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In the Activision case, the FTC ignored the fact that cloud gaming is a very small market and that the high-end console market is dominated by PlayStation, and filed an injunction to prevent the acquisition on the grounds that "large-scale acquisitions by large companies are not good." As a result, it was natural that they lost the lawsuit.
In the case of the FTC's proposal to split Amazon, the FTC has been collecting evidence to support its claims for the past three years, even before Lina Khan took office as the chair. In addition, Amazon has actually pressured third-party retailers by using its dominant position in online shopping. Therefore, I think the claim is more likely to be upheld than in the Activision case.
The only thing I look at with amazon is how you'd break it up?
I think its obvious that Amazon is a company with an market position allowing it to exercise unreasonable control over its markets.
> how you'd break it up?
For starters, separate AWS from retail/logistics. (There is something loosely analogous to dumping in a high-margin business entering a low-margin trade.)
Of all the "big tech" companies, Amazon's monopoly position is the one that worries me the most.
Google, Apple, Netflix, Facebook - you can imagine how a clever competitor can get a foothold to compete in those markets. But Amazon's ownership over the entire physical logistics supply chain through to last-mile delivery is just such a huge moat that keeps getting larger and larger.
Amazon is the easiest one for me, and I suspect many others, to cut out.
Walmart’s website has identical functionality for selling retail goods, including third party sellers. Target is not far behind. Newegg is all third party goods as far as I understand.
Then there is Best Buy, Home Depot, Lowes, Staples, Kroger, Albertsons, Dollar Tree, and myriad other retailers.
Amazon Music is easily replaced by Apple/YouTube/Spotify.
Amazon Video is easily replaced by myriad other streaming services.
Contrast with my choice of smartphone operating system - Google or Apple.
Or choice of operating system in corporate environments with legacy software - Microsoft. Ditto for spreadsheet software.
Even in cloud, AWS is up against Google and Microsoft.
Where is this idea of Amazon being a monopoly coming from? They even earn pitiful profit margins compared to the other tech companies.
I'm an avid Amazon shopper, but.. you know who is surprisingly good for things that are not books? Target. Great experience, fast shipment sells stuff online for the same price it does retail. A second runner up is Home Depot.
Amazon Music and Video are value adds, but not why people give Amazon money.
First, who said anything about profit? That isn't even part of the definition of monopoly.
The killer feature none of those you've listed has been able to achieve is the shipping logistics. This enables their vast selection to be more than just window dressing; contrast this with say Best Buy if the part or item isn't at a local store.
Meanwhile, there have been quite a few previously thriving retailers whom are now either on life support or gone. Anecdotally, I watched several major chains die at the hands of the one upon a time up- and-coming Amazon.com. The number of book stores alone that were killed off is tragic.
https://www.moneytalksnews.com/9-major-companies-face-threat...
https://ilsr.org/fact-sheet-how-breaking-up-amazon-can-empow...
You left out Prime Shipping. There is nothing comparable to Prime Shipping.
You seem to be using monopoly to mean “big” or some other definition.
None of the companies you list are monopolies. Google is the closest in terms of market share but even that is a weak case. It is impossibly easy to get to Bing or DuckDuckGo, and there is the obvious, massive lateral threat that is chatgpt and other llm’s.
Amazon is about 40% of the e-commerce market. Much much less of retail.
Indeed. I find the Amazon as a monopoly argument very curious when they are smaller than Walmart as a retailer. Walmart is a similar percentage of the regular retail market in the USA.
Except that it’s financially supported by AWS. If AWS is separated, they would not be able to keep owning the logistics chain for long.
If Amazon can't make delivering tangible goods to people in exchange for money profitable without slopping money over from the near infinite slush fund that is cloud computing, then it is using market position to stifle competition and deserves to be broken up so Walmart, Target, Best Buy, etc. have a fighting chance of staying in business to keep prices down via competition.
Source? They kept their profit margins near zero during their retail only days, but Walmart/Target/Kroger/etc have only ever earned 2% to 5% profit margins anyway.
which is why I would force them to cleve AWS off, and frankly cleve off some of their logistics chain too.
> But Amazon's ownership over the entire physical logistics supply chain through to last-mile delivery is just such a huge moat that keeps getting larger and larger.
You are ignoring the much bigger retailer that has owned a similarly complex and integrated logistics supply chain for decades. Walmart. And they do it with a lot more stuff.
This what they said about Google. Google would be evil monopoly that no one can compete in Search and Ad business. An AI startup disrupted Google Search marker and made them panic and Google is falling apart in other areas as well by themselves.
So no one is too big to fail or compete.
I'm sorry; if you think Google has been in any material way "disrupted" by ChatGPT or any of its brethren, you either have been duped by propaganda from OpenAI or you are buried deep, deep in a Silicon Valley techbro bubble.
Google is still what everyone thinks of when they want to search the web, despite how bad its results have gotten in recent years. Even actual alternative search engines, like DuckDuckGo, are still very minor players in comparison.
Google is still the default for search, and the monopolist on search ads. Open AI has ways to go to beat Google, and going by the recent performance concerns of ChatGPT, it's not highly inspiring either.
I think Google's position is much more worrisome. As others have already mentioned, with Amazon, you can always go to Walmart or other retailers. In many cases, these days I find myself using the manufacturer's website and purchasing directly from them to avoid counterfeits.
Google (err Alphabet) is so completely dominant in search (93.125 world marketshare) and video (97.42%), and not far behind in mobile operating systems (70.89%) [and I found both of these numbers by using Google]. Of course marketshare on its own is not a particularly strong argument for breaking a company up, but Google could be a lot more evil than Amazon, if it wanted to.
