Internet commerce giant Amazon (NASDAQ:AMZN) is seeking the dismissal of the U.S. Federal Trade Commission’s (FTC) antitrust lawsuit against it. The company urged the federal court to dismiss the case, which accuses AMZN of utilizing illicit strategies to boost profits by harming consumers and suppressing competition.
The FTC claimed that Amazon significantly increased the fees imposed on sellers, resulting in the company taking nearly 50% of every dollar the average seller earns utilizing Amazon’s fulfillment service. In addition, Amazon has discreetly elevated prices for consumers through an initiative known as “Project Nessie.” This deliberate effort to inflate prices has already drained over a billion dollars from households across America, according to the FTC.
In its plea for dismissal, Amazon contends that the FTC has misinterpreted regular retail practices as anticompetitive conduct and has not produced any evidence of concrete harm to customers. Moreover, it stated that Nessie was discontinued in 2019 and emphasized that Amazon consistently matches the lowest prices offered by other companies, as a Reuters report highlighted.
While the trial’s outcome remains to be seen, let’s take a closer look at Amazon’s legal risks.
AMZN’s Risk Analysis
Amazon has a history of grappling with claims, litigation, and other proceedings involving competition and antitrust, consumer protection, labor and employment, and other matters.
As it is subject to evolving laws and regulations, TipRanks’ Risk Analysis tool shows that Amazon’s legal and regulatory risk exposure is significantly higher than the industry average. Legal and regulatory risks account for 25% of its total risks, higher than the industry average of 17.8%.
What Do Analysts Say About Amazon?
While AMZN’s legal and regulatory risks remain higher than the sector average, Wall Street maintains a bullish stance on the stock. With 42 unanimous Buys, Amazon stock has a Strong Buy consensus rating. Analysts’ average price target of $177 implies an upside potential of 20.07% from current levels.
