How Amazon remains untouched

On July 5th, 1994, in Bellevue, Washington, Jeff Bezos came up with the idea to launch an online bookstore out of his garage. He walked away from an 8-year-old, highly lucrative, Wall Street career as an Investment Banker as well as a fourth senior vice-president position at D.E. Shaw by age 30, after reading a report about the rapid growth of the internet. He started his business with $50,000 of his own money in addition to an investment of $250,000 from his parents. On July 16, 1995, an online bookstore with more than one million titles was made available to customers. Poor Barnes and Noble.

Now, to stop boring you with when Amazon was founded… let us get into how Jeff Bezos and John D. Rockefeller, you know the Standard Oil man who controlled 90% of the oil refining business, are scary alike. Rockefeller overtook the world’s oil businesses and was forced to split his company up. After 2 years of legal battles, on May 15th, 1911, Justice Chief Edward White ruled that “Standard Oil and the other 33 affiliated companies participated in restraint to trade and commerce in petroleum.” The court case established that Standard Oil was indeed a monopoly and ordered it to be broken up into 34 separate companies, each with its own distinct management and assets. These companies included what we now know as  Exxon, Mobil, Sohio, and then BP. The breakup of the Standard Oil Trust was a landmark case in the U.S. antitrust law.  It established the precedent that monopolies were illegal and that the government had the power to break them up in order to promote competition and protect consumers. In the years that followed, the government continued to use antitrust laws to break up other monopolies, like when AT&T was broken up in the 1980s. These attempts were often controversial and subject to political and economic pressures. As stated by David Dayen the executive editor of The American Prospect, “the structure of modern capitalism favors companies that operate at a once unimaginable scale, in the absence of a government will to prevent monopolies from forming.” The Standard Oil case was supposed to set the stage for future efforts to regulate the market and encourage competition. The government now had laws to protect consumers from this happening again.

So you would think. 

The last name “Bezos” and the word “monopoly” are not used interchangeably. Why was a company that owned 90% of the oil industry in 1882 to be destroyed, yet Amazon is not? Stephanie Chevalier, an E-commerce research and editorial expert stated that “Amazon’s market share will account for 50 percent of the entire e-commerce retail market’s gross merchandise volume.”  Amazon is dominating the online shopping industry worldwide.  I mean, Amazon has literally been titled “The Everything Store.” They have crushed the thrill of in-person shopping and robbed real people of real money. Suzanne Brisendine of San Francisco stated that, “It [Amazon] is becoming a monopoly, and we as a culture are so bedazzled by billionaires that our legislators seem incapable of creating regulations to curb aspiring monopolies’ worst practices.” Tim Wu, another average American consumer, and small business owner argued that “New York City’s mom-and-pop stores are on the demise, even though local stores can be cheaper and more efficient than ordering from Amazon.” Quoted from yet another American consumer and said perfectly, “we as a culture are so bedazzled by billionaires that our legislators seem incapable of creating regulations to curb aspiring monopolies’ worst practices.” Amazon owns about 38% of online retail sales in the US and is expected to gain 50% of the entire online retail world in 2023.  Isn’t this what the Anti-Trust law was supposed to protect us from? 

A monopoly exists when there is no real competition for a certain good or service. The business may set its own prices and terms of service without worrying about losing revenue to rival companies. Before evaluating if a company has broken antitrust laws, antitrust authorities, and courts usually look at a number of factors, such as the percentage of total sales in a market, the size and concentration of the market, the amount of competition, and the possibility of anticompetitive behavior. If a company owns less than 50% of the market, they are left alone. When you look up an item, the first item in a Google search is a link straight to Amazon. Amazon has acquired over 100 companies, all across different fields. Amazon, the king of online shopping, also owns a large number of companies like Whole Foods, Zappos, IMDb, Washington Post, Twitch, and ShopBop. In total, Bezos owns over 20 companies including stakes in Google, Airbnb, and Uber. But the interesting part, none of the names have changed. Amazon has been able to hide behind the fact they own companies worth billions of dollars without having to divide their company up. Or be questioned by the government. Why was The Standard Oil Trust broken up when people could only get their oil from one company when we are getting to a point where Amazon carries almost everything that the average consumer would need daily?

The Sherman Antitrust act was put into law on April 8, 1890. The law was passed after the Senate voted 51 to 1 on the act. By definition, The Sherman Anti-Trust law deems “every contract, combination, or conspiracy in restraint of trade, and any monopolization, attempted monopolization, or conspiracy or combination to monopolize illegal.” In real people terms, this means that any company that knowingly eliminated competitors and eradicated choices for consumers, is claimed to be unlawful in the United States. On May 25, 2021, in Washington DC, The Attorney General of Washington D.C, Karl Racine, sued Amazon. He filed the lawsuit for alleged violations of antitrust regulations. The complaint claims that by restricting and eliminating price competition among online retail sales platforms, Amazon’s most favored nation agreements amount to “unreasonable vertical arrangements in restraint of trade.” The complaint claims that Amazon has restricted other companies’ ability to offer lower prices and better terms on their own. Amazon is limiting other online retail sales platforms’ ability to compete for those sales by offering third-party sellers lower fees or better terms on which to provide their products. Amazon is being excused of basically bribing production companies into giving them a lower rate on products. In addition to this case, Amazon has been faced with several lawsuits pertaining to how they run their company. This includes allegations that the corporation misled customers into subscribing to Amazon Prime and various other services offered on the website, worker complaints, and human resource disasters.

On May 24, 2021, activists led by Massachusetts Jobs With Justice protested in front of the offices of two major shareholders in Boston, State Street Corp. and Fidelity Investments, to challenge Amazon’s policies and practices. (Photo by Joe Pietee)

But, there is no need to push for a more thorough investigation of Amazon when they have a revenue of 514 Billion dollars. Oh, and Jeff Bezos donates billions to charity including two billion dollars to the Day 1 Families Fund and $500 million dollars to address homelessness.  Amazon increasingly and steadily helps the US government. Again, directly from Bezos himself, he states that “By collecting and remitting taxes on behalf of our customers and sellers, we [Amazon] help reduce compliance costs and ensure that state and local governments receive revenues on a timely basis.” They also generated over 500 billion dollars of revenue in 2022, and consumers are obsessed. There are about 332 million people in the US, and 150 million of them are Amazon Prime members. That means more than 70% of Americans use Amazon. 

Amazon is responsible for the operation of nearly one-third of the internet. Yet, the most crucial aspect is that it is one of the largest employers on a global scale. In the United States, Amazon is responsible for the creation of more than 950,000 full-time and part-time jobs. Furthermore, Amazon has invested such a large sum of money that it has inadvertently contributed to the creation of employment opportunities in the hospitality and construction industries. According to Bezos himself, “Amazon has now invested more $2.9 billion in Wayne County and, as a result, contributed an additional $2.5 billion to the local economy. ”The construction of warehouses in different parts of the world has helped boost the economy and provide employment opportunities for many people. Amazon has more than 175 fulfillment centers worldwide. This includes more than 200 million square feet of space. Let’s think about this. 200. Million. Square feet. The amount of positive impact Amazon has had on the economic stability of the world prevents the takedown of this global phenomenon. Amazon is one of the largest companies in the world, with a valuation of over $1.5 trillion. It is the largest e-commerce retailer in the world and has a dominant market share in several countries, including the United States, the United Kingdom, and Japan. Jeff Bezos, you freaking genius.