Monopoly is not a suitable term for what Amazon is in the process of accomplishing. A monopoly is defined as the exclusive possession or control of the supply or trade in a commodity or service. There is no term for a corporation becoming the supply or the trade.
I am not anti-Amazon but it’s becoming easier to see how this current administration could bend precedent to break up a web-based conglomerate.
Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.
Yale Law Journal: Lina M. Khan, Amazon’s Antitrust Paradox
Amazon is trading at near all-time highs, with a market cap in excess of $700B. Historically, Wall Street investors and consumers have been tremendous fans of Amazon, Main Street businesses have not. This is an important distinction.
Until the 1970’s and 80’s, antitrust litigation has focused on structuralism: a focus on relationships of contrast between elements in a conceptual system that reflect patterns underlying a superficial diversity.
After Reagan’s Antitrust Explosion of 1982, elements of the law began to shift from structuralism and toward consumer welfare. That year, AT&T and IBM faced antitrust litigation that forced changes in each company by 1984. As you know, Amazon Web Services (AWS) and Prime have helped the public company to minimize losses. Thus far, Amazon has been immune to consumer welfare pressures. Due to the successes of AWS and Prime subscriptions, the direct-to-consumer side of the business has operated as a relative loss leader. As Yale Law Journal’s Linda Khan pointed out, this loss leading metric has blinded regulators to the hazards of Amazon’s business strategy.
[My] analysis reveals that the current framework in antitrust—specifically its equating competition with “consumer welfare,” typically measured through short-term effects on price and output—fails to capture the architecture of market power in the twenty-first century marketplace. In other words, the potential harms to competition posed by Amazon’s dominance are not cognizable if we assess competition primarily through price and output. Focusing on these metrics instead blinds us to the potential hazards.
Yale Law Journal: Lina M. Khan, Amazon’s Antitrust Paradox
The 1982 antitrust guidelines introduced by Reagan and his administration set a meaningful departure from ninety years of legal precedent; these guidelines were re-emphasized in 1968. The actions of the Reagan administration in 1982 reflected a new focus. Lina Khan went on to say: “The law against vertical mergers is merely a law against the creation of efficiency.” With the election of President Reagan, this view of vertical integration became national policy. This has been known as the Chicago School approach.
The Chicago School approach to antitrust, which gained mainstream prominence and credibility in the 1970s and 1980s, rejected the structuralist view. In the words of Richard Posner, the essence of the Chicago School position is that “the proper lens for viewing antitrust problems is price theory.”
To pursue an Amazon antitrust case, President Trump will have to reverse the revered national policy of the Reagan Justice Department. It can be implied that the Reagan administration’s shift from structuralism and towards price theory was meant to emphasize middle-class consumerism. But no one could have foreseen Amazon’s role in building a modern monopoly over America’s consumer web. Frankly, their version of a monopoly is altogether different. Here is an illustration for you:
Thought more on $AMZN’s anti-trust concerns. Here’s a (short) history of U.S. monopolies being broken:
1. Standard Oil owned oil.
2. U.S. Steel owned steel.
3. American Tobacco owned it.
4. AT&T owned communications.Amazon owns just 4% of retail. And 43% of eCommerce.
— Web Smith (@web) April 1, 2018
The 4% / 43% figure doesn’t begin to tell the story. No one could have predicted how effective an internet-based conglomeration could be. Or the impact that Amazon’s sales could have on commercial real estate woes. Or how Amazon lobbies for potentially detrimental state / local tax benefits. Around the country, real estate brokers are in a panic as warehouse / office park leasing have fallen off a cliff. In addition, Amazon’s HQ2 campaign is leading to a growing criticism from those who believe that Amazon may have too many tax and cost benefits and at the peril of middle-class workers and retail entrepreneurs.
Trump’s deep-seated antipathy toward Amazon surfaces when discussing tax policy and antitrust cases. The president would love to clip CEO Jeff Bezos’ wings. But he doesn’t have a plan to make that happen.
Jonathan Swan, Axios
亚马逊建立业务的信念是，只要消费者价格低廉，反垄断法就不适用。琳娜-汗接着说："由于 20 世纪 70 年代和 80 年代法律思想和实践的变化，反垄断法现在对竞争的评估主要着眼于消费者的短期利益，而不是生产者或整个市场的健康状况；反垄断理论认为，消费者的低价格本身就是良性竞争的证据"。
The health of the retail sector has been on decline for quite some time. Retail business owners, real estate brokers, lenders, and commercial developers didn’t foresee how much of an effect Amazon and eCommerce would have on their adjacent sectors. Where there was originally confusion and apathy, there is now a shared disdain for the Seattle eCommerce giant. Main Street business owners, politicians and pundits have taken notice. And this is the audience to whom President Trump speaks.
Under the current interpretation of antitrust laws, Amazon seems to be getting a free pass. So I should say that antitrust laws in, their current state, don’t prohibit conglomeration. They don’t prohibit a single company from being involved in all these different lines of business. But what they are supposed to prevent is a company that enjoys a dominant footprint in one area of the market, using that footprint to leverage its way into other markets, and so I think that’s the area where Amazon potentially should be facing scrutiny.
From Korva Coleman’s interview of Lina M. Khan, NPR
In 1890, the father of the Sherman Act, Mr. John Sherman (R-OH) stood on the floor of the Senate and declared the following:
If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade, with power to prevent competition and to fix the price of any commodity.
When the gentleman from Ohio made this statement, he couldn’t envision a future where one man presided over a corporation responsible for a great deal of production, transportation, and the sale of any necessities of life. Sherman also couldn’t envision the internet, a virtual destination void of political governance or etiquette. Amazon’s strategy continues to be the forging of an antitrust-proof conglomeration – loved by consumers and feared by both incumbents and challengers.
Antitrust law is overdue for change. The language no longer matches the time. And while Amazon may not be the most deserving of this scrutiny, they are the most likely target.
The laws will change to address the modern day concerns of retailers, logistics networks, newspaper publishers, ad firms, shipping companies, grocers, auction houses, book publishers, movie studios, software companies, hardware manufacturers, credit lenders, payment services, and internet service providers. In our modern American economy, any business that touches the internet has been affected by Amazon.
Bezos is aiming to possess the entire board upon which a monopoly can be formed — the consumer internet. And populist politicians may eventually conclude that no corporation should be able to own the consumer internet. But for now, Amazon has every advantage.
Report By Web Smith | About 2PM
