What to Watch as Lina Khan Finally Takes on Amazon

Lina Khan, the F.T.C. chair, takes her first big swing at Amazon.Credit…Tom Brenner for The New York Times

A battle over Amazon’s dominance

Lina Khan’s career has come full circle. The F.T.C., which she chairs, and 17 states sued Amazon on Tuesday, accusing the tech giant of using illegal practices to maintain its monopoly position in e-commerce.

The toll was swift: Shares in Amazon fell 4 percent, wiping about $50 billion off its market value. The case is being closely watched as a real-life test of the legal theories Khan outlined in a 2017 research paper on Amazon that challenged the fundamentals of antitrust policy.

The F.T.C. says Amazon harms rivals, sellers and consumers. The agency contends that the company stifles competition on price, product selection and quality, and that its policies prevent rivals from attracting new customers.

Khan stopped short of calling for Amazon to be broken up, but wants the company to stop effectively forcing merchants to pay its rates and use its advertising and logistics services. “Amazon’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers,” the F.T.C. said.

Amazon denies the charges and says an F.T.C. victory would weaken the market. The company, which has tried to get Khan recused from antitrust cases pertaining to it, said the case shows the agency has veered from its mission to protect consumers and competition. “The F.T.C. has it backwards and if they were successful in this lawsuit, the result would be anticompetitive and anti-consumer,” said David Zapolsky, Amazon’s global counsel.

The fight has been a long time coming. Khan argued in “Amazon’s Antitrust Paradox,” the paper published when she was still a law student, that competition law’s focus on consumer prices was outdated in an era of big tech platforms. She contended that Amazon’s cheap-pricing strategy was anticompetitive because it enabled the company to amass market share and helped it dominate the infrastructure on which other merchants relied.

The case will hinge on how a market is defined. Amazon says it represents a tiny fraction of the retail sector if brick-and-mortar stores are included. But the F.T.C. defines the market as “online superstores,” a narrower category of e-commerce companies.

What next? Some legal experts say the F.T.C. will have a tough task proving its case in court. Doug Melamed, a scholar-in-residence at Stanford Law School who used to work at the Justice Department’s antitrust division, said he didn’t expect Amazon to win on the definition of a market, but he predicted a long legal fight.

“The allegedly illegal conduct will be hotly contested,” he told DealBook. “Both what they did and whether it is illegal.”


The September stock market swoon worsens. S&P 500 futures were up modestly this morning — but after a sharp drop on Tuesday that left the index down more than 5 percent for the month. Investors are concerned about the Fed’s interest rate policy and the prospect of a government shutdown. All eyes are on the House, after the Senate reached a stopgap spending deal on Tuesday.

A judge rules Donald Trump committed fraud by inflating the value of his businesses. The surprising decision in New York State’s lawsuit against the former president could strip him of control over signature properties including Trump Tower and his golf club in Westchester. The trial in the case, filed by the New York attorney general Letitia James, is scheduled to begin as early as Monday.

McKinsey agrees to pay an additional $230 million to settle opioid suits. The move by the consulting firm, which has already paid more than $640 million to resolve claims over its work advising the OxyContin maker Purdue Pharma, is meant to resolve lawsuits by hundreds of local governments and school districts.

Apple takes the stand in Google’s antitrust case

In the Biden administration’s other big antitrust case against Big Tech, new details emerged on Tuesday on how Google clinched one of the most lucrative pieces of virtual real estate in the tech world: a deal to make it the default search engine for Apple’s Safari browser on billions of devices, including iPhones and iPads.

Eddy Cue, Apple’s top dealmaker, helped broker the agreement with Google, which the government says helped the search company establish a monopoly and build an online advertising juggernaut. Analysts at Bernstein, a research firm, estimate that Google will pay Apple about $19 billion this year for the search contract.

Here are three takeaways from Cue’s testimony:

  • Cue said that Google won the contract because Apple picked the “best” search engine, while allowing customers to easily switch. He added that there “wasn’t a valid alternative.”

  • When the two tech giants renegotiated their deal in 2016, Cue felt Apple “deserved” to be paid a higher percentage of the revenue Google derived from search via Apple’s devices and browser. “It was the right thing and the fair thing for us” to demand better terms, Cue said. In an email to Tim Cook, Apple’s C.E.O., he wrote that the company couldn’t proceed with Google if it didn’t agree to a better deal. But he testified that Apple never seriously considered what it would do if it didn’t come to an agreement with Google.

  • Cue referred to Apple’s philosophy around product design, which involves not bogging the consumer down with too many choices. “The more choices or the more options that you get, it frustrates customers,” Cue said.

