Amazon warns of antitrust impact on consumers and small business
Amazon says “misguided” free market interventions will hurt small retailers and their customers.
The e-tail giant has issued an official response to a new majority report from the Democratic staff of the House Judiciary subcommittee on antitrust about the business practices of the “Big Four” tech giants: Apple, Amazon, Facebook, and Google. The subcommittee has been investigating potential antitrust violations by the four companies since summer 2019.
The report’s recommendations include breaking up or placing structural separations into the businesses of the four companies, as well as placing stricter oversight on any mergers involving them, preventing them from placing on any preference on their own products and services, and making their services compatible with competitors.
In its response, Amazon says it accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the U.S. The e-tailer also points out that more than 80 U.S. retailers have annual revenues of more than $1 billion, including Walmart, whose revenues are more than double those of Amazon. In addition, according to Amazon, the top five U.S. stores - Walmart, Amazon, Costco, Walgreens, and Kroger - represent 19.9% of industry revenue.
Other arguments Amazon makes against antitrust action by the U.S. government include:
• Even with “soaring online growth” reported by many U.S. retailers since the start of the COVID-19 pandemic in March, online sales only account for about 20% of total retail sales.
• Third-party sales from small-and-medium-sized businesses account for 60% of all sales on Amazon.com, and those sales are growing faster than Amazon’s own retail sales.
• Third parties having the opportunity to sell directly alongside Amazon’s products provides competitive benefits to both the retailers and consumers.
• Forcing third parties off Amazon and other online marketplaces would make it harder for small businesses to reach consumers and jeopardize millions of jobs.
“All large organizations attract the attention of regulators, and we welcome that scrutiny,” said Amazon. “But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong. And yet, despite overwhelming evidence to the contrary, those fallacies are at the core of regulatory spit-balling on antitrust. For consumers, the result would be less choice and higher prices. Far from enhancing competition, these uninformed notions would instead reduce it.”