Stemming Amazon

Stemming Amazon

Tech companies, like Amazon, have grown to such proportions that they behave like monopolies, manipulating and dictating the market. We look at how Americans feel about this development and what is likely in store for the tech giants.

Anjali Krishnan
Anjali Krishnan

From A to Z, from groceries to gadgets, music to movies, virtual assistants to prescription drugs, Amazon brings everything to one's fingertips and, by extension, to one's doorstep. In the process, the company has grown to Amazonian proportions, gobbling up competition and perpetuating a retail crisis that is yet to be fully comprehended.

The tech giant owns and operates more than forty subsidiaries ranging from Audible, Whole Foods, Goodreads, IMDb, Amazon Robotics, Shopbop, TeachStreet, Twitch, Zappos, and the latest, the iconic MGM studios and is invested in many more.

From books to breakfast cereal, Amazon has come a long way in about two and a half decades, and its Prime has over 200 million subscribers. The e-commerce company grew to gigantic proportions on the internet unhindered and largely undetected, compared to big-box stores like Walmart and Target, which often faced local businesses' resistance.

Amazon is recognized as one of the Big Techs with a share and unparalleled dominance of its market to be considered a monopoly. The trillion-dollar company has been drawing the ire of small businesses and much criticism for its business practices for years.

What Americans Want

Tipp Poll survey conducted in late April asked, “Please tell me the extent to which you support or oppose breaking up Amazon to prevent it from becoming a potential monopoly.”

  • 53% were in favor of breaking up the company
  • 30% were opposed to breaking up the company
  • 17% did not have an opinion on the topic

There are some surprises in the data, with the youth and the wealthy showing a strong inclination to check Amazon’s explosive growth. The demographic groups that expressed strong support for breaking up the company are

  • 38% of 18-24 year olds
  • 39% of 25-44 year olds
  • 38% of Hispanics and Blacks
  • 35% of those with $75,000+ income
  • 37% of Democrats

It is also interesting to note that 35% and 34% of Republicans and Independents were strongly opposed to the move.

What Amazon Has

Amazon is a one-stop shopping destination, and not just for knick-knacks or knee socks. The tech juggernaut is into cloud computing, satellite internet service, home security, military, and intelligence contracting, logistics, and based on its recent acquisition, the James Bond franchise.

MarketWatch/Visual Capitalist 

It is worth mentioning that Jeff Bezos, the founder, did not invent or innovate a ‘disruptive technology.’ He leveraged a new medium of doing business and did it exceptionally well. Amazon disrupted the marketplace by taking advantage of existing laws that exempted online sellers from sales tax outside its state, relying on watered-down antitrust regulations and undercutting smaller sellers.

Their business strategy is a gem. Amazon brought pretty much everything on one e-commerce platform, offered free shipping with free movies, TV, and music, and exploited the consumers’ innate desire for hassle-free shopping. Why bother comparing prices, or shopping around, when the packaged deal is ‘easy?’

What Amazon Does

In return, the company takes close to a thirty percent cut on sales made on its platform from third-party vendors, earning about $60 billion in 2019. Amazon has many means to coerce smaller players to play by its rules. It forces sellers to use its marketplace to utilize its logistics. Being successful on the platform largely rests on vendors buying into its other services, such as Amazon fulfillment and advertising services.

Amazon’s primary venture, the online retail space, is a double-edged sword. It is the marketplace and the seller - and there is the hornet’s nest. Invariably, the company pushes its own products over others. It is safe to say Amazon changed the way we shopped and did indeed sound the death knell to many brick and mortar stores and mom-and-pop establishments. Is it ironic that Amazon is buying up malls it has defunct to convert them into warehouses?

Like any other online venture, Amazon operates on and profits from the data it collects and computes from its platforms, apps, and sites. It boggles to mind to even consider the amount of personal data regarding shopping habits, reading material, entertainment preferences, lifestyle choices, credit/debit card information, and personal addresses the tech giant has on its customers.

Amazon has a litany of complaints against them, from outsourcing blue-collar jobs to their anti-union policies, to employee strikes over dismal working conditions, to tax evasion and the amount of data they collect from their customers. The company is facing antitrust lawsuits and scrutiny into some of its acquisitions.

How Americans Feel

People have long had concerns about the juggernaut’s businesses practices and disquiet is evident in the poll data.

  • 73% are concerned smaller businesses will be at a disadvantage
  • 73% believe consumers will have less privacy
  • 71% say consumers will pay a higher price
  • 66% feel consumers will have fewer choices
  • 73% worry that consumer data will be misused or compromised

While Democrats and Republicans polled almost the same regarding price disadvantage and smaller businesses being in a disadvantageous position, the Democrats were a couple of points higher when it came to the other areas of concern.

What’s In Store?

There are calls to bring Amazon under “public utility-like standards of non-discrimination, fair dealing, and reasonable pricing.” Laws could be formulated to ensure that the company does not impose unfair terms and costs on its sellers.

