Will the FTC Fight Amazon Over Hardware, Too?

Last week, the other shoe dropped as Apple joined Amazon as the defendant in a high-profile, high-stakes antitrust case. Much of the Department of Justice Apple matter revolves around how the company prevents competitors from accessing its hardware and software ecosystem, as evidenced by low penetration in some critical product categories.

Though the FTC’s case against Amazon centers around limiting price competition, through third-party seller restrictions, we wonder how likely Amazon’s retail power and success building a smart device brand will lead to another challenge, similar to Apple’s. We analyze Amazon’s highest-profile, most successful hardware product, Echo smart speakers. 

In the past five years, Echo has controlled about three-quarters of the US smart speaker market (Chart 1). It reached its highest share of 74% in the last year.