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Amazon Antitrust Paradox -Amazon found by Jeff Bezos in Bellevue, Washington, on July 5, 1994. The company start as an online marketplace for books but expand to sell electronics, software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization, In 2017, Amazon acquired Whole Foods Market for US$13.4 billion, which substantially increased its footprint as a physical retailer. In 2018, Amazon Prime had surpassed 100 million subscribers worldwide.
Despite its major success in the e-commerce market, there is a growing public awareness that Amazon has established itself as an essential part of the internet economy and that its dominance may pose hazards. The 2010 Horizontal Merger Guidelines. For example, acknowledge that enhanced market power can manifest as non-price harms. Including in the form of reduced product quality, reduced product variety, reduced service, or diminished innovation.
A major problem is the focus of antitrust laws on consumer welfare. Chicago School also focused on consumer welfare and was fairly criticized because goal of antitrust laws is market development and promoting competition. The Chicago School critique, which states that predatory Pricing is unlikely strategy, came to shape Supreme Court doctrine on predatory pricing. The depth and degree of this influence became apparent in Matsushita Electric Industrial Co. v. Zenith Radio Corp. , where court held that cutting prices is a part of competition.
There have some early developments in the US in the field of competition laws like the Sherman Act, Robinson Patman Act-1936. Clayton Act, which has upheld the Supreme Court many times, reiterating competition laws and antitrust principles. However, there has been no major progress and Amazon’s monopolistic practices have only increased over time.
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Amazon
It has established dominance as an online platform due to its willingness to sustain losses and invest aggressively at the expense of profits. And integration across multiple business lines. It is growing faster than e-commerce itself. In 2015, it earned $107 billion in revenue. And, as of 2013, it sold more than its next twelve online competitors combined.[1]
It has adopted aggressive and forceful techniques many times, for its growth. The clearest example of how the company leverages its power across online businesses is Amazon Marketplace. Where third-party retailers sell their wares. Since Amazon commands a large share of e-commerce traffic. Many smaller merchants find it necessary to use its site to draw buyers.
Apart from the competition regime, the labor policies of Amazon have also been criticizing. In June 2020, it is criticized by underpaid workers citing unhealthy working conditions during the pandemic. During the black lives matter protests, the company is accused of maintaining the status quo while promoting the movement. The unique monopoly that Amazon enjoys in the e-commerce sector. Has led to the exploitation of small merchants, businesses, and its own employees.
Current laws underappreciate the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. There is a need to revise the competition laws and policies. And center them around anti-competitive implications rather than consumer welfare.
Reference
[1] Allison Enright, Amazon Sales Climb 22% in Q4 and 20% in 2o15, INTERNET RETAILER (Jan.28, 2016, 4:o6 PM), http://www.internetretailer.com/2016/ol/28/amazon-sales-climb-22 -q4-and-20-2015 [http://perma.cc/N6S3-XTSB].
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