Amazon seeks recusal of FTC's Khan in investigations involving the company

World's largest online retailer says the antitrust regulator is a critic of Big Tech and has ‘already made up her mind’

On June 30, 2021 Amazon petitioned the US Federal Trade Commission a key regulatory agency to have its leader Lina Khan to be left out of any antitrust matters involving the company, arguing she is biased against the company. AFPShow less

Amazon filed a petition requesting for the recusal of the US Federal Trade Commission’s Chairwoman Lina Khan from any anti-trust probes against the company, citing her past criticisms of the e-commerce giant.

The Seattle-based company said Ms Khan could not consider the company’s anti-trust defences with an “open mind”, given her previous condemnation of the retailer as a “threat to competition” on various platforms, according to the 25-page motion filed with the agency on Wednesday.

“Given her long track record of detailed pronouncements about Amazon and her repeated proclamations that Amazon has violated the anti-trust laws, a reasonable observer would conclude that she no longer can consider the company’s anti-trust defences with an open mind.”

“Indeed, doing so would require her to repudiate the years of writings and statements that are at the foundation of her professional career,” Amazon said.

Columbia Law School professor Ms Khan was confirmed to the FTC last month after the Senate approved her appointment with a vote of 69-28. In March, the US President Joe Biden nominated her to serve as a FTC commissioner.

“She [Ms Khan] has on numerous occasions argued that Amazon is guilty of anti-trust violations and should be broken up … concerns are all the greater now that she has been designated chair, a role in which she will direct agency staff and run the agency on a day-to-day basis,” Amazon said.

“In the absence of recusal, she will be directly involved in … and will exercise direct supervisory authority over virtually all aspects of any investigation of Amazon as well as any prosecutorial or adjudicatory decisions relating to the company,” it added.

Amazon, the world’s largest online retailer, controls between 50 per cent and 70 per cent of online retail sales in the US. Its first-quarter revenue this year rose 44 per cent to $108.5 billion as the Covid-19 pandemic boosted online shopping globally.

Amazon’s move comes as the company faces multiple anti-trust probes in the US and Europe.

In May, it was sued by the office of the Attorney General of Washington, DC, for reportedly using its dominant market position to stifle competition from other platforms such as eBay, Walmart and even the websites of third-party sellers.

Last November, the European Commission said the company breached European anti-trust rules by using independent sellers’ data for its own benefit.

The FTC is already investigating its treatment of third-party sellers. It is also reviewing its proposed purchase of the Metro-Goldwyn-Mayer movie company for $8.45bn. The takeover is Amazon’s biggest acquisition since it agreed to buy Whole Foods in 2017 for $13.7bn but follows investments of about $11bn on content for its streaming video and music services last year alone.

Ms Khan hit the headlines in anti-trust circles with her 2017 Yale Law Journal article, “Amazon’s antitrust Paradox”. The 96-page article, which she wrote while still a Law student, censured the US anti-trust framework. It argued that that current regulations are not sufficient to control big technology companies such as Amazon.

“Her article claimed that Amazon has committed numerous anti-trust violations. This publication has solidified chair Khan’s public stature as Amazon’s adversary-in-chief,” Amazon said in its petition.

“These statements convey to any reasonable observer the clear impression that she has already made up her mind about many material facts relevant to Amazon’s anti-trust culpability … she has publicly affirmed those conclusions not only as a legal scholar, but also as an advocate for an anti-trust advocacy group and then as lead author of a major congressional report.”

Amazon did not respond immediately to The National’s request for comments.

“Amazon should be scrutinised along with all large organisations. However, even large companies have the right to an impartial investigation,” Amazon spokesman Jack Evans said in a statement provided to CNBC.

“Chair Khan’s body of work and public statements demonstrate that she has prejudged the outcome of matters the FTC may examine during her term and, under established law, preclude her from participating in such matters,” added Mr Evans.

Amazon said Ms Khan has already made “factual and legal judgments” regarding the company and anti-trust issues. The FTC, under her leadership, would not be a “neutral and impartial evaluator” in any anti-trust investigation against Amazon.

“Chair Khan’s public statements show that she has publicly declared firm factual and legal conclusions that Amazon’s business practices are anti-competitive, that the company should be held liable for anti-trust violations, and that it should be subject to extraordinary anti-trust remedies,” the company added.