Experts call out the FTC’s argument against Seller-Fulfilled Prime for what it is: “misleading” and “inaccurate”
In 2015, Amazon launched Seller Fulfilled Prime (“SFP”) to allow sellers on Amazon’s marketplace to offer Prime-badged goods to customers. Since then, Amazon has worked hard to lift the program’s performance to meet the bar that customers expect for Prime and has redesigned SFP’s requirements multiple times. Unfortunately, the program has consistently underperformed and delivered significantly slower to customers compared to Amazon’s in-house logistics. SFP reliably met the delivery estimates 95% of the time – but in 2018, just 16% of SFP orders in the U.S. met the two-day delivery promise.
The FTC is misrepresenting SFP’s slow reliability in 2018 to pretend the program was on par with Amazon’s fast reliability.
Here’s what experts are saying about the FTC’s faulty case against Seller-Fulfilled Prime:
– “FTC’s Prime complaint flubs facts,” says ProjectDisco. “Amazon relaunched the SFP program in 2023 with new measures in place to boost customer satisfaction with seller-fulfilled offers. Unlike how it is characterized by the FTC, SFP benefits both sellers and customers and no seller needs to participate or pay for services they do not want if it does not make sense for their individual business. Under the new SFP, more sellers of all sizes can benefit from the program.”
– They continue, noting that “the FTC’s complaint against Amazon ignores benefits, and misrepresents how Amazon’s SFP program works.” “The company supports more than a million businesses that sell on the site, and most of these sellers are SMBs – many of which choose to sell on Amazon because of the tools and services it offers to retailers. These services, such as FBA and Seller Fulfilled Prime (SFP) allow these SMBs to participate in a marketplace with a much greater number of customers than they could otherwise reach, while offloading many of the complexities that come with running an online retail business.”
– “As the FTC examines concentration in the digital economy, it is critical that antitrust considers all dimensions of competition and target behaviors that truly harm consumers,” urges Progressive Policy Institute (PPI) tech policy analyst, Malena Dailey. “While SFP sellers may reliably ship products, they do so at a much slower speed than is expected through FBA, which reliably ships products quickly. This important distinction highlights the fact that the Prime label comes with an expectation of quality, and by differentiating its offerings, Amazon consumers are less likely to encounter listings that misrepresent the products and services they are providing. With an estimated 2.3 million active sellers on the Amazon Marketplace, consumers benefit from assurances that the quality of their purchase will be as expected. Competition on ‘quality’ is a well-known concept and an important non-price dimension of competition.”
– “The FTC’s lawsuit against Amazon is already on shaky ground. Today, they are alleging, through selective release of the unredacted complaint, that Amazon is harming small businesses by requiring them to use Fulfillment-by-Amazon (FBA) to have Prime eligibility,” explains Carl Holshouser of Tech Net. “It’s clear that customers prefer two-day delivery. The FTC, by mischaracterizing the facts of this case and continuing their efforts to undermine consumer preferences, is once again undermining their own credibility. China loves it when we attack our own to help Shein grow!”
– An Amazon spokesperson called the FTC’s figures “misleading,” explaining that an improved version of SFP is now open to sellers. They continued, describing that previous versions of SFP were “far below the high standards and expectations our customers have for Prime.”
– Joseph Coniglio of the Information Technology and Innovation Foundation reminds us that Amazon offers fulfillment options to its sellers: “UPS? Oh that’s right, there’s also FedEx. And good old USPS. I had almost forgot that the FTC is going to have to somehow prove Amazon has market power in fulfillment for its ‘coercion’ claim to hold up.”
– The FTC does not understand that “even if *shipping * takes 2 days, if Fri orders aren’t *processed* til Mon, the consumer waits 4-5 days, not 2,” points out Geoff Manne of the International Center of Law and Economics. “This is just dissembling by the FTC. The delivery req’t wasn’t ‘set by AMZ.’ AMZ allowed SFP sellers to set delivery estimates *longer* than 2-day to get them ramped up in the program. As I understand it, *sellers* set delivery. Sure 95% met it. But how oft was it 2-day”?!?!”
– “So it appears Chair Khan and [the] FTC, ignoring the plain logic of Amazon’s protestations, are continuing to tell the public and the court that reliably slow delivery is the same as reliably fast delivery,” showcases the Antitrust Education Project. “Such a misrepresentation would be another indicator about the quality of the case Lina Khan is waging against Amazon. Her case is shoddy, rhetorical, lacking in economic analysis, and may be foisting a claim that is demonstrably untrue.”
Read more about the FTC’s faulty case against Amazon here, here, and here.