Amazon's World Domination: The Retail and Marketplace Monopoly Edition
by Lina Khan (Finally) Sues AmazonOctober 11th, 2023
Too Long; Didn't Read
Amazon's monopoly power extends over the online superstore and online marketplace services markets, backed by substantial market shares and formidable entry barriers. Feedback loops between these markets amplify its dominance. Direct evidence points to Amazon's continuous exercise of this power, affecting prices and quality. This report delves into the structural and direct evidence behind Amazon's monopoly status.People Mentioned
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FTC v. Amazon Court Filing, retrieved on Sep 26, 2023, is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This is part 10 of 80.
V. AMAZON POSSESSES MONOPOLY POWER IN TWO RELEVANT MARKETS
117. Structural and direct evidence show that Amazon has monopoly power in two markets: (1) the online superstore market and (2) the market for online marketplace services (together, the "relevant markets").
118. The structural evidence of monopoly power in both markets includes Amazon's dominant market shares and the presence of significant barriers to entry, including powerful network effects and strong economies of scale. These markets and their individual barriers to entry are discussed further in Parts V.A and V.B, below.
119. Feedback loops between the two relevant markets further demonstrate the critical importance of scale and network effects in these markets. While the markets for online superstores and online marketplace services are distinct, an online superstore may operate an online marketplace and offer associated online marketplace services to sellers. As a result, the relationship and feedback loops between the two relevant markets can create powerful barriers to entry in both markets. Amazon offers an illustration of this dynamic: Amazon's base of shoppers in the online superstore market attracts sellers to buy services from Amazon in the online marketplace services market. Amazon in turn relies on those sellers to increase the breadth and depth of goods offered on Amazon's online superstore, which further draws shoppers to Amazon. In addition, Amazon imposes restrictions on how shoppers can purchase its Prime subscription program to artificially increase barriers to entry in the online superstore and online marketplace services markets. These scale and network effects reinforce Amazon's monopoly power in both relevant markets, as explained in Part V.C, below.
120. Direct evidence also demonstrates Amazon's monopoly power. Amazon has continually exercised its monopoly power and degraded the customer experience (redacted). Amazon worsen quality and hikes prices for both shoppers and sellers, all without denting-and while in fact expanding-its dominance. This and other direct evidence of Amazon’s monopoly power are discussed further in Part V.D, below.
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This court case 2:23-cv-01495 retrieved on October 2, 2023, from ftc.gov is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.
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