Amazon has become a form of infrastructure for 21st-century commerce. If you’re an independent merchant or an independent producer, and you want to reach consumers in the 21st century digital markets, you have to ride Amazon’s rails.
Interview with Lina Khan
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At the end of the 19th century, many local railroads in the United States became consolidated into giant iron networks. The anticompetitive practices that resulted soon made these trusts, also called monopolies, a hot political issue. More than a century later, a new rebellion is gathering strength against domineering players on the digital network – the digital network that is our new railroad for e-commerce and much more.
In 1890, the Sherman Antitrust Act made it illegal under federal law to restrain trade or to form a monopoly. Many celebrated legal cases since then have threatened, and sometimes succeeded, to break up such legendary American companies as Standard Oil, US Steel Corporation, International Harvester, and Microsoft.
In 2019, the so-called “hipster antitrust” cohort now have Amazon in their sights. A leader in that effort is Lina Khan, an academic fellow at Columbia Law School and senior fellow at the Open Markets Institute, who recently was named to the Politico 50, a list of thinkers whose ideas are driving politics. Her piece, Amazon’s Antitrust Paradox, published in January 2017 in the Yale Law Journal, was awarded the 2018 Antitrust Writing Award for best academic unilateral conduct article from Concurrences Review and the George Washington University Law School Competition Law Center. She delivered a keynote address at this weekend’s Pubwest 2019 Conference.
“In many regards, Amazon has become a form of infrastructure for 21st century commerce. If you’re an independent merchant or an independent producer, and you want to reach consumers in the 21st century digital markets, you have to ride Amazon’s rails. Amazon now captures $1 of every $2 spent online, and that share is growing significantly,” Khan tells CCC’s Chris Kenneally.
“Over 50% of all American households are [Amazon] Prime members, and around 99% of Prime customers stop engaging in any real price comparison. So, Amazon’s capture of online commerce and of the infrastructure of online commerce is quite significant, and it’s able to use that dominance in ways that I argue are bad for competition,” she adds.
