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Antitrust Case Analysis

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Antitrust Case Analysis

Main Antitrust Statutes

Antitrust laws are the laws of competition as they prohibit business practices that

unreasonably deprive consumers by protecting consumers and ensuring that an open-market

economy has fair competition. As such, the would-be monopolies are guarded against and

disruptions made to productive ebb and flow of competition are also guarded vigilantly. The

Sherman Anti-Trust Act of 1890, the Federal Trade Commission Act, and the Clayton Antitrust

Act are the major Federal Antitrust laws in the United States.

The Sherman Anti-Trust Act is the principal law expressing the commitment of the

nation to a free market economy (Department of Justice, n.d.). As such, competition becomes

free from governmental and private restraints leads best consumers results. In this Act, all

combinations, contracts, and conspiracies are outlawed as they are unreasonably retrained by

interstate and foreign trade. It becomes a crime for interstate commerce to be monopolized.

Secondly, the Clayton Act is a civil statute prohibiting acquisitions or mergers likely to lessen

competition or even prevent discriminatory prices, allowances and services in dealings between

merchants (Department of Justice, n.d.). Lastly, the Federal Trade Commission Act bans unfair

competition methods or the deceptive acts or practices in interstate commerce, but no criminal

penalties are carried. In this statute, the Federal Trade Commission was also created to police

violations of the Act.

A Brief Overview of the Particulars of the Case

In the Matter of Amazon.com, Inc. and Amazon Logistics, Inc., they are charged with

failing to pay Amazon Flex drivers’ full amounts of their tips as received from their customers
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over a period of two and a half years. The administrative complaint filed by the Federal Trade

Commission (FTC) was keen to note that the drivers that enrolled in the Flex program were

going to receive an hourly pay of between $18 and 25 upon making delivering to customers

(FTC, 2021). The advertisements were clear and statements such as: “You will receive 100% of

the tips you earn while delivering with Amazon Flex” were indicated. According to FTC’s

complaint, Amazon had assured their customers that any of the tips would be directed to their

drivers 100%, which they failed to perform. In fact, they violated the provision of the FTC Act

by failing to pay their drivers 100% of the tip and instead channeled the amount to subsidize

payments to their drivers. In the process, saving millions of dollars for the corporation at the

expense of their drivers. It is a violation as Amazon concealed the amount customers tipped

drivers for their deliveries. From 2016 through to late 2016, the Amazon Flex program was keen

to deliver on their advertised promise to drivers who enrolled and fully represented the drivers

and displayed to them the amount customers tipped them.

In the late 2016, however, changes were made to the Flex program by Amazon that

reduced its costs and “variable base pay” approach was implemented on a rolling basis across the

country in several of its locations. In secret, the approach enabled Amazon reduce its own

contributions to its drivers by using an algorithmically set, internal “base rate” using collected

data about an area’s average tip amount. Variations of the base rate were by location and even

within the same market, and often it came below the $18-25 per hour range promised by Amazon

at the time of enrollment and in specific block offers (FTC, 2021). As such, Amazon preferred to

use this approach because it treated the bottom range as its guaranteed minimum payment and

the minimum was met by using drivers’ tips. This was attained by Amazon in their App as they

combined the base rate and tip of the customer to give a total of a driver’s earnings. In doing so,
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the App failed to separate driver’s amount and customer tip. Such unlawful practice was in

contradiction of Amazon’s representation to the expectations of their drivers and consumers’.

The efforts of Amazon of concealing their unlawful practice reveals that they did not seek the

consent of their driver’s when instituting the variable base pay. The discussions were done

internally and when drivers inquired about their reduced compensation, Amazon chose to

respond only to individual drivers who questioned the change. The new compensation policies

was changed by Amazon and the questions were given canned responses prepared by the

organization (FTC, 2021).

Impact of the Case on the Law and Power Brokers

The Federal Trade Commission Act law has been impacted negatively by this case as it is

in violation with all its policies. As such, it will need to be further defined to avoid a repeat of the

same in the future by other business entities. The power brokers are also impacted negatively as

they will need to convince the drivers enrolled in the Flex program that Amazon, their employer,

is not engaging in unlawful practices. Rather, show the transparency present in the company by

revealing to the drivers the books with all tips recorded, which is not going to happen because

Amazon has gone against their promise.

Concerns Regarding the Case in the Role of a Health Care Leader

The case raises concerns over how health care leaders play their role when it comes to

achieving high performance and enhancing the capabilities of their employees, which improves

on their quality of outcomes and care. Health care organizations (HCOs) have advanced

procedures and different resources; thus, making them large and complex contemporary

organizations. Therefore, health care leaders need to manage uncertainty and foster behavioral

and cultural changes. As such, leadership need to collaborate with its workforce to help in
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providing their patients with high quality care that is accessible, efficient, equitable, effective,

patient-centered, and safe. Furthermore, the role of health care leaders is evolving and will

require them to employ strategic management as it is responsive to technological, political,

economic, and societal changes, which are essential in strengthening the health system (Ginter et

al., 2018).
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References

Department of Justice. (n.d.). Antitrust enforcement and the consumer.

https://www.justice.gov/atr/file/800691/download

Federal Trade Commission [FTC]. (2021, Jun. 10). Amazon Flex.

https://www.ftc.gov/enforcement/cases-proceedings/1923123/amazon-flex

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care

organizations. John Wiley &Sons.