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Would Antitrust Legislation Help or Hurt Amazon Sellers?

Amazon
Would Antitrust Legislation Help or Hurt Amazon Sellers?

Amazon said proposed legislation introduced in Congress this month would hurt buyers and sellers, while an organization of online sellers claims Amazon has monopoly power over its merchants and supports the antitrust proposals.

The BBC reported on the five bills aimed at limiting the power held by “Big Tech” companies when they were introduced earlier this month, writing:

“The bills were drafted after a 16-month investigation into the powers of Amazon, Apple, Google and Facebook. They address topics including data, mergers, and the competitive behaviour of these companies – which could ultimately lead to them being forced to sell some assets.”

On Tuesday, the Online Merchants Guild (OMG), which describes itself as representing small and micro ecommerce businesses that rely on Amazon as a primary source of income, said even retail giant Wal-Mart cannot compete with the over 100 million US households “whose attention has been locked on Amazon via their Prime membership.”

“Simply put, small businesses who want to access the national eCommerce market have no choice but to use Amazon’s railroad on Amazon’s terms, which often benefit Amazon, rather than consumers or the market generally,” the OMG said in its press release – you can find the full text on OnlineMerchantsGuild.org.

Amazon released its own statement about the proposed legislation on Tuesday from Brian Huseman, Vice President of Public Policy, who warned of unintended consequences:

“We are still analyzing the bills, but from what we can tell so far, we believe they would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store, and tens of millions of consumers who buy products from Amazon.

“More than a half million American small- and medium-sized businesses make a living via Amazon’s marketplace, and without access to Amazon’s customers, it will be much harder for these third-party sellers to create awareness for their business and earn a comparable income.

“Removing the selection of these sellers from Amazon’s store would also create less price competition for products, and likely end up increasing prices for consumers. The Committee is moving unnecessarily fast in pushing these bills forward.

“We encourage Chairman Cicilline and committee members to slow down, postpone the markup, and thoroughly vet the language in the bills for unintended negative consequences.”

The following five bipartisan bills were drafted by lawmakers on the Antitrust Subcommittee, which last year completed a 16-month investigation into the state of competition in the digital marketplace and the unregulated power wielded by Amazon, Apple, Facebook, and Google.

  • The “American Innovation and Choice Online Act” to prohibit discriminatory conduct by dominant platforms, including a ban on self-preferencing and picking winners and losers online. The bill is sponsored by Chairman Cicilline and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms. The bill is sponsored by U.S. Rep. Hakeem Jeffries (NY-08) and co-sponsored by Ranking Member Buck.
  • The “Ending Platform Monopolies Act” eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition. The bill is sponsored by U.S. Rep. Pramila Jayapal (WA-07) and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act” promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements. This bill is sponsored by U.S. Rep. Mary Gay Scanlon (PA-05) and co-sponsored by U.S. Rep. Burgess Owens (UT-04).
  • The “Merger Filing Fee Modernization Act” updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. This bill is sponsored by U.S. Rep. Joe Neguse (CO-02) and co-sponsored by U.S. Rep. Victoria Spartz (IN-05).

The bills were referred to the House Judiciary Committee, whose members spoke on the bills on Tuesday with a theme, “Building a Strong Online Economy,” and you can find more information on the House of Representatives website.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

One thought on “Would Antitrust Legislation Help or Hurt Amazon Sellers?”

  1. Amazon has so much power that Standard Oil and US Steel would have been jealous.
    Almost everything sold is available there.
    They pretty much control the prices, and do everything that they can to drive them down.
    They decide who sells there, at what price, and always on their terms.
    They control the distribution through their own fulfillment and logistics network, and receive dramatically lower prices than anyone – ANYONE – else receives.when they do partner with another logistics company.
    They dictate the terms of returns, and force sellers\manufacturers to accept ANYTHING returned, at their expense of course.
    They have 100m+ people locked in by Prime, which they get for perks like Netflix and others.
    If that’s not enough, tens of millions of homes also have Alexa suggest buying things on Amazon.
    If a company does start to make inroads, Amazon simply buys them.
    They’re not a monopoly, they are the Borg. Resistance is futile.

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