Progressive former Federal Trade Commission (FTC) Chair Lina Khan’s lawsuit against Amazon is proving to be yet another misguided attack on a successful American business. At an economics-focused hearing last week, the FTC’s case appeared weak under the judge’s questioning, exposing its lack of economic reasoning, speculative claims and failure to define real consumer harm.
Rather than presenting a data-based argument rooted in the consumer welfare standard, the FTC relied on anecdotal evidence, hypothetical harms and contrived market definitions, all while ignoring how Amazon’s success is driven by the company’s innovations and consumer choice. Even the judge appeared skeptical, pressing the FTC for concrete proof of antitrust violations—evidence the agency simply did not have.
Where Is the Harm?
At the core of any antitrust case should be the fundamental principle of the consumer welfare standard. This legal principle requires the government to prove a company’s market power, abuse of that power and proof that the company’s actions resulted in demonstrable consumer harm.
Yet the FTC struggled to provide a clear or measurable way that Amazon’s business practices have led to higher prices, reduced selection or lower quality—the traditional evidence of antitrust harm.
The judge questioned the FTC on whether Amazon’s alleged conduct resulted in higher prices for shoppers, and the FTC couldn’t prove it. Instead, the agency leaned on opaque theories about how Amazon’s business might limit competition in ways that could harm consumers. But when pressed to show actual economic evidence proving that Amazon shoppers are paying more, the FTC came up empty.
The FTC additionally suggested that Amazon is slowly degrading the shopping experience in ways that consumers don’t notice, but this argument is completely at odds with reality. Amazon’s customer satisfaction ratings and Prime membership renewals remain high, and Amazon continues to expand its selection and lower prices through market-driven incentives.
The Struggle With Defining the Market
A cornerstone of the FTC’s case is its claim that Amazon holds power over two alleged markets: the “Online Superstore Market” and the “Online Marketplace Services Market.” But the FTC essentially invented these terms for this case without clearly defining them or paying enough attention to how the retail ecosystem actually works for consumers.
When the judge asked whether legal precedent or economic research supports these market definitions, the FTC admitted that it had invented them for litigation. The agency’s definitions are designed to conveniently exclude brick-and-mortar retailers, with which Amazon remains in fierce competition. While the lawsuit initially acknowledged competition with a few websites – Walmart.com, Target.com and eBay – the FTC last Friday indicated that it may argue Amazon has no rivals at all in being “the default, go-to store.”
Amazon rightfully pushed back, arguing that competition in online retail is dynamic, and consumers have many alternatives beyond Amazon. The reality is that Walmart, Target, Costco and even players like Best Buy, Wayfair and QVC actively compete for shoppers’ dollars.
Lack of Competition Facts
One of the biggest nails in the coffin of the FTC’s case is its failure to prove that Amazon’s business practices have harmed competition. The agency repeatedly dodged questions about whether it could reconstruct a competitive “but-for” world—meaning, it couldn’t explain how the market would look different if Amazon’s practices were changed or eliminated.
This case relies on a speculative theory that Amazon’s dominance prevents rivals from scaling up. But that claim is at odds with a reality in which existing retailers such as Overstock and Nordstrom have expanded into featuring third-party sellers, and new entrants like Shein are fiercely challenging incumbents. Amazon’s low prices, huge selection and fast delivery standards have made it attractive to its customers, not because it blocks competition, but because it offers good, reliable services.
The judge also highlighted the FTC’s failure to provide statistical evidence, questioning whether its case was built on anecdotes rather than hard data. Amazon’s response was clear: if the FTC cannot quantify actual harm, then this lawsuit is built on a sandy hill.
Hogan v. Amazon Further Weakens the FTC’s Case
Adding to the FTC’s troubles, the judge highlighted a separate class action lawsuit, Hogan v. Amazon, where private plaintiffs accused the company of anticompetitive behavior. This case has been previously thrown out at the District Court level, but the plaintiffs appealed to the Ninth Circuit. During oral arguments last week, the appellate judges expressed reservations about the clarity and coherence of the plaintiffs’ arguments. They took issue with several aspects of the case, but most notably on the definition of the market. One judge on the panel characterized the plaintiffs’ arguments as “muddled,” indicating concerns about their ability to articulate a clear legal theory.
At the economics hearing, the judge warned the FTC to pay attention to the outcome of Hogan, where similar claims are being litigated. If Amazon prevails in Hogan, it could deal a massive blow to this FTC case, reinforcing that Amazon is beneficial to both consumers and sellers.
How Competitive Is Retail?
Ultimately, the FTC’s case against Amazon is weak because it fails to define a realistic market, prove real-world harm or prove an abuse of market power. Competition isn’t about forcing all companies to have the same market share—it’s about allowing businesses to offer consumers the best products at the best prices in a free marketplace. That’s exactly what Amazon does, and that’s exactly why many Americans choose Amazon every day.
Most businesses in the U.S. – 99.9%, to be exact – are small businesses, and small business creation has exploded. According to data from the Bureau of Labor Statistics in 2024, there are over 1 million retail businesses in America. 83.7% of U.S. retail sales take place in physical stores—not online—and six in 10 customers frequent brick and mortar stores so they can see and touch items they are interested in.
The fact is that retail has proven to be a highly competitive and innovative industry, through new business models, products and services that benefit customers–both online and in stores.
Conclusion
The FTC’s case against Amazon lacks clear evidence of consumer harm, relies on manufactured market definitions and is built on speculative, progressive theories rather than economic facts. Amazon competes aggressively and offers its customers value. This case, born out of Lina Khan’s misguided war on American success, is yet another example of Biden administration overreach that will ultimately fail to hold up in court.
The outcome of this case will have significant ramifications for American retail and commerce. It must be based on principles of consumer welfare—not progressive theories that don’t hold weight with economics or market realities.