The thing is, if Google chose to be evil, how much room do they have? They're losing in Cloud, they're losing money/barely breaking even with YouTube, and they don't really have room to monetize stuff like Gmail, YouTube, the play store, etc else users would flee in droves.
Google really doesn't have enough room to be evil even if they tried - they've already exhausted most avenues that they could and failed. Imo, Google is actually under threat - if someone were to credibly show in detail how useless Google Ads actually are or how flawed/falsified their performance metrics are (perhaps via internal leaks a la Facebook, etc), Google could easily end up losing a lot of ad customers.
Other retailers continue to shutdown and it's a direct result of Amazon.
Sears, JCPenney, Bed Bath and Beyond are just a few dominoes to have already fallen.
Good, although I've yet to see any indication that this FTC is competent enough to pull it off, after that pathetic Microsoft/Activision suit.
The FTC is competent, the problem is that they have decades of antitrust enforcement debt and a judicial system hell-bent on nullifying the underlying law. See https://pluralistic.net/2023/07/14/making-good-trouble/
> FTC is competent
As a training ground for aspiring Congresspersons, yes. As an executive agency, no.
Khan started her term learning to manage. She is now losing case after case on account of sloppiness [1] and overreach. Her ideas are good. But she seems to want to write new laws, not enforce them. The right person in the wrong seat spells incompetence.
Author doesn't seem to understand the basics of acquisitions:
> Start with the fact that Corley's son is a Microsoft employee who stands reap massive gains in his stock options if the merger goes through
It's Activision whose stock stands to gain from this, not MSFT.
No way this happens in the next decade. This is something that will take the government a decade-plus to resolve. Just look at how long it took the government to break up AT&T.
We look at Microsoft and Internet Explorer as some kind of fast victory, and sure it was a gross monopolistic practice. However, Microsoft willingly caved due to Bill Gates personal embarrassment in the court room.
However, Amazon's entire business model works because it is or needs to be a monopoly. If they have to break up and share the pie, it will be devastating and so no way they don't fight and hold things up in courts.
I feel the same way. The case certainly seems stronger on the merits with Amazon than MS-ABK did, but I'm worried about the FTC's confidence after that PI hearing.
What happens when they lose this one too? Just because the commissioner has a law review Note setting forth a legal theory does not mean the law has changed.
> What happens when they lose this one too?
Boards the country over become more emboldened.
I have trouble seeing Khan's continuation at the FTC as anything but an olive branch to Big Tech. Activision is a recent failure. The glaring one was Facebook, where the FTC did "not even provide an estimated actual figure or range for Facebook's market share at any point over the past ten years" [1]. That's the judge! In his opinion!
[1] https://casetext.com/case/fed-trade-commn-v-facebook-inc#p4
I'm not sure what you mean? If they lose then they lose. They don't have control of the law and having a legal review seems like the best they can do
The next one - for Google perhaps - gets even harder.
They already lost one with Activision and Microsoft.
Lina Khan fails upward into a cabinet position in the next administration for demonstrated loyalty to questionably legal crusades.
Amazon is not a monopoly. They offer a compelling bundle of services. The whole point of breaking up monopolies is that monopolies are uniquely positioned to manipulate market prices. None of Amazon's businesses can arbitrarily increase prices without losing customers to their competition.
In 2020 Amazon's political donations were roughly half those of Google and Microsoft, two companies who could more easily qualify as monopolies. Microsoft used to explicitly avoid political donations until the FTC made noise about breaking them up. Meta gets away with donating less because, as Zuckerberg stated on Lex Friedman, they collude with federal agencies to censor wrongthink.
Amazon will remain whole and they're going to have to raise their protection fee to the Federal Mafia.
Lina Khan wrote an influential essay about Amazon and monopoly in college. She will come with guns blazing for this one after the crushing defeat in the ridiculous lawsuit against the Activision purchase.
Amazon both revolutionized and destroyed large parts of physical retail. I'm thinking about whether I want the FTC to win this one.
Non-native speaker here: Shouldn't the verb in the title be "prepares" instead of "readies"? Were all the things we learned in the English class this useless?
Either is acceptable as used in the title. English does have a lot of synonyms. There are circumstances where "ready" is the wrong verb to use but "prepare" is not, so I think your English class having you learn "prepare" is the correct choice.
It’s amazing how inept FTC is to target the one company that feels least like a monopoly. Amazon has no pricing power. If they increase prices customers will leave to Target, Walmart etc. in fact every single one of amazon businesses has a lot of competitors that customers can move to.
Google on the other hand is the dictionary definition of a monopoly. Microsoft Windows is a monopoly for consumer desktops. Apple is an annoying brand based monopoly that also made it the most valuable company to ever exist.
What is the FTC trying to tell companies, using low prices to get as much market share as possible is illegal but having a technical edge that makes you the only player is completely fine?
No mention of aws is surprising
It's mentioned[1] extensively in the essay the now FTC chair wrote for the Yale Law Journal back in 2017
[1] https://www.yalelawjournal.org/note/amazons-antitrust-parado...
Nooooooooooo!
Do it, Lina. Do it, do it, do it.
Wow, the FTC is really turning up the heat on Amazon! It's like a high-stakes poker game, and the FTC is going all in with this antitrust lawsuit. It's going to be interesting to see how this plays out, especially with all the different aspects of Amazon's business in the crosshairs. From Amazon Prime to their logistics and advertising services, it seems like no stone is being left unturned. And with Lina Khan at the helm, who's been pretty vocal about her views on Amazon, things are bound to get interesting. Grab your popcorn...