Yes, Amazon has done so many anticompetitive things over the years that it takes 2 posts to list them all! In fact, Amazon has been attempting to suppress competition since it was a wee little bookselling website in a cute little newborn thing called the Internet.
So did you know that you are paying higher prices for all kinds of consumer goods (like eyedrops) because Amazon.com exists? It doesn’t matter whether you love Amazon and give as much money as possible to them via your Prime membership or whether you haven’t purchased anything from Amazon in years. Amazon is still able to raise your prices.
How? Why?
Well, the why is easy. Amazon doesn’t just hate unions. It hates competition in all forms. Well, actually that’s why it hates it hates unions. Because unions help ensure that capitalism works the way it’s supposed to. Companies are supposed to compete for workers, the way they are supposed to compete for your business.
Amazon doesn’t want to do that. No highly successful capitalist corporation does. That’s how they get to be highly successful capitalist corporations. They do everything in their power to avoid, crush, or kill competition. Peter Thiel, renowned evil capitalist and friend of the Antichrist, even gave a speech on how competition is for losers.
Thiel is right and it’s obvious even from a distance. Obvious to everyone, that is, but the American government. You see, way back in the dim mists of time, before many of you were even born, a man named Jimmy Carter was president. Everything sucked when Jimmy Carter was president and everyone knew it. Jimmy Carter knew it. Voters knew it.
When the Us Government Decided Competition Wasn’t That Important to Capitalism Anymore
So Jimmy Carter started trying to appease people who were yelling at him that everything sucked by doing things that his critics told him he should do. It turned out those critics sucked too. Sucked big time.
One of the things his critics told him to do was stop this business of antitrust enforcement against gigantic companies for the crime of being so gigantic that they plowed everything over in their wake. The critics had a theory that these companies wouldn’t be so gigantic unless everyone loved them so very very much. Because everyone looooooves gigantic corporations.
These critics believed capitalism farts rainbows out its butt. They did not understand these corporations became gigantic because they were run by the ruthless mofos. The same kind of mofos that became known as robber barons or that precipitated the Great Depression. Because no, these fellows believed, capitalism is a unicorn that farts rainbows everywhere it goes.
Governments from Jimmy Carter on fell for the rainbow farting theory and stopped enforcing antitrust laws against corporate gigantosaurus rexes unless it was so freaking obvious that everyone hated them that it was impossible to ignore.
For a long time, the only corporate gigantosaurus rex the government went after was Microsoft in the 1990s. Because truly, everyone hated Microsoft and Bill Gates.
What the hell does this have to do with you and Amazon and the fact that Amazon is merrily screwing you over in ways you don’t even realize because they are deliberately hidden from you?
Amazon Always Planned to Become a Gigantosaurus Rex
Well, we’ll start with the boringly obviously yet studiously overlooked fact that when you pretend that in the business world giant predators with tiny arms are everyone’s friend, that’s a real good enticement for people with the personalities of giant predators with tiny arms to rush into business to become gigantosaurus rexes.
Yes, people with all the lovely attributes of a prehistoric monster rushed into business (the movie Wall Street was an early examination of this phenomenon).
Jeff Bezos started Amazon with the deliberate intention of voraciously gobbling through every last shred of human decency in his business while declaring that everything it did smelled like unicorn rainbow farts. That included, of course, engaging in every attempt to prevent competition to Amazon that he and his minions could think of. And they could think of a lot.
This worked. It worked because he knew the laws. Bezos knew how the system was skewed. He knew everything in government and propaganda was specifically rigged to make sure people were told his shit didn’t stink.
People who promote not enforcing antitrust laws against gigantic corporations are actually anti-capitalist. Because everyone who hasn’t been inhaling neoliberal shit for so long that they actually believe in rainbow farts knows that the corporations with power will try to get more and more of it until they destroy not only competition, but consumers, and governments, and the economy, and finally capitalism itself.
It’s happened enough times in history that only the severely delusional aren’t wary. But there are so very many severely delusional people who want to believe in magic and gigantosaurus rainbow farts.
Government Lets Companies get ‘too Big to Fail’ and screws everyone
What we got in the US from this delusional faith in our own brand of Reagan/Thatcher neoliberal economics was a bunch of ‘too big to fail’ companies who fucked up so bad they cratered the economy OF THE ENTIRE WORLD in 2008.
They didn’t just fuck up the entire world, while largely remaining unscathed, they unleashed a bitterness in the American public that still runs through the veins of almost every adult. People don’t even remember where the bitterness comes from anymore, but it comes from a general realization that began in 2008 that people are fucked by the system and corporations aren’t.
But nothing happened to any of the corporations. So Jeff Bezos and his ilk just kept merrily crushing competition, creating monopolies, grabbing power, and silently screwing you over.
Now, let’s look at how!
It’s been a very gradual process. Amazon started selling books online in 1995. A first mover in the online space. By 1999, it had patented a 1-Click ordering system. It used that patent to try to drive Barnes & Noble’s website out of business. It wanted to ensure no one else could sell products using similar easy click or streamlined methods.
Amazon Succeeds in Muscling Out Competition
Amazon actually succeeded in driving Barnes & Noble and many other booksellers basically out of business by, you know, muscling out competition. But it wasn’t enough to go after booksellers.
Amazon also tried to patent having an affiliate program. But it went much further than that. I remember when Amazon tried to patent photographing an item for sale against a white background. IN OTHER WORDS, AMAZON TRIED TO PREVENT ANYONE ELSE FROM HAVING PHOTOS OF PRODUCTS ON THEIR INTERNET STORE. If Amazon could have figured out how to take out a patent on breathing (it probably tried), we’d all be asphyxiated by now.
