this post was submitted on 23 Apr 2024
1 points (100.0% liked)

Economics

288 readers
2 users here now

founded 1 year ago
 

Amazon's grown so large that it's causing price inflation online, writes Wall Street Journal reporter Dana Mattioli in "The Everything War," out Tuesday.

Why it matters: The book chronicles the Seattle company's rise from scrappy underdog to a massive conglomerate — and suggests that it has hurt other businesses and consumers.

The big picture: The book echoes the allegations in the antitrust lawsuit the Federal Trade Commission filed against the retail giant last year, and offers an inside look at how that price inflation happens. (Amazon disputes the portrayal.)

Flashback: For a long time, Amazon was a source of disinflation, a place where you could get the lowest prices around, per the book. 

  • For years, the company undercut the competition to build market share — it didn't need to make money in its retail business thanks to the steady stream of profits coming from its cloud computing arm.
  • FTC commissioner Lina Khan criticized this strategy as "predatory pricing," in a now-famous paper she wrote when she was a student at Yale Law School.

Once it achieved scale — Amazon now makes up about 40% of all online retail — the company started raising prices on the products it sells directly. 

  • It also started charging the businesses that sell products on the site's marketplace "monopoly rent," says Mattioli, who spoke to Axios ahead of the book's publication.
no comments (yet)
sorted by: hot top controversial new old
there doesn't seem to be anything here