Amazon vs. Silicon Valley: The FTC’s lawsuit against Ms. Khan is aimed at preventing a reoccurrence

It’s due largely to Ms. Khan, 34, that imposing major changes on the retailer is even thinkable. She was so much like Mr Bezos that I thought she understood him after interviewing her and those around her. Few people can see possibilities unseen by others and successful work towards them requires others to join along the way. They both shared these attributes.

These two very different philosophies, each pushed by an outsider unafraid of taking risks, at last have their much-anticipated confrontation. The Federal Trade Commission’s new leader, Ms. Khan, filed a lawsuit against Amazon on Tuesday. The suit accused Amazon of using unfair and illegal tactics to maintain its power. The suit was wrong on the facts, according to Amazon.

Silicon Valley spent the summer transfixed by the prospect of Elon Musk and Mark Zuckerberg literally fighting each other, despite the odds of this actually happening being near zero. Ms. Khan and Mr. Bezos are in a courtroom fight that could have implications for other companies and organizations.

Lina Khan rose to prominence in law school after she wrote a scholarly article in 2017 arguing for the breakup of Amazon – she compared the tech giant to the oil barons and railroad monopolies of more than a century ago. She is the chair of the Federal Trade Commission, which is a watchdog for corporations.

Khan said that the suit isn’t asking for the break up of Amazon and that it doesn’t exactly mirror her famous article. It’s about bringing more competition, she said, so that rivals and consumers are operating in a fair marketplace.

“This complaint is focused on establishing liability,” Khan said. “Ultimately, any relief needs to stop the illegal tactics, prevent a reoccurrence and fully restore competition.”

The fees on the site are so high that roughly half of the seller’s revenue goes to the company. She said the FTC’s lawsuit is about changing that.

If you put a lower price somewhere else, you will basically disappear from Amazon’s storefront. “Given the significant shopper traffic on Amazon, if Amazon makes you disappear from the storefront, that can be quite fatal for your business.”

According to Amazon, around 60 percent of the items sold on the site are third-party sellers. Many sellers say Amazon is so dominant in online retail that it’s hard to sell anywhere else — so they stay there despite high fees.