E-commerce giant Amazon (NASDAQ:AMZN) is expected to face a potential antitrust lawsuit from the Federal Trade Commission (FTC) as early as this month, as per The Wall Street Journal. Last month, AMZN’s legal team and three of the FTC commissioners met over a video call but failed to reach a settlement over the FTC’s claims.
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It is worth mentioning that such meetings with the FTC provide companies with an opportunity to make some changes to their business practices as a means to settle antitrust claims. These meetings represent a final chance to resolve such cases without resorting to legal action in court.
During the meeting, Amazon’s team reportedly conveyed that any proposed changes to its business practices might lead to higher prices and longer delivery times for customers.
FTC’s Potential Lawsuit
Amazon has been on the FTC’s watchlist for a long time. The agency finds several of Amazon’s practices anti-competitive, including its marketplace, Prime subscription service, and cloud computing. Furthermore, Amazon is facing scrutiny for giving preferential treatment to its own products on its marketplace at the expense of third-party sellers.
The lawsuit will focus on AMZN’s logistics initiative, Fulfillment by Amazon, and pricing strategies employed by third-party sellers. It is possible that the agency may propose solutions that could lead to the company’s breakup.
Is Amazon a Buy, Hold, or Sell?
The promising potential of Amazon Web Services (AWS) on the back of emerging opportunities in generative AI and rising consumer spending bodes well for its e-commerce business. These factors keep analysts bullish on the stock.
AMZN stock commands a Strong Buy consensus rating based on 40 Buys and one Hold assigned in the past three months. On top of that, the 12-month average price target of $175.63 per share implies an 27.9% upside potential. Shares of the company have already gained 60% so far in 2023.
