Amazon's unrivalled power threatens jobs, communities and democracy: monopoly critic Stacy Mitchell
Why it's crucial — now more than ever — to wrest power from corporations like Amazon
If Amazon didn't already dominate online shopping habits before COVID-19, the pandemic foisted it on many households as a matter of necessity. Almost overnight, it became a lifeline in the so-called "touchless economy."
But while COVID-19 has meant huge revenues for the corporation, it has also magnified the consequences of its monopoly power and renewed calls for antitrust reforms.
Stacy Mitchell is a fierce critic of monopolies. She is co-director of the Institute for Local Self-Reliance and the author of numerous influential reports on Amazon's power. She has also testified about the subject before the U.S. Congress.
Last winter, Mitchell helped found Athena — a coalition of almost 50 labour, small business and community organizations working together to challenge Amazon's grip on economic and political power.
She spoke to The Sunday Edition's Michael Enright about why it's crucial — now more than ever — to wrest power back from corporations like Amazon.
Here are excerpts from that conversation, edited for clarity and condensed.
What exactly is Amazon? It's certainly not a retailer like anyone else.
That's a great question, because Amazon has got its hands on so many things these days that it can be hard to figure out exactly what it is.
This is a company that dominates online shopping, that provides the backbone for much of the world's internet and data storage, that is now shipping more packages than the U.S. Postal Service, that produces hit television shows and movies, that manufacturers a growing array of products. They publish books, they're making big forays into health care, they dominate this emerging field of artificial intelligence, and on and on and on it goes.
I think the way to understand Amazon is that it's an infrastructure company. Jeff Bezos's goal is really to own the rail lines — the pipelines through which a growing share of our commerce, our information and our services flow.
And Amazon not only provides the infrastructure that other companies rely on; it also competes directly against them. That's inherently a conflict of interest.
I'm curious to get some idea of their business tactics. For example, they have a history of selling products at a loss. How does that work?
For Amazon's first six years in business, they lost about $3 billion selling books at a loss. Wall Street gave them this very long leash and said we're happy to support all of these losses because we recognize that this is a company that has a monopoly strategy and we know that we may not profit from that today, but we will down the line.
Lots of other bookstores went out of business. Publishers went out of business. And Amazon now captures more than half of all book sales, and they publish a growing number of books. And they've consistently employed that strategy all the way through their history.
The way to understand Amazon is that it's an infrastructure company. Jeff Bezos's goal is really to own the rail lines — the pipelines through which a growing share of our commerce, our information and our services flow.- Stacy Mitchell
Amazon says that its popularity is due to something called "customer obsession" — the low prices that we, as consumers, want. What's wrong with giving people what they want and what they need?
As consumers, I think we're best served by having an open, competitive market. But more importantly, it's worth remembering that we're not just consumers. We're people who also need to earn a living. We're people who produce value, who work, who maybe have a small business, who live in communities that we want to be vibrant and to have economic activity, [who want] our streets lined with healthy businesses.
We're also citizens and we want to live in an economy that's open and where everyone's on an equal playing field.
There's a fear that after the COVID-19 pandemic goes away, there will be a retail pandemic — an apocalypse almost — with small businesses failing, neighbourhood shops disappearing. What does that mean for communities?
Independent small businesses have been losing market share and declining in numbers for a couple of decades now. Now we have this event that has shuttered businesses. And at the same time, at least here in the U.S., we've made a bunch of policy choices that have given big handouts to big companies while leaving small businesses with very limited help to get through this.
So we could really see an extinction-level event of the businesses that line our streets and our neighbourhoods. And Amazon is very much looking to capitalize on this and seize even more market power.
I thought, as a foreigner, that the U.S. had a pretty severe regimen of antitrust laws. Where's the antitrust muscle now?
Anti-monopoly has been a part of U.S. history for a long time and was particularly robust beginning in the 1930s and through the 1970s. And then things really shifted, [when] this new school of thinking associated with the University of Chicago came along.
Antitrust had really been about making sure that markets were open and competitive [and] keeping corporate power in check so that it didn't overwhelm democratic institutions. The Chicago School said that those things don't matter: the only goal of antitrust should be efficiency, and big companies are naturally more efficient and therefore we should actually favour consolidation. So they essentially turned antitrust policy on its head.
Their ideas were implemented by Ronald Reagan and subsequently by both Democratic and Republican administrations. They didn't overturn the laws, but they changed how they were interpreted. And it's actually, in many cases, much more of a pro-big-business approach than an anti-monopoly approach.
[With COVID-19] we could really see an extinction-level event of the businesses that line our streets and our neighbourhoods. And Amazon is very much looking to capitalize on this and seize even more market power.- Stacy Mitchell
Corporate America hates the idea of competition, doesn't it?
Yes, exactly. Large corporations played a big role in dismantling our antitrust policies. And in the years since then, as they have grown in power, they have systematically used that power to alter our tax laws.
They don't want anti-monopoly. They want a government that works for them.
And this really goes to the more fundamental issue. We can talk about the importance of competition and the bullying in the marketplace. But, ultimately, the fear that I have is that we're losing democracy. That the Congress is effectively run by corporations. That Amazon has a lot more power than the rest of us do combined, in shaping the future of the country.
But how does a state, city or small community — or indeed the federal government in the U.S. — try to contain a corporation as powerful and as big as Amazon?
Amazon, in some respects, seems like this modern kind of company. But it is in fact reminiscent of problems that we've encountered before — and particularly of the railroads. Back in the late 19th century, when the railroad first came along, a handful of industrialists gained control of the rails and they used that to disadvantage their competitors in other industries by not letting them ship or charging them really high rates.
This is exactly what we see Amazon doing today. We took care of the railroads by passing a law that said if you're a railroad that's all you get to do. You can't have interests in any other companies. We should do the same with Amazon.
And then I think, secondly, we need to think about that platform — the online shopping site. Is this a kind of public utility? Has this become so central to commerce that it deserves to have a little bit of regulatory oversight? Do we need to make sure that the platform is fair and neutral?
Ultimately, the fear that I have is that we're losing democracy.... That Amazon has a lot more power than the rest of us do combined, in shaping the future of the country.- Stacy Mitchell
Where do our responsibilities lie as consumers in dealing with Amazon's power?
I would invite everyone to consider other alternatives for your shopping. But I think it's really important to remember that it's not on us to solve this as consumers — and frankly, we can't. It would be very difficult to somehow mount enough of a boycott to make any difference in Amazon's power.
What we really need to do is recover our role as citizens and demand that our policy-makers intervene in ways that can check Amazon's power and create a fairer and more open marketplace.
And, along the way, I think that's really important to solving some of our biggest problems — like inequality. So many communities have been left behind. They're losing their local businesses. They're working these low-wage gig jobs for Amazon and other companies.
So this is not just about having a fair marketplace or checking the power of a company. It's also about how we have a more equitable society.
Click 'listen' above to hear the full conversation.