Amazon Is a Monopoly

Solid interview. But one thing I saw that was missing was that Amazon also doesn't charge itself the 15% marketplace fee (it varies slightly depending on category but most are 15%) that it charges 3rd party sellers. Since Amazon directly sells tens of millions of items, it had at least a 15% head start on every single one of those products in terms of price competition. Since we're talking retail here, the margins on most items don't exceed 15% in many cases. The fact that they have been allowed to charge 3rd party sellers this fee while not facing it themselves or being forced to stop selling products at all if they are going to run the marketplace is mind-boggling to me.

At the previous company I worked for, they were very careful about this issue. It was a fintech company that had 20+ different lines of business/revenue. Due to the nature of the fintech space, certain business units wanted information/data/services from the other divisions. For example, the index and ETF team wanted corporate actions data from the team that monitored all corporate actions globally and delivered it via a standardized feed. The ETF and index teams were forced to take money from their budget and actually buy the service from the other team to avoid legal issues. They knew that if other ETF and index providers found out they had to pay for the product but our internal team got everything for free and could then undercut them and charge less for the ETF and index products, I guaran-fucking-tee you they would have sued us. Every division in the company was financially separated for exactly this reason. There should be some sort of class-action lawsuit on this basis from all sellers against Amazon, in my opinion. Amazon should be forced to separate that business that actually sells its own products into a new legal entity and have to pay the fees.

Great, now you have a $480 billion company and two $20 billion companies.

Most likely nothing will happen with respect to these large companies because generally speaking prosecution only happens when the company's status as a monopoly negatively affects the consumer (allegedly). The criteria is usually price of goods/services. It's possible this might include things like privacy violations or data mishandling in the future, but I doubt it.

There's a DoJ memo, or something similar, that spurred this recent-ish change in policy but i can't seem to find it.

"Monopolization Defined"

The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices. Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. Here courts evaluate the anticompetitive effects of the conduct and its procompetitive justifications.

"Market Power"

Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power.

https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

Stronger anti-trust protections and enforcement will be a benefit all 'round.