AMA­ZON IS TOO PER­VA­SIVE, ANTI-COM­PET­I­TIVE.

Houston Chronicle - - TEXAS INC - Com­men­tary CHRIS TOMLINSON

De­ter­min­ing when a com­pany be­comes so pow­er­ful that it hin­ders com­pe­ti­tion is one of the tough­est tasks in cap­i­tal­ism.

Tens of mil­lions of Amer­i­cans love the con­ve­nience of or­der­ing from Ama­zon.com. But the com­pany is also much more sig­nif­i­cant than most peo­ple know, dom­i­nat­ing ev­ery facet of ecom­merce as it tries to sell ev­ery­thing a con­sumer may want.

Dig­i­tal re­tail­ing tools are highly ef­fec­tive, dec­i­mat­ing brick-and­mor­tar stores. But Ama­zon’s strat­egy goes much fur­ther, gath­er­ing in-depth cus­tomer data and pro­vid­ing the com­put­ing back­bone for on­line sellers. Ama­zon’s dom­i­na­tion of on­line re­tail has gone too far.

Ama­zon started out sell