Document Type

Book Chapter

Publication Date

2018

Abstract

This chapter maps out facets of Amazon’s power. In particular, it traces the sources of Amazon’s growth and analyzes the potential effects of its dominance. Doing so enables us to make sense of the company’s business strategy and illuminates anticompetitive aspects of its structure and conduct. This analysis reveals that the current framework in antitrust — specifically its equating competition with “consumer welfare,” typically measured through short- term effects on price and output — fails to capture the architecture of market power in the 21st- century marketplace. In other words, the potential harms to competition posed by Amazon’s dominance are not cognizable if we assess competition primarily through price and output. Focusing on these metrics instead blinds us to the potential hazards.

The chapter argues that gauging real competition in the 21st-century marketplace — especially in the case of online platforms — requires analyzing the underlying structure and dynamics of markets. Rather than pegging competition to a narrow set of outcomes, this approach would examine the competitive process itself. Animating this framework is the idea that a company’s power and the potential anticompetitive nature of that power cannot be fully understood without looking to the structure of a business and the structural role it plays in markets. Applying this idea involves, for example, assessing whether a company’s structure creates certain anticompetitive conflicts of interest; whether it can cross- leverage market advantages across distinct lines of business; and whether the structure of the market incentivizes and permits predatory conduct.

Disciplines

Antitrust and Trade Regulation | E-Commerce | Law

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