PBS’s Frontline aired its documentary, “Amazon Empire: The Rise and Reign of Jeff Bezos,” last night. While the tone of the piece was markedly suspicious, it didn’t offer up any new information to indicate antitrust concerns against the online retailer have any merit.
Suppliers, competitors, and professional policy agitators were all featured bemoaning Amazon’s business practices and success. But the U.S. standard for antitrust isn’t that suppliers feel “bullied” when negotiating with retailers (in fact, I think they call that negotiating). Neither is it a violation of current antitrust law for a company to be big. Similarly, no antitrust crime has been perpetrated just because inside-the-Beltway advocates want to change the law going forward.
The U.S. standard for antitrust action is consumer harm. It’s not supplier harm, harm to competitors, or emotional harm (to neo-Brandeisian antitrust enthusiasts).
The consumer has been king in the last 40 years of U.S. antitrust jurisprudence. That’s because the country learned the hard way that antitrust regulation can serve only one master. The 56-plus years of antitrust law was a garbled mess of protecting competitors, punishing companies for their size alone, and generally not making any effort to use economic analysis in investigations. As a result, there were harmful unintended consequences for the economy and consumers were hurt instead of protected.
The documentary (inadvertently?) suggests that Amazon has a similar singled-mindedness when it comes to benefiting consumers. Book publishers grumbled on camera about being forced to lower their prices when negotiating for Amazon to carry their books. That’s tough noogies for the publishers, but who can doubt that consumers benefited from cheaper prices?
While Amazon’s size doesn’t make it run afoul of antitrust law, it’s important to note that the company still only represents about 5 percent of U.S. retail. The online retailer is a leader is that segment, but it’s competing against behemoths like Walmart, which has both an online and bricks and mortar presence. Physical stores have certain advantages and those might become even more pronounced as 5G makes specialized in-store aps and virtual reality features more common. Who knows what the future of retail will look like and which companies are best positioned to take advantage of those innovations?
Amazon has brought lower prices, increased convenience, broader selection of items, and ever-faster service to millions of customers. It’s naïve to expect that none of that involved hardball negotiations, disappointed competitors, or any other bumps along the way. But all of that seems to have been not only perfectly legal, but also in service to enormous consumer benefit. The documentary was an interesting look at Amazon’s growth into a wildly successful company, but it didn’t break any news on the antitrust frontline.