Jeff Bezos: "Alexa, buy me something from Whole Foods."
Alexa: "Sure, Jeff. Buying Whole Foods now."
Jeff Bezos: "WHA- ahh go ahead."
after the revolution we'll just nationalize Amazon and our distribution problems will be solved [...] alternative, of course, a monstrous, extremely unequal, neo-feudalist surveillance state
Amazon isn’t yet a monopoly on the scale of Standard Oil, which at one point controlled 90% of US oil refining. But massive tech companies like Amazon and Alphabet (née Google) have a similar impact (paywall), warping the US economy by swallowing up competitors, choking off access to their platforms, and fueling income inequality. Their immense size and the concentrations of wealth they produce is making policymakers nervous, and a backlash of some form may be brewing. Calls for regulators to check the power of the new tech giants are beginning to grow louder.
Just consider the numbers. According to New York Times figures for the US, Amazon now accounts for 43% of all online retail sales; half of all online shopping searches start on Amazon (eat your heart out, Google); in 2016, the company had revenues of $63bn from online sales – which is more than the next top 10 online retailers combined; it controls 74% of ebook sales, and is soon set to become the biggest clothing retailer in the US. AWS, for its part, has become a $10bn annual revenue business with more than 50% of big companies preferring it to rivals – market share is expected to reach 64% in three years.
By any common-sense yardstick, therefore, Amazon wields monopoly power and its activities should trigger action by regulators. The problem is that US antitrust (competition) law has long parted company with common sense. The rot set in when Robert Bork published The Antitrust Paradox in 1978, in which he argued that competition law had become too focused on preventing cartels, price-fixing and mergers that create monopolies, and should return instead to what he claimed was its original concern with protecting consumers. This view was then energetically promulgated by the influential Chicago Law School and seems to have become the conventional wisdom of competition authorities across the world.
Crudely put, the implication of the Bork view is that no matter how big or dominant a company becomes, if there’s no evidence that its dominance is harming consumers, then there’s no antitrust concern. And the digital giants that now dominate the landscape have driven a coach and horses through this loophole. Google and Facebook, for example, argue that since they are providing superb free services that are highly valued by consumers, then punishing them simply for their market dominance would amount to penalising excellence and efficiency.
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