Is Amazon Anti-Competitive? Bezos To Testify As Reports of Monopolistic Behavior and Media Manipulation Mount

Amazon has taken the lion share of eCommerce, even as eCommerce share has jumped due to the Covid pandemic. Amazon’s position has prompted growing anti-trust concerns that will be highlighted in this week’s testimony of tech companies and Congress about competition in monopolistic technology markets that Facebook, Amazon, Google and Apple reside in.

Professor and and self-described agitator Scott Galloway, documented some great questions to ask focused on Bezos not paying corporate taxes, illegally subsidizing Amazon Prime, attacking the sheer size of Jeff Bezo’s wealth and asking whether his media platforms like Washington Post are being used as a political weapon, given for example, their podcast terms of service prohibit speaking negatively of Amazon. Great questions from Galloway and a thoroughly enjoyable read on questions for Facebook, Google and Apple.

Given the the upcoming testimony on competition, this was a bad week for the United Foods and Commercial Workers International Union (UFCW) to file a complaint to the FTC on Amazon being a threat to warehouse workers as it now employees a stunning 1/3rd of warehouse workers in the US. “In the absence of immediate and decisive action to curb Amazon’s most abusive practices and its market power, a dominant Amazon — that edges out or undercuts competitors across a wide swath of industries, from consumer merchandise to movie content to delivery technology, and squeezes dry all the various players up and down its vertical supply chain — could be here to stay,” the complaint warns.

News piled up in this critical week as The Wall Street Journal published an article on how Amazon may be stifling competition. Startups are accusing Amazon of stealing their ideas through their venture arm and partnership conversations. Amazon has always been aggressive and corporate venture is often justified in seeing new disruptive technologies early in the development lifecycle. Did Amazon cross a line?

Amazon certainly has been known for its aggressive tactics, even willing to lose hundreds of millions of dollars via price gouging to destroy rising competitor Diapers.com, new emails show. Their use of AWS profits to fuel large eCommerce losses has been one of the cornerstone’s of their revenue growth and ability to push out competition.

On the small business side, Amazon plays a key role for the SMB retail ecosystem. Amazon SMB sellers have seen a 60% increase in YoY sales, averaging $160,000 in sales per year. Their marketplace is a critical for many to not only go online but also get distribution, albeit increasingly via its advertising platform, yet another way that Amazon siphons off revenues into its coffers.

Amazon has also announced this week that it is indefinitely postponed Prime Day, a shopping sale modeled after Singles Day in China. With Supply Chains and logistics networks already stretched thin, as well as discretionary budgets, the regular July event may not happen this year. Perhaps, as Chris Walton suggested, they may at some point use it to dominate Black Friday and undermine brick-and-mortar retail. Of course, that would be a terrible strategy to announce right before testifying to Congress about anti-competitive practices.

Bezos’ opening letter to Congress is a Masterclass in corporate communication, telling a colorful story of his humble beginnings, jobs created, training, and making a strong pitch why they are not such a big fish in a massive retail pond. It is 100% worth the read!

But don’t focus on Amazon’s monopolistic hold on retail … now you can turn their shipping boxes into cat condos forts. Very clever misdirection, Jeff.

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