All these patent shenanigans made people furious and sparked the first Amazon boycott. So Bezos got huffy and then backed off. Amazon’s patent abuse was so bad, though, that it sparked reform of the entire pathetic business patent system in effect at the time. (Which was another spectacular neoliberal failure). Thus began a pattern that Amazon and Bezos rarely deviate from:
They will try any blatantly outrageous and immoral tactic to prevent competition (in this case trying to literally prevent anyone from being able to engage in e-commerce) until people scream loud enough to get some attention to the problem. Then Amazon/Bezos will get huffy and defensive and lie to about just being rainbow farters until they cave if the public pressure keeps.
Let’s recap. Step 1: Commit bad act or acts. Step 2: Lie and lash out when confronted with evidence of bad acts. Step 3: Admit lying and cave when confronted with continued pressure.
After the patent debacle of the early 2000s, public criticism of Amazon monopolistic practices seemingly quieted down for a while. It wasn’t until the late 2000s that the next controversy erupted, once again over books. It got into a big old fight with Hachette (a book publisher) and also with authors over book pricing. Basically, Amazon did not want anyone other than itself to have a say in book pricing. So it got furious if Hachette books were sold elsewhere for less.
Amazon Wants to Control Prices Everywhere to Prevent Competition
This business of price undercutting is at the core of Amazon’s monopolistic practices. AMAZON WANTS TO CONTROL PRICES EVERWHERE. Not just on Amazon. It wants to decide if they are higher or lower and when.
This obviously pisses off publishers, who, you know, rely on book sales to stay afloat. But it also pissed off authors because Amazon’s business model cut into their earnings as well. In one of the more absurd manifestations of this feud, Amazon wouldn’t allow Disney or Warner Brothers pre-sales of popular movies because the Hollywood companies had publishing arms.
As is typical with Amazon, the tactic worked. Amazon was able to drastically reduce sales of Hachette books. It also didn’t work. Because, as is typical with Amazon, they overplayed their hand, and had to back off.
The other major tactic Amazon uses is to weaponize how large it is. Amazon will refuse to sell someone’s products on Amazon.com. Inevitably, given how large Amazon’s market share is for online commerce, that cuts into a seller’s sales. To be clear, there are many other places to buy online. It is not necessary at all for consumers to shop at Amazon, but for sellers (whose margins are not high), the hit in sales is a big deterrent.
This tactic works even against companies like Apple and Google. Amazon wouldn’t let anyone sell Apple and Google products on Amazon.com because they competed against Amazon products like Fire TV and Ring. These behemoths fought with each other. Each restricted access to the other’s products until, of course, they were all forced to back down and restore access.
Since Amazon wasn’t able to annihilate competition from the big guys, it settled for nuking small business (one of its specialties). It created a policy that only allows really large vendors of Apple products to sell them – which ensures that small vendors with low overhead can’t compete on price. In other words, Amazon props up prices so they can’t be lowered.
Project Nessie: Amazon Uses Technology to Prevent Competition
In 2015, Amazon was forced to give up one of its absurdities in its race to prevent all forms of competition: employee non-compete contracts with hourly workers. In other words, Amazon hourly employees had to sign contracts that promised they wouldn’t work for any Amazon competitors for 18 months after they stopped working for Amazon. Since Amazon can claim that almost anyone is a competitor (hah!) that would essentially mean that rank and file Amazon employees could not work almost anywhere for a year and a half after leaving Amazon.
To be fair, Amazon didn’t enforce this contract because literally how could they? It’s just that Amazon has a knee jerk instinct to stifle competition.
Again, in this instinct Amazon isn’t unusual. It’s just that Amazon carries it so much further than almost anyone else is willing to go.
Case in point: Project Nessie. Amazon, which utilizes technology quite effectively, started using an algorithm in 2015 to raise prices across the internet whenever it could.
How? Well, the algorithm predicted when Amazon could raise prices and get other online retailers like Target to raise them too. If the algorithm was correct, then Amazon kept the higher price and everyone paid more. If the algorithm guessed wrong, Amazon went back to the lower price.
Net result: consumers paid about $1 billion in more higher prices while the algorithm ran (supposedly ending in 2019). The bottom line is that Amazon did not want to compete on price. Nobody rational can blame Amazon for not wanting to compete on price. The point is that is both illegal and immoral to prevent competition on price.
Defeat Competition by Making it Hard for Consumers to Leave
Amazon also figured out how to keep consumers away from competitors using Prime. Prime itself is a fairly standard type of device. Free shipping and some perks if you pay to be part of what is essentially a loyalty program. Cool, cool, cool, cool, cool.
Except Amazon wasn’t content to let a good idea work its magic. No, Amazon had to push it too far. They designed their websites so that people would accidentally sign up for Prime and not realize until they got a bill. Then when they wanted to cancel, Amazon would unleash a cancellation process on them so difficult that it you could write a Greek epic poem about it. Not kidding.
Remember the typical Amazon pattern? Guess what it came into play again. Consumers complained. Amazon got all huffy and claimed it wasn’t doing anything but farting rainbows. Then it settled with the FTC for 2.5 billion dollars. Billion. And is supposed to start coughing up refunds this year.
This isn’t simply a US issue. UK courts have allowed a 900 million pound lawsuit against Amazon to proceed. The lawsuit accuses Amazon of suppressing competition against its own branded products by using ‘Buy Boxes’ and algorithms to keep other sellers’ products harder to find and harder to buy.
So that’s the background. A long period of gradually escalating attempts to stifle competition that get more successful as time goes on and Amazon gets to be more and more of a giantosaurus rex.
But a lot of these things are so a day and a half ago. In Part 2, we’ll explore the wonderful world of the current US antitrust suits against Amazon. And that will get us into the really brutal assaults on you, me, and a whole bunch of other people.
Discover more from Get Pretty Fed Up
Subscribe to get the latest posts sent to your email.