“It’s often said that if there’s one thing that can bring Republicans and Democrats together, it’s a common enemy,” says Jason Boyce, founder, and chief executive officer of Avenue7Media, a service supporting independent sellers on Amazon.com. “Right now, the common enemy is Big Tech.”
When it comes to Amazon, Google, Apple, and Facebook, “there’s no question that all … of these companies have gained enormous, outsized power that’s suppressing competition, especially on the Amazon platform,” Boyce argues.
He believes that Amazon’s dominance is, if anything, understated. As a public company, Amazon only reports to the U.S. Securities and Exchange Commission the revenues from its cut of third-party sales — say, $15 out of a $100 item. But the actual retail value of goods sold on the Amazon platform is far greater than that — in all, a reported $610 billion between June of 2020 and June of 2021. By contrast, retail giant Walmart posted sales during that period of around $566 billion.
The gap is even wider when comparing the two merchandisers’ e-commerce activities. In 2021, Amazon captured around 40.4% of the market for goods sold online in the U.S. (Boyce believes the actual number is as high as 55%.) Walmart was a distant second with just 7.1%.
“Amazon is bigger than the next 10 [online] retailers combined,” Boyce says. “It’s a no-brainer case that Amazon is a monopoly.”
Boyce believes Amazon’s behavior does indeed harm consumers. “Amazon is actually inflating prices on the entire internet of products,” he charges, citing a 2017 Yale Law Journal article by an antitrust lawyer (and now Federal Trade Commission chair) Lina M. Khan. “Companies may exploit their market power in a host of competition-distorting ways that do not directly lead to short-term price and output effects,” Khan wrote at the time.
With its cloud services, a marketplace for third-party sellers, and Fulfillment by Amazon offers, Amazon is less of a retailer and more a B2B company these days, Boyce argues. “With 8 million sellers worldwide, [including] 1.2 million in the U.S. with an active listing, that is a huge customer base,” he says, claiming that Amazon has progressively imposed higher fees on those customers that jeopardize their profitability.
Boyce further alleges that Amazon de-emphasizes listings for third-party sellers who offer their products on other platforms for less than on Amazon, a practice known as buy box suppression. And it frequently offers its own version of third-party products under a variety of house brands at a lower price, he charges. (That practice was, of course, pioneered by big-box retailers such as Walmart and Target.)