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As political momentum builds in favor of antitrust investigations of big tech companies, Amazon has held up a statistic in a seemingly preemptive gesture: about 90 percent of retail sales continue to be through brick-and-mortar.  

But framing it around a company’s place in the broader retail industry is unlikely to persuade enforcers, whose job is to precisely delineate the product market or geographical areas companies operate in, antitrust experts said. They do this by looking into where a company operates, and what its consumers consider to be substitutes for its products and services.      

“Saying that a law firm in Memphis has only 1 percent of the overall bankruptcy business would not be very meaningful if it was the only bankruptcy firm in Memphis,” said Doug Melamed, a professor at Stanford Law School, and a former acting chief of the Department of Justice’s antitrust division. 

“Simply saying we are [a small percentage] has some rhetorical value, but it doesn’t answer the antitrust question: what are the relevant markets in which Amazon does business?” he said. 

The company and its tech peers face scrutiny from lawmakers, regulators and even competitors. In a lawsuit filed Wednesday in California federal court, eBay Inc. claimed that certain Amazon managers had conspired to steal away sellers by deploying Amazon sales representatives to “infiltrate” eBay’s member e-mail system. 

“The defendants and other Amazon managers trained sales representatives on how to solicit eBay sellers using the M2M [e-mail] system — referred to internally as ‘prospecting’ — and instructed sales representatives to open eBay accounts if they did not already have them, so that the representatives could get access to the M2M system,” eBay said in its complaint, which names three Amazon managers as defendants.

Amazon did not immediately respond to requests for comment Thursday. 

Meanwhile, regulators have focused on pinning down Amazon’s size. After a hearing in July, the House Subcommittee on Antitrust, Commercial and Administrative Law asked Amazon to answer follow-up questions, including what percentage it represents of the U.S. online retail market. In March, Democratic presidential candidate Elizabeth Warren revealed her plan to break up large tech companies including Amazon, citing a CNBC report last year that Amazon would have nearly half the e-commerce market in the U.S. 

The Federal Trade Commission, which shares oversight of antitrust issues with the DOJ, created a task force in February to oversee technology companies. An FTC spokeswoman declined to comment Thursday on the agency’s reported role in inquiring into Amazon.  

Antitrust inquiries typically revolve around trying to define what the company is selling, what its market is and where it stands, and whether the company engaged in any anticompetitive practices, experts said. 

“Does e-commerce really compete perfectly with a brick-and-mortar store?” said Susan Beth Farmer, a professor at Pennsylvania State University Law School, and a former antitrust law enforcement attorney at the New York attorney general’s office. “It’s really important whether the definition of its market is all retail sales, or just e-commerce sales, because that will have an important part in ascertaining Amazon’s share.”

In some cases, the question of what the product is could itself trip up regulators. Amazon’s retail business is its largest and makes up some 80 percent of the giant’s total revenues, according to the company. But the company is more than just a retailer, as it also functions as an online distribution platform for other companies and has its hands in a range of businesses, including media production, according to a 2017 Yale Law Journal paper by Lina Khan, an academic fellow at Columbia Law School. 

The company’s wide-ranging businesses and online offerings could open it up to potential questions about what Amazon’s “product” really is from an antitrust perspective. Arguably, it could even be Amazon’s service of mediating consumers’ overall online experience, said Salil Mehra, professor at the Temple University Beasley School of Law, and a former trial attorney at the DOJ’s antitrust division. 

“What does it mean to be a platform? That’s the kind of question that’s a novel one in antitrust, I don’t know how the FTC is going to approach it,” he said. “I don’t know how the FTC is going to look at the fact that Prime is not just a buying program, for example. It includes a bundle of other things like Prime video.” 

Warren wrote in March that her plan would focus on breaking up companies with an eye toward preventing them from smothering competition and having too much political power. She wrote that such goals could be accomplished partly by revisiting mergers and acquisitions, such as Amazon’s $14 billion purchase of Whole Foods in 2017, and unraveling them if they are found to be anticompetitive. 

But mostly, existing U.S. antitrust laws are not designed to target companies simply for being large, a view that courts that have considered the question have long affirmed. In a 1945 case involving the Aluminum Co. of America, the Second Circuit ruled that “the successful competitor, having been urged to compete, must not be turned upon when he wins.”  

“When companies have a large amount of money and a good deal of economic and political power, is that illegal? Not under American antitrust laws,” said Farmer. “Whether or not that should be, that’s a different question altogether.”

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