American lawmakers who spent the last year investigating the practices of the world’s largest tech giants said this week that Amazon, along with three other companies exercised and abused it’s monopoly power and called for the most radical changes to antitrust laws in half a century!
In a 449-page report, lawmakers said the four companies had turned from “scrappy” start-ups into “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”
The lawmakers said the companies had abused their dominant positions, setting and often dictating prices and rules for commerce, search, advertising, social networking and publishing.
To amend the inequities, the lawmakers recommended restoring competition by effectively breaking up the companies, emboldening the agencies that police market concentration and throwing up hurdles for the companies to acquire start-ups. They also proposed reforming antitrust laws, in the biggest potential shift since the Hart-Scott-Rodino Act.
Some interesting parts about Amazon mention it’s bullying, cruel treatment of third party sellers, which includes unhelpful Seller Support and unjustified suspensions with very limited options to appeal.
As Stacy Mitchell, Co-Director of the Institute for Local Self-Reliance, noted during the Subcommittee’s hearing on Innovation and Entrepreneurship, “Among the most egregious examples of Amazon’s arbitrary treatment of sellers are its abrupt suspensions of their accounts, frequently made without explanation. Once Amazon suspends a seller’s account or delists its products, the business is left with largely ineffective remedies as they watch their sales disappear. Sellers shared with Subcommittee staff that communications to Amazon’s Seller Support Central generally prompt automated, unhelpful responses, which may be entirely unrelated to the specific case, question, or concern raised by the seller.”
Amazon can treat sellers in this manner because it knows that sellers have no other realistic alternatives to the platform. As Mr. Barnett noted in his testimony: “When there is bullying by an extremely successful company with all these partners that continue to do business with it, one has to ask how is it that such a successful business maintains partnerships with so many companies while bullying them. It is because of the power asymmetry . . . that companies tolerate this.“
Additionally, the sellers interviewed by Subcommittee staff generally indicated that Amazon’s customer service and treatment towards them has declined significantly in recent years. One business owner, who has been selling on Amazon for over a decade, told Subcommittee staff that in the past a seller could get meaningful assistance by talking to an Amazon representative over the phone.
He said, “I used to think that Amazon was a partner,” but, now, “I don’t think they care about the third party seller . . . . They treat us as a commodity.”
Internal Amazon documents suggest that the company’s hyper-focus on a cost-cutting strategy to adopt automated processes for nearly everything —which Amazon refers to as “HOTW” or “Hands off the wheel” — combined with the platform’s monopoly power over sellers may be to blame for Amazon’s atrocious levels of customer service.
Amazon has recently monetized the degradation of its seller services, rolling out a program where sellers can pay an extra fee for a dedicated account representative. Sellers are supposed to pay for representatives to help them solve the very problems that Amazon created in the first place. Many sellers say, however, that even with paid Amazon account managers they are often unable to get their issues resolved. One seller told Subcommittee staff, “It is a problem that an algorithm can make a decision that just shuts off my income stream and there’s nothing I can do to get it back . . . . The only thing I can do to get it back is pay $6,000 a month for a dedicated rep and even then, it doesn’t always work.”
If you are not planning to read the whole document, start with page 267, which addresses Amazon and the company’s abusive treatment of third party sellers.
Here I am including some screenshots of the most interesting pages, which I collected out of the whole document, after entirely reading it:
And here you can view the whole document:
[documentcloud url=”https://www.documentcloud.org/documents/7222833-House-Tech-Antitrust-Report.html”]
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