Amazon Has Too Much Market Power: Washington D.C. AG

May.25 -- Washington D.C. Attorney General Karl Racine discusses the lawsuit filed against Amazon for antitrust violations. He explains how the e-commerce giant dominates the online marketplace and how third party sellers are treated unfairly. He speaks with Emily Chang on "Bloomberg Technology."

[NolanAntonucci]

To quickly breakdown what has been happening on Amazon (and in ecommerce) for years—

When Amazon's crawlers find the same product listed cheaper somewhere else (so another marketplace like Walmart or Chewy or even a brand's direct-to-consumer website), Amazon limits Buy Box access (literally the button you click to add the item to your Amazon shopping cart). So with this break in the checkout process, sales obviously drop, and this drop in sales is further compounded by a drop in that product's visibility higher in Amazon search results because sales volume is a core SEO ranking factor, which drops sales even further, and so on...

This negative cycle handcuffs sellers forcing them to set their prices equal on Amazon as on their DTC website. Keep in mind that Amazon sellers have to set their prices based on the 15% or more commission on each order that Amazon will take, so as ecommerce platforms like Shopify make selling direct easier, this 15% fee is a cost that is certainly passed to the shoppers.

Karl Racine's case is sound in this way.

That said, Amazon's response will be: "We aim to create a destination where shoppers are confident they are finding the best prices (with trustworthy/easy payments and with the best deliveries), so we have instituted a policy to better protect *SHOPPERS* from being price gouged on our platform by *SELLERS*.

What Amazon will leave out is that although they are correct in that a shopper gets lower prices ON THEIR PLATFORM, that same shopper would be able to get a lower price elsewhere, if the brand/manufacturer didn't have to account for the 15% take from Amazon, and that savings could be passed along to shopper in a direct-to-consumer future.

As someone who works in ecommerce and is nearly equally invested in Amazon and Shopify stock, this will be very interesting and potentially have major impacts commerce's future.

[solarbreak]

The most suspicious thing about Amazon is the amount of Chinese parts I can get so fast compared to other sites. Why am I waiting about a month from ebay and others, but 2 days for the same thing on Amazon? I deliver for them and the days are rough. It's hard to exaggerate it.

[IvanJura]

But it's 50% of the US market. Maybe the most lucrative and sought after market, but still less than 300 million users.
Today Amazon is competing globally and while it is a behemoth; talking about owning "up to 75% of the market" is ridiculous and actually bad for the US economy...

[milofonbil]

Did this guy ever study Economics? Monopolies are able to increase prices by restricting quantity to market. Amazon does not restrict available quantity. In actuality, Amazon is very customer-centric. They ensure that they have the *lowest* price as well as *the best customer service*. If you look at the Amazon marketplace, a large number of sellers are selling the same product, often in competition with their own products.