Amazon Market Dominance and Anti-Competitive Practices: Lessons for Bangladesh E-Commerce

A $2.5 Billion Settlement and What It Means Beyond America

In September 2025, Amazon agreed to pay $2.5 billion to settle Federal Trade Commission allegations — the largest FTC settlement in history. The case had been building since September 2023, when the FTC and 17 state attorneys general filed a lawsuit accusing Amazon of running an illegal monopoly through a web of anticompetitive tactics that punished sellers, degraded consumer search results, and locked out competitors. Amazon denied wrongdoing but agreed to the settlement before the case reached trial. The settlement did not end the scrutiny. A separate antitrust trial is still scheduled, and regulators in Europe are running parallel proceedings.

For Bangladesh, a country whose e-commerce sector crossed $7.5 billion in 2024 and is projected to reach $9.65 billion by 2029, the Amazon case is not just distant foreign news. It is a blueprint — both of what platform dominance looks like at scale, and of what regulatory failures allow it to entrench.

What Amazon Actually Did: The Three Mechanisms

The FTC's complaint detailed three interlocking tactics that, taken together, the agency argued constituted illegal monopolisation. The first was anti-discounting enforcement. Amazon's Competitive Monitoring Team scanned prices across thousands of competitor websites in real time. If a third-party seller offered their product cheaper elsewhere, Amazon's algorithm — called SC-FOD, or Select Competitor Featured Offer Disqualification — buried that seller in search results until they raised their prices on the competing platform. The Buy Box, which captures around 98 percent of purchases on Amazon, was withheld from sellers who undercut Amazon's pricing ecosystem.

The second mechanism was the forced bundling of Prime eligibility with Amazon's own fulfillment service. For a seller's product to qualify for Prime — functionally a requirement for meaningful sales — that seller had to use Fulfillment by Amazon (FBA). FBA is not cheap. By making its own logistics service a gateway to the platform's most valuable badge, Amazon made it substantially more expensive for sellers to operate simultaneously on competing platforms, effectively raising the cost of multi-homing.

The third was Project Nessie. This was an internal algorithm that predicted whether competitor platforms would mirror an Amazon price increase. When they were likely to follow, Amazon raised prices and sustained them at the higher level. Project Nessie reportedly generated over $1 billion in excess profits before Amazon quietly deactivated it. The FTC alleged that Amazon would turn it on and off during periods of heightened media scrutiny.

Bangladesh E-Commerce: A Market at the Inflection Point

Bangladesh's digital retail landscape in 2026 looks nothing like it did five years ago. The market grew at a CAGR of 11.2 percent between 2020 and 2024, reaching approximately $6.84 billion, and is forecast to grow at 6.8 percent annually through 2029. Card-based e-commerce transactions hit Tk 20.35 billion in February 2025, up 23.6 percent year-on-year, though cash-on-delivery still dominates for trust reasons. Internet penetration stands at 44.5 percent — meaning more than half the population remains offline and represents the next phase of growth.

The dominant platform is Daraz, owned by Alibaba Group. Daraz built its own logistics arm, Daraz Express (DEX), covering all 64 districts. Chaldal leads in online grocery. Pickaboo and Bikroy occupy electronics and classifieds. The sector supports tens of thousands of jobs directly, with projections of up to 500,000 additional roles over the next five years. But the market is still only 3 to 5 percent of total retail — which means the platform that wins the infrastructure race in the next decade will inherit an enormous market.

The lessons from Amazon's case apply with uncomfortable precision to Bangladesh's current trajectory. When Daraz — backed by Alibaba's resources — is the single largest high-tech investment in the local market, it is simultaneously the infrastructure provider, the marketplace operator, the logistics company, and the advertising platform. That structural overlap is exactly what the FTC described as the source of Amazon's monopoly power: control of the platform that sellers depend on, combined with a competing interest in which sellers succeed.

