Should we trust Amazon to create our future?

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Its power is troubling, she says.

New York Times writer David Streitfeld leads a double life: he is a literary journalist (which is how I came to know him) and also a technology writer. We wrote about him in the first role a few days ago, on his recollections of David Foster Wallace‘s “worst friend” in the recent Times Literary Supplement. In last week’s New York Times, he combines the roles with a very fine piece of journalism on the world’s mega-bookstore, “Be Afraid, Jeff Bezos, Be Very Afraid.

Amazon now employs more than half a million people and earlier this month briefly became second company to be worth a trillion dollars. It powers much of the internet through its cloud computing division. “As consumers, as users, we love these tech companies,” says lawyer Lina Khan. “But as citizens, as workers, and as entrepreneurs, we recognize that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance.”

An excerpt from the article:

If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.

But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.

Power man (Photo: Seattle City Council)

Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.

Many think it should be exempt from federal intervention.  She disagrees, arguing in a Yale Law Journal article that that “the company should not get a pass on anticompetitive behavior just because it makes customers happy. Once-robust monopoly laws have been marginalized, Ms. Khan wrote, and consequently Amazon is amassing structural power that lets it exert increasing control over many parts of the economy.”

Amazon has so much data on so many customers, it is so willing to forgo profits, it is so aggressive and has so many advantages from its shipping and warehouse infrastructure that it exerts an influence much broader than its market share. It resembles the all-powerful railroads of the Progressive Era, Ms. Khan wrote: “The thousands of retailers and independent businesses that must ride Amazon’s rails to reach market are increasingly dependent on their biggest competitor.”

The paper got 146,255 hits, a runaway best-seller in the world of legal treatises. That popularity has rocked the antitrust establishment, and is making an unlikely celebrity of Ms. Khan in the corridors of Washington.

She’s a woman to watch. Politico just named her one of the Politico 50, “its annual list of the people driving the ideas driving politics.”

Read the whole thing here.


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4 Responses to “Should we trust Amazon to create our future?”

  1. George Says:

    Yet as the article says, many of the established theorists of antitrust are not satisfied with her reasoning. She may have convinced Streitfeld: to have an effect, she must convince the bar, the bench, and the regulators.

    I say this as one who is not a fan of Amazon. My wife worked for a publisher that had its discount dictated to it by Amazon, a transaction that reminded me of the “all the traffic will bear” conversation in The Octopus. We do not purchase from Amazon or Abe Books.

  2. Nicholas Alahverdian Says:

    Amazon is becoming an unhealthy behemoth, a point this article doesn’t seem to make. The monopoly behind the Bezos empire is inherently counterproductive, and we are witnessing this in several spheres such as employment, publishing, and logistics. Whilst there may be benefit to some of Amazon’s products, a free for all regulatory approach is unpractical and without regard to sensible economic and anti-monopolistic structures. A diverse economy is a healthy economy.

  3. Jeff S. Says:

    I live in the Maryland county that’s vying for the second Amazon headquarters by offering, with the help of the state, $8.5 billion in taxpayer-funded incentives. I truly hope they don’t move here. There are unquantifiable costs that outweigh what I suspect are already exaggerated financial benefits.

    I’m in a small town on the distant rural fringe of the county, and I can only imagine how excited business owners would be out here if they got even a tiny fraction of the attention and consideration Amazon is poised to get. Of course, few lawmakers get a thrill from making it less complicated for residents to open their own battery store, mulch business, small-engine repair shop, or karate school. The owners of such businesses will have a far less meaningful say in local matters if and when Amazon comes crashing down on us.

  4. Cynthia Haven Says:

    My goodness, apologies for taking so long to “approve” this, Nicholas!