➡️ Post | Profile | Read the full article

⚡️🇺🇸 Could the FTC end Amazon's dominance in ecommerce?

According to Politico, the Federal Trade Commission (FTC) is finalising its long-awaited antitrust lawsuit against #Amazon.

The exact details of the lawsuit remain undisclosed. But it's rumoured that Amazon faces scrutiny for:

❌ Tricking shoppers to sign up for Prime
❌ Forcing sellers that use its FBA logistics service
❌ Using Advertising as a tax to improve on-site visibility

The lawsuit holds the potential to force Amazon to change its core business model. Or even break up the company.

Shares of Amazon were down almost 2% in after-market trading.

-- Analysis --

While the FTC lawsuit poses a significant threat to Amazon's business model, its outcome remains uncertain.

The lawsuit will take years to complete and allow Amazon to sufficiently prepare for any potential outcome.

However, if Amazon is forced to split its Advertising or 3P Seller business, the online retailer must find new ways to cross-fund its less profitable retail division.

Which could mean that the FTC lawsuit will not only disrupt Amazon's business model.

🚨 But also that of its 1P and 3P suppliers.

Because if Amazon is no longer able to cross-fund its less profitable retail business through Advertising, AWS, and other profit centres...

... suppliers will have to give up a larger share of their profits to directly contribute to Amazon's retail model.