FTC Chair Lina Khan, however, moved to suspend the recommendation following settlement negotiations with Amazon, according to the report that cites people familiar with the matter.

Amazon and FTC did not immediately respond to Reuters' requests for comment.

Khan, an antitrust researcher focused on Big Tech's immense market power has been a vocal Amazon critic.

The FTC is currently probing Amazon as part of a series of ongoing investigations into Big Tech. It is also probing the company's planned purchase of U.S. movie studio MGM.

(Reporting by Eva Mathews in Bengaluru; Editing by Vinay Dwivedi)