An authority could oversee that the company does not misuse its privilege and play favorite among its vendors. To stop Amazon from growing into a full-fledged monopoly, its various divisions may have to be separated to remove conflicts of interest.

Making smaller, independent entities of its various business arms could negate the threat of power in the hands of a few. Companies like Amazon make it abundantly clear that countries will need effective and stringent antitrust laws in place in the future.

While its door delivery services have been a boon during the pandemic, Amazon has many lessons for lawmakers, economists, and policymakers. Even as it dominates and expands, the company displays the immense potential of e-commerce and probably the future of business.


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TIPP Takes

EU Proposes Stricter Anti-Disinformation Code

  • The EU wants tech giants such as Facebook and Google to do more to tackle disinformation on their platforms.
  • The EU has announced plans to beef up its code of practice on online disinformation to prevent digital ad companies from earning profits from fake news.
  • The new proposals from the European Commission, the EU's executive arm, come amid concerns about the role of social media and tech giants in the spread of false information online, particularly during the coronavirus pandemic.
  • The proposals build on a voluntary and nonbinding code of practice launched by the bloc in 2018. Google, Facebook, Twitter, Microsoft, TikTok, and Mozilla have signed on to the code as well as several advertisers. The new guidelines aim to push signatories to go further with their commitments.
  • The stricter code calls for increased transparency about why certain adverts are displayed and for platforms to share information with each other about adverts that have been rejected for spreading debunked content.

The Indian Government Wants To Break Messaging Encryption, WhatsApp's Suing

  • WhatsApp is taking India’s government to court over a new mandate that it claims will lead to mass surveillance of users in the company’s biggest market.
  • WhatsApp’s suit focuses on a provision stating that all major messaging apps—including encrypted platforms like WhatsApp, Signal, and Telegram—need to give Indian authorities the power to “trace” private messages.
  • Until now, when authorities approach WhatsApp with requests for information, those authorities need to ask about a specific account that they can prove is using the platform for something criminal.
  • Under the new mandate, a WhatsApp user could have their account scrutinized by authorities if they’re trying to fact-check or raise alarms about a piece of problematic content.
  • There’s also the fact that it’s impossible to make an encrypted platform traceable without breaking that encryption, a move that will compromise the security of WhatsApp users to potential hacks.

Tesla 'Bows To Pressure,' Announces User Data To Be Stored In China

  • Tesla has bowed to Beijing pressure and announced that it will move Chinese user data to a new center in China, raising concerns that the move will set a precedent for other tech companies dealing with the Chinese Communist Party (CCP).
  • According to Reuters, the company said in a Weibo post on Tuesday that it would expand its network of data centers and store all data generated by the cars it sells in China within the country's borders.
  • Tesla currently manufactures Model 3 sedans and Model Y SUVs in China, the world's largest automobile market and Tesla's second-largest market.
  • The move comes amid widespread concern that Tesla vehicles could endanger China's national security.

Iraq Militia Commander Arrested Under ‘Anti-Terrorism’ Law

  • Military says Qasim Muslih, Anbar head of the Popular Mobilisation Forces, has been arrested.
  • Two security sources with direct knowledge of the arrest told Reuters news agency that the militia chief was arrested in Baghdad for involvement in several attacks, including recent assaults on Ain al-Assad air base, which hosts American and other international forces.
  • Muslih is the Anbar province head of the Popular Mobilisation Forces (PMF), a grouping of mostly Shia militias backed by Iran, which the United States regards as the biggest threat to security in the Middle East.
  • The airbase was attacked at least four times this month with rockets and an unmanned aerial surveillance system, in incidents seen by many Iraqis as reflecting US-Iranian tensions.
  • But a security source told the AFP news agency his arrest was in connection with the killing of two civil society activists in recent weeks.
  • Anti-government campaigner Wazni was shot dead outside his home by men on motorbikes in the holy shrine city of Karbala, sending protest movement supporters onto the streets.
  • Killings, attempted murder, and abductions have targeted more than 70 activists since a protest movement erupted against government corruption and incompetence in 2019.

Paris Hotel Cleaners Claim Landmark Win After 22-Month ‘Battle For Dignity’

  • Cleaning staff at an Ibis hotel in Paris hailed a historic victory after an almost two-year-long battle to improve working conditions and pay.
  • The nineteen women and one male colleague had gone on strike for eight months in July 2019, before they were placed on state benefits along with other hotel workers at the start of the Covid-19 pandemic.
  • The cleaners obtained the right to work longer hours at a slower pace, take 30-minute breaks, and use a punch clock to ensure they receive overtime pay.
  • Union representatives said the deal would ensure monthly pay rises between 250 and 500 euros, with some staff moving to full-time work.
  • Hotel cleaners have staged strikes and protests over pay and working conditions at numerous French establishments in recent years. However, the Covid-19 pandemic has stalled their momentum by leaving the industry in crisis.

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