In The Nation: How Amazon Used the Pandemic to Amass More Monopoly Power

Date: 26 Jun 2020 | posted in: Retail | 0 Facebooktwitterredditmail

When Congress finally forces Jeff Bezos to testify, they should ask him why Amazon put market dominance ahead of the needs of customers and third-party sellers, Ron Knox, senior researcher at ILSR, and Shaoul Sussman, legal fellow, write in The Nation. 

As Knox and Sussman explain, Amazon has a long history of using its monopoly power to squeeze small businesses and warehouse and delivery workers. Under the strains of Covid-19, Amazon began to turn its quest for dominance against its own customers.

As Amazon’s own logistics services began to buckle under pressure in March, other shipping providers were delivering products with much shorter wait times. Despite this, Amazon actively prevented third-party sellers from using the faster, non-Amazon shipping providers that it competes with.

Amazon’s quest to dominate logistics services is well documented. But what is less known is Amazon’s decision to curtail the ability of sellers to join a program that during the pandemic, would have allowed the company’s millions of customers to more easily find and buy Prime-labeled products with faster shipping times—and sometimes lower prices.

In fact, Amazon closed their program for sellers to use outside shipping services, called “Seller Fulfilled Prime,” last February, but chose to keep it closed even as other shipping providers outperformed its own services.

This decision has helped strengthen its dominance in shipping and order fulfillment, to the detriment of its sellers and its customers. As Sussman and Knox write, the House Antitrust Subcommittee should ask Jeff Bezos about this anti-competitive decision if he is brought to testify this summer.

Now, Bezos will soon have to answer for this decision. House investigators are keen to learn all they can about Amazon’s business practices, and how its monopoly power may be hurting competition, small businesses, workers, and consumers. As members of the Judiciary Committee said in their letter to Bezos insisting that he testify: “It is vital to the Committee, as part of its critical work investigating and understanding competition issues in the digital market, that Amazon respond to…critical questions.”

Read the article at The Nation.

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Follow Ron Knox:
Ron Knox

Ron Knox is the Senior Researcher and Writer for ILSR's Independent Business Initiative.

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Follow Shaoul Sussman:
Shaoul Sussman

Shaoul Sussman is a Legal Fellow at the Institute for Local Self-Reliance. His research focuses on the intersection of antitrust law and big tech. Shaoul has published an academic paper and a number of articles about Amazon’s anticompetitive practices and the company’s negative influence on firms that rely on its e-commerce platform.