Lina M. Khan wrote an article for The Yale Law Journal titled Amazon’s Antitrust Paradox.
« Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. »
« Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny. »
« We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. »
« First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. »
« Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors. »
Noteworthy: the Yale Law Journal article was written by Lina Khan in 2017. On 15 June 2021 she was sworn in as FTC chair. Perhaps the FTC lens on antitrust will be updated to address the concerns in her article.
See also Doug Garnett’s post Law of the Jungle: Does Amazon Avoid Antitrust Using Goodhart’s Law?
and a related Twitter discussion.