The Evaly Collapse and the Consumer Trust Problem

Bangladesh's e-commerce sector has already experienced a preview of what happens when platforms grow faster than the regulatory framework around them. Evaly, once the most hyped consumer platform in Bangladesh, collapsed in 2021 amid allegations of fraud, pyramid-scheme-like advance payment structures, and gross mismanagement of customer funds. E-Orange, Alesha Mart, and Dhamaka Shopping followed. Each collapse damaged consumer confidence, slowed digital payment adoption, and pushed buyers back to cash-on-delivery — the highest-cost, lowest-trust transaction model that still dominates the sector today.

The Evaly collapse was not a monopoly story — it was a fraud story. But it revealed the same regulatory gap that enabled Amazon's behaviour in the United States: the absence of real-time platform oversight, consumer protection mechanisms specific to online commerce, and enforceable seller protection rules. Bangladesh tightened its Digital Commerce Policy in the aftermath, and BTRC — the Bangladesh Telecommunication Regulatory Commission — has expanded its mandate in the digital space. But the policy infrastructure for platform dominance, as opposed to outright fraud, remains underdeveloped.

What BTRC and Policymakers Can Learn

The FTC's Amazon case took six years of investigation before it reached a complaint stage, and the settlement came two years after that. Bangladesh cannot wait for a Daraz or any future platform to grow to $500 billion in market capitalisation before asking hard questions about how marketplace rules are set, how seller pricing is monitored, and whether the logistics arm of a dominant platform should be treated as a shared public utility rather than a competitive advantage.

Three specific regulatory lessons translate directly. The first is transparency in algorithmic decision-making. Amazon's SC-FOD algorithm operated invisibly for years. Sellers did not know why they were losing the Buy Box. Bangladesh's e-commerce policy should require platforms above a certain market threshold to disclose how search ranking, product visibility, and promotional eligibility are determined — particularly where the platform also sells its own products.

The second lesson is separation of platform and logistics at scale. The EU's Digital Markets Act, enacted in 2022 and actively enforced from 2024, prohibits designated gatekeepers from preferencing their own services over third-party alternatives. Bangladesh is not yet at the scale that would trigger gatekeeper designation under European-style rules, but the framework — which places disclosure and fairness obligations on dominant platforms before they reach monopoly status — is exactly what should be built now, while the market is still competitive.

The third is seller protection. The FTC found that hundreds of thousands of American sellers were effectively trapped on Amazon because the cost of exiting was too high — not because Amazon's terms were freely chosen. Bangladesh's SMEs, which increasingly treat platforms like Daraz as their primary sales channel, face analogous dependencies. A seller protection framework — covering fees, contract terms, dispute resolution, and the right to sell simultaneously on competing platforms without algorithmic penalty — is not anti-market; it is what makes markets function.

VAT, Cross-Border Policy, and the Policy Gap

Bangladesh's e-commerce sector faces a paradox: the government raised VAT on platform commissions from 5 to 15 percent in recent years, a move that disproportionately burdens SMEs that cannot negotiate better terms and lack the scale to absorb margin compression. At the same time, no finalised cross-border e-commerce policy exists, leaving consumers unable to access global inventory and preventing government from collecting meaningful customs revenue on cross-border digital transactions.

These are not unrelated problems. An absence of coherent digital trade policy — covering domestic competition rules, platform transparency obligations, cross-border commerce frameworks, and seller protection standards — creates the conditions where the strongest platforms set their own rules. Amazon set its own rules in the United States for fifteen years before regulators caught up. Bangladesh has the opportunity to write those rules before a single platform becomes too large to constrain.

The Infrastructure Moment Bangladesh Cannot Afford to Miss

Bangladesh's e-commerce market is at the stage Amazon was in the early 2010s — past the fragile startup phase, past the first wave of consolidation, and entering the infrastructure-building phase where whoever builds the dominant logistics, payment, and discovery layer wins the next decade. Amazon built that layer without regulatory constraint and used it to lock out competition. Bangladesh's platforms are building it now.

The $2.5 billion FTC settlement is a retrospective penalty for fifteen years of unchecked platform power. The more useful number for Bangladesh is the six years it took the FTC to even file a complaint after it began investigating — six years during which Amazon's market position became more entrenched, its seller ecosystem more dependent, and its rivals more disadvantaged. Bangladesh's digital regulators do not have six years to wait. The time to build the framework is before the dominant platform is too important to the economy to challenge.

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