The Federal Trade Commission (FTC) is set to proceed with its antitrust suit against Amazon.com Inc (NASDAQ:AMZN) later this month, according to a report in the WSJ.
The recent meeting between the e-commerce giant's lawyers and agency officials failed to resolve the impasse. During the talks that took place last month, Amazon's legal team reportedly did not offer to make any concessions.
The FTC is now planning to file its lawsuit against Amazon later this month after conducting an investigation into various aspects of the company’s business practices, including concerns about whether the company gives preferential treatment to its own products on its platforms and how it treats external sellers on Amazon.com.
The incoming lawsuit is expected to target several of Amazon's business practices, including its Fulfillment by Amazon logistics program and the pricing strategies employed by third-party sellers on Amazon.com.
BofA analysts believe that a settlement is “unlikely”, however, they didn’t rule it out from happening.
“While we acknowledge the importance of Amazon’s 3P commission and advertising businesses (which potentially supplies 100%+ of Amazon’s retail profitability) and the potential headline risk due to a drawn out legal process, we think Street will see a tough road ahead for the FTC,” they wrote in a report commenting on the WSJ article.
“We see limited valuation multiple compression risk on a well-telegraphed lawsuit by the FTC; reiterate Buy on Amazon.”