Lina Khan and the Federal Trade Commission have finally laid charges against Amazon in court.
Amazon’s ongoing pattern of illegal conduct blocks competition, allowing it to wield monopoly power to inflate prices, degrade quality, and stifle innovation for consumers and businesses. FTC
The question is, will anything come of this?
Is Amazon a monopoly? Do sellers not have other channels that they can sell on? Yes, but Amazon is the best converting and most profitable for sellers. Nothing in business is free, but to state that Amazon takes 50% of every Dollar sold on its platform feels like a generalization of epic proportions. The irony is that when startups start selling their goods wholesale to retailers like Walmart and others - they get fees charged for being stocked inside retail locations.
Stifle innovation? Is the opposite false in that Amazon has forced its competitors to improve their services to create similar customer experiences? Prime is a loved program by Amazon, ensuring other retailers create better loyalty programs. Walmart+ seems to be helping Walmart offer value to customers. Is the argument that because Prime is too good, it needs to be made an example of. I don’t condone dark patterns, but has any regulator seen Grove Collaborative’s behavior when putting an item in their shopping cart?
Amazon is accused of raising prices and using algorithms to track pricing on other platforms. If the item is found at a lower price somewhere else - the buy box is then suppressed. Newsflash - the entire sector uses technology to look at pricing from competing platforms and either change pricing or keep it as is. If items are found at lower prices elsewhere in the retailer - do those items not get shown at a different location at a retailer? Do brands not test price elasticity hundreds if not thousands of times per month? How is that different from what Amazon has done? Amazon has repeatedly been found to be more expensive when compared to other platforms/retail in the past.
Degrade quality? Is this a thinly veiled attempt to showcase Amazon’s private label business? Why is Amazon’s private label business predatory when retailers such as Walmart, Costco, and others do exactly the same thing? Private labels have been around retail for decades. Amazon has closed down many of these brands but quality is a problem in all of retail, not just on Amazon.
Amazon has digitized what happens inside retail, but now it stifles innovation for consumers and sellers.
We are about to see a two to three-year court case where Amazon and the regulators will discuss its operations. Has anyone asked consumers how they feel if they wait longer for deliveries, lose the benefit of Prime memberships and its offering?