In Wired, ILSR Legal Fellow Shaoul Sussman and co-author Hal Singer discredit the idea that all businesses behave like Amazon.
Amazon’s defenders are peddling the myth that the company’s alleged exclusionary conduct—particularly as it relates to appropriating information from and then competing against independent merchants on its platform—is no different than that of the typical grocery store down the road.
The authors provide five reasons why Amazon’s “everyone is doing it” argument has no basis in reality.
1. As an incubator of new products, Amazon is permitted to capture a larger portion of the profits of branded products compared to brick-and-mortar outlets.
2. Because Amazon sells sophisticated advertising services to its merchants, it has unparalleled access to the data of sellers who launch their products into the Marketplace laboratory.
3. Because the company also stores and ships a majority of the products that sellers sell on its marketplace, Amazon learns more about the cost structure of its suppliers than do its brick-and-mortar rivals.
4. Certain exclusionary strategies are only available to Amazon due to its size and control of its search algorithm.
5. Because Amazon is a dominant platform, Amazon’s self-preferencing and alleged stealing of proprietary information from merchants has the potential to generate anticompetitive effects.
It’s time to dispense with the notion that Amazon behaves just like every other retailer. Amazon’s market power is vast and only growing during the pandemic. Regulators need to be clear-eyed about the unique advantages enjoyed by Amazon when designing protections for independent merchants. Contrary to what is becoming a zombie myth, Amazon is not your father’s grocery store.
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