel. Retailers are perfectly free to undercut the prices Amazon charges for similar goods. Amazon’s policy also doesn’t diminish competition among various brands. If retailers think Amazon’s fees are excessive, they can take their business to a rival site, like Walmart, or sell exclusively through their own stores. We’ve seen Birkenstock, Nike, Ikea, and Gap all either contemplate or complete such moves. The stellar growth of rivals like Shopify and Etsy are also reminders that this market is dynamic and highly competitive.

Furthermore, it is not entirely clear that Amazon ever enforced the PPC provisions in question. To the extent that they did, the sanction for infringing Amazon’s PPC was, allegedly, for a handful of sellers to be demoted from Amazon’s Buy Box, which also happens when another seller offers a better deal.

In other words, as Andrew Mercado has observed, those sellers still show up in the “other sellers” dropdown section of the product page, and consumers can choose that seller with little more than a scroll and an additional click.Thus, banning PPCs would be disproportionate and would undermine Amazon’s incentives to invest in its own platform—investments from which both consumers and sellers ultimately benefit.

Conclusion: What Doesn’t Kill You Makes You…Worse

Based on early reports, the FTC’s impending suit against Amazon appears to be animated less by any coherent economic theory of harm, and more by an intent to damage the company’s business under the erroneous assumption that harming Amazon is automatically good for competition. Paradoxically, however, Amazon could be the one to suffer the least from the FTC’s misguided actions.

Indeed, while a range of plausible remedies would damage Amazon, the company would not disappear from the market. Its services would simply become worse. Where it once stood as one of the most innovative companies in the world and the most trusted American tech brand, what remains of Amazon would be a glorified delivery service, a Walmart doppelganger, or a Costco clone. Even proponents of strong antitrust enforcement think a breakup would be unwise:

Breakups wouldn’t help us stimulate a more innovative creative ecosystem. But only opening up platforms after litigating on an essential facilities doctrine for 8 years wouldn’t get us there either. We need informed analysis, with tech experts and competition and consumer officials, to identify the drivers of business developments, to balance the myriad issues that we all have as citizens, and voters, and shoppers, and then to act surgically when we see that a competition law problem of abuse of market power, or structural economic dependency, is causing real harm.

In essence, the FTC would be reviving through regulation a business model that consumers and third-party sellers rejected more than two decades ago. As Randy Picker has observed, not only might this make Amazon worse, but it might not even solve the problems the FTC wants to address:

If Amazon is creating private-label goods based on information it sees on its platform, nothing suggests that it is doing that particularly rapidly. And even if it is entering those markets, it still might do that were we to break up Amazon and separate the platform piece of Amazon (call it Amazon Platform) from the original first-party version of Amazon (say Amazon Classic) as traditional retailers have for a very, very long time been making buy-vs.-build decisions on their first-party inventory and using their internal information to make those decisions.

Ultimately, the groups that would bear the brunt of the FTC’s blunder would be consumers and—somewhat ironically—those same third-party sellers that the FTC claims to want to help.