(Drivebycuriosity) - When I browse the World Wide Web I often spot the phrase "Amazon monopoly". The word "monopoly" combines the Greek terms "mónos", meaning "single" or "alone" with the word "pōleîn", meaning "to sell" (wikipedia ). Economists use the term "monopoly" when there is just one seller (the monopolist) and there are no competitors.
Antitrust activist Lina Khan build her whole career on the claim that Amazon has a monopoly. In 2017, then being just a law student, she published a paper with the claim that Amazon will become a monopolist ( reason yalelawjournal driveby).
The Khan declared that Amazon´s prices are "too low" (!), which will drive competitors out of business and will hinder potential competitors to emerge, ignoring the worldwide continuously growing number of Amazon competitors. In 2021 President Biden made her chair of the mighty Federal Trade Commission (FTC), America`s trustbuster authority (inside nytimes).
The Amazon-monopoly callers ignore that the number of Amazon challengers has been rising exponentially - and many of the copycats are growing much faster. In the second quarter 2023 Amazon´s online shops advanced just 5% while Walmart´s online business expanded 24% and Shopify´s revenues jumped 31% (shopify ).
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The antitrust activists expand their Amazon monopoly claim to other business segments. They complain about Amazon´s alleged market power in cloud computing. The facts: In second quarter 2023 Amazon´s cloud segment AWS achieved a revenue growth of 12% Y-o-Y. In the same time competitor Azure, the cloud business of Microsoft, grew 27%.
The growth numbers indicate a healthy competition. Amazon is far away from becoming a monopoly. Quite contrary, the numbers show that Amazon is losing market share.
Amazon is also competing in the advertising business against Meta (Facebook & Instagram), Google and many others. Being a seller of e-books (which are just small fraction of the book market) Amazon competes against Barnes & Nobles, Walmart partner Rakuten, eBook.com and ohters. Amazon Prime as provider of streaming movies competes against Netflix, HBO Max, Disney and many others.
The numbers confirm economic theory: When a company has success it will animate copycats. The story of Amazon is the proof. Amazon´s rise inspired many investors to put their money on the next Amazon.
The Khan fabled that Amazon´s alleged "predatory prices" will turn it into a monopoly and then it will hike prices again. Nonsense! If Amazon would become a monopolist, the monopoly profits would attract others - including hedge funds and other big investors - who want to have a piece of the pie. How many trillions of dollars would Amazon need to drive Goliath Walmart out of business - and Target, Alibaba, Rakuten and many others too?
The Amazon Monopoly claim is based on economic illiteracy and ignorance of history.
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