Amazon, the Monopolist?

Date: 22 Dec 2016 | posted in: Media Coverage, Retail | 0 Facebooktwitterredditmail

Pacific Standard Magazine – December 22, 2016

by Dwyer Gunn

In the summer of 2014, a very loud dispute emerged between Amazon, the ubiquitous online retailer, and Hachette, the publisher of books by such well-known authors as Malcolm Gladwell and Paul Ryan.

The exact details of the feud were never publicly revealed, but reports say it centered on e-book pricing. At the same time the blow-up was taking place, Amazon engaged in a variety of negotiating tactics meant to disadvantage the publishing house: eliminating next-day or two-day shipping for Hachette (Hachette books took two to five weeks to ship), declining to make Hachette books available for pre-order, and allegedly fiddling with its algorithm to make it difficult for customers to find Hachette books on an Amazon search. …

Amazon’s increasing market power is tough to deny.

According to a new report from the Institute for Local Self-Reliance, a non-profit research shop that advocates for sustainable community development, Amazon will capture 46 percent of online retail sales in 2016, up from just 22 percent in 2011. The company’s market capitalization surpassed Walmart’sfor the first time in 2015 (Walmart’s revenues are still much higher than Amazon’s).

Amazon will capture 46 percent of online retail sales in 2016.

“Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online,” ILSR researchers Olivia LaVecchia and Stacy Mitchell write. “Amazon sells more books, toys, and by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business.”

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Nick Stumo-Langer

Nick Stumo-Langer was Communications Manager at ILSR working for all five initiatives. He ran ILSR's Facebook and Twitter profiles and builds relationships with reporters. He is an alumnus of St. Olaf College and animated by the concerns of monopoly power across our economy.