JPMorgan moves to end its Epstein travails

JPMorgan Chase’s $75 million settlement with the U.S. Virgin Islands over claims that the bank abetted crimes by Jeffrey Epstein, as well as a separate deal with a former top executive, Jes Staley, appears to wrap up its legal battles over the convicted sex offender, who died by suicide in 2019.

The agreement is the latest sign of how deeply ensnared top institutions and figures were in the Epstein case — and how much it has cost them in money and reputation.

JPMorgan has now paid out $365 million in legal settlements related to Epstein, who was a client of the bank until 2013 — years after the financier had pleaded guilty to soliciting prostitution from a teenage girl. The bank had already paid $290 million to nearly 200 victims of Epstein, who had a private residence in the Virgin Islands.

JPMorgan executives have insisted that they weren’t aware of Epstein’s crimes, though victims had accused the bank of repeatedly ignoring red flags about the financier so it could keep him as a client. When it announced the settlements on Tuesday, the bank didn’t admit any liability but repeated that it “deeply regrets any association” with Epstein.

JPMorgan had sued Staley over his efforts to keep Epstein as a client. Terms of their settlement weren’t disclosed; the bank had been seeking reimbursement for some litigation-related costs.

The total amount earmarked for Epstein-related settlements has grown to over $700 million, including proceeds from sales of his estate. This spring, Deutsche Bank, which took Epstein on as a client after he was dropped by JPMorgan, agreed to settle victims’ claims for $75 million. And the private equity mogul Leon Black, who had decades-long business and social ties to the disgraced financier, paid $62.5 million in July to settle claims by the Virgin Islands.

“Sam will never speak an untruth. It’s just not in him.”

Barbara Fried, the Stanford Law School professor and mother of Sam Bankman-Fried, the founder of the failed crypto exchange FTX who is awaiting a criminal fraud trial next month. She and her husband, Joseph Bankman, told The New Yorker that they have spent “substantially everything we have” on the defense of their son. Meanwhile, since the collapse of FTX, the crypto industry’s lobbyists have found it harder to gain access to the corridors of power in Washington.

“Let’s keep going,” President Biden told striking U.A.W. workers.Credit…Pete Marovich for The New York Times

Organized labor flexes its muscles

Donald Trump is set to address union members in Michigan on Wednesday, a day after President Biden became the first U.S. leader to walk a picket line. “Let’s keep going,” Biden told U.A.W. workers, who are on strike against the big three Detroit automakers.

The dueling appearances underscore the strength of organized labor and the value of its votes, as a major union in Las Vegas moved closer to a strike and the Writers Guild of America unveiled more details of its deal with Hollywood studios.

“You deserve what you’ve earned,” Biden told U.A.W. members, “and you’ve earned a hell of a lot more than you get paid now.” The president squarely aligned himself with autoworkers, including their demand for a 40 percent pay raise.

Trump will court that same demographic today in hopes of wiping out Democrats’ slim hold on Michigan, which Biden won by 2.8 percentage points in 2020.

Meanwhile, another politically potent union is moving toward a walkout. Hospitality workers in Las Vegas voted overwhelmingly to authorize a strike against the city’s major resorts, potentially leading to an economically crippling work stoppage ahead of big sports events.

If a strike happens, there may be pressure on Biden to weigh in there as well: He won the state in 2020 by just 2.4 points.

The W.G.A. has officially ended its strike, after the union’s leadership approved the tentative agreement with major studios. It also gave more information about what’s in the proposed contract, which must still be ratified by its 11,000 members:

  • Series ordered for at least six episodes must employ at least six writers. (Exceptions were made for shows written by a single writer, like HBO’s “The White Lotus.”)

  • Studios must now pay bonuses for made-for-streaming shows and movies based on how many domestic subscribers watch a program.

  • And the W.G.A. won guardrails on how studios can use artificial intelligence, including a ban on A.I.-written material being used to undermine writers’ credits. (Studios can still train A.I. models on writers’ work, however.)

Writers appear to have gotten much of what they had sought from studios — but it’s not clear if those gains will hold up if the streaming business takes a downturn.



  • Liberty Media proposed a complex deal to spin off a division that holds its 83 percent stake in SiriusXM. (Bloomberg)

  • Guy Metcalfe, one of Morgan Stanley’s top real estate investment bankers who worked on over $850 billion worth of deals, is retiring. (Bloomberg)


  • Why America is at risk of losing its last triple-A credit rating. (Axios)

  • Chinese authorities have reportedly placed Hui Ka Yan, the billionaire chairman of China Evergrande Group, under police control. (Bloomberg)

Best of the rest

  • “Behind Ozempic Media Buzz, Undisclosed Drugmaker Money” (Lee Fang)

  • Co-authors of a paper touting the discovery of a new kind of superconductor have asked the journal Nature to retract the study, accusing the lead researcher of misrepresenting their findings. (WSJ)

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