Lina Khan is suing Amazon. Booksellers want to join in the fight against one of their biggest competitors, claiming that the online retailer undercuts their pricing. You would think that Khan would happily add the booksellers to her case. Think again. 

In an ironic twist of fate, the booksellers both help and hurt her case. Now, this Federal Trade Commission Chairman is in the tricky position of trying to keep the booksellers from sinking her tough case. 

While the booksellers are a pesky nuisance to Khan, their argument is a welcome wrinkle to those who view Khan’s actions as overreaching, destructive, and potentially harmful to market competition and consumers.

What happened

Last year, the FTC filed a massive lawsuit against Amazon, claiming that, as a monopoly, it manipulates prices. The case is scheduled to go to trial in 2026.

The American Booksellers want to intervene in the case and team up with the FTC. They believe that Amazon unfairly uses its size to negotiate better deals with publishers. As a result, they can sell books at lower prices than independent book sellers. So, they struggle to compete with Amazon’s lower prices, where consumers flock to save a buck.

The problem is that the argument contradicts the FTC’s claims about Amazon in its lawsuit. The FTC claims that Amazon’s monopoly power enables the company to charge more for books to pad its bottom line by $57 million in 2018, for example. Khan has told a federal court that the booksellers should bring a completely different lawsuit.

So which is it? Is Amazon saving consumers money by offering books at low prices, as the independent booksellers claim, or by raising prices, as the FTC claims?

A Bloomberg tech writer argues that both can be true.

The company has used different strategies to enter various product areas and train shoppers to buy things online that they would usually get at a store. And Amazon can dial prices up and down depending on what kind of competition it faces in the moment. 

However, that may not be the case. First, the bookseller acknowledged that Amazon is not the only retailer selling books in the digital town. They are also competing against Walmart. Target and other stores. Perhaps their gripe is that Amazon was started as a way to sell college books cheaply and blossomed into a virtual online mall that can sell everything from toilet paper to lettuce and deliver your GrubHub order now too. 

The biggest problem for Khan is that she has to demonstrate consumer harm to prove antitrust violations. Where is the harm in consumers paying less for books?

As the Wall Street Journal’s editorial board commented:

Ms. Khan essentially agreed with the booksellers in her ballyhooed 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox.” She then argued that Amazon unfairly undercuts small competitors by “deeply cutting prices.” Her switcheroo now amounts to a concession that reducing prices isn’t a violation of modern antitrust law, which prioritizes consumer welfare.

Why It Matters

This case matters because Lina Khan aims to overturn the consumer welfare standard, the long-standing standard for determining whether companies breach antitrust law—or are monopolies. Under this standard, economic data is analyzed to determine if business practices or mergers will raise prices, reduce output, or stifle innovation.

Khan and others would rather use antitrust laws to advance other radical policies and social agendas. 

The Federal Trade Commission, under chairman Lina Khan, has taken an aggressive stance against Big Tech motivated by the desire to break it up. 

Khan, who fashions herself a David against Goliaths, has sued Amazon, Google, and many others, as well as intervened to stop big mergers and acquisitions. So far, Khan has lost more cases than she’s won. 

Time may be running out on her campaign to remake antitrust law, as her leadership may come to an end if her boss does not win re-election.

Bottom Line

At the end of the day, antitrust law and enforcement should focus solely on protecting consumers, not empowering bureaucrats with an axe to grind to remake the economy as they see fit.