Page 25 - 2106

Does Amazon Have Too Much Power?

Opinion

By David Kretchmar

I have been an Amazon buy elsewhere. I made kind of a game of it and en-
Prime member for a cou- joyed finding a better price (including tax & shipping)
ple of years and, like on sites other than Amazon. I did this a little out of
many people, have regu- jealousy (I have never owned Amazon stock) and be-
larly made small and large cause of a nagging feeling that Amazon and Jeff Be-
purchases through Ama- zos were taking over the world.
zon. I enjoyed the fast, In recent years I have found it increasingly difficult to
often two-day “free” ship- find a better price than Amazon’s on many popular
ping for a time with Prime, although more recently items. I did not know how or why, but the rules
this turned into two-week shipping on my sandals seemed to have changed.
from Zappos (an Amazon subsidiary). The protec-
tion Amazon gives consumers is second to none in The Anti-Trust Lawsuit
the online or offline world. On May 25, 2021 the Washington, D.C. Attorney Gen-

Amazon has become THE dominant online retailer eral, Karl Racine, announced he was suing Amazon
in America, currently accounting for over 50% of on antitrust grounds, claiming the company’s practic-
online retail purchases in the United States. This is es have unfairly raised prices for consumers and
despite most formerly 100% brick and mortar opera- blocked innovation.
tions such as Walmart, Home Depot, Target, and The lawsuit alleges
Best Buy, moving strongly into online selling. Amazon illegally main-
tained monopoly pow-
Amazon’s third-party marketplace, made up of mil- er through pricing con-
lions of merchants, has become a critical part of tracts with thirdparty
Amazon’s e-commerce business. The marketplace sellers. An Amazon spokesperson said Tuesday: “The
now accounts for more than half of Amazon’s overall DC Attorney General has it exactly backwards —
sales.
sellers set their own prices for the products they offer
With Amazon’s massive size comes power. It would in our store.” I believe this is untrue.
be a miracle (and downright un-capitalistic) if Ama- Karl Racine is seeking to end what he alleges is Ama-
zon did not take advantage of its massive size. Sad- zon’s illegal use of price agreements to reduce com-
ly, in recent years, Amazon has been using its pow- petition; the lawsuit also asks for damages and penal-
er to force consumers to pay more for an item than ties to deter future similar conduct. The suit asks the
they would otherwise pay if Amazon did not exist.
court to block Amazon’s ability to harm competition by
I can anecdotally attest to this as a result of my per- imposing a variety of reliefs, up to and including
sonal experience. I enjoy shopping online, at least breaking up Amazon.
much more than I like physically visiting a retail How Amazon Raises Prices
store. For each purchase I search a number of
online resellers, getting a good idea of who has the The lawsuit, filed in D.C. Superior Court, alleges Ama-
best price. zon illegally maintained monopoly power by using
contract provisions to prevent third-party sellers on its
For many years I continued to shop online at Ama- platform from offering their products for lower prices
zon and other sellers, sometimes finding that Ama- on other platforms. The attorney general’s office
zon had the best price, yet also often finding a better

June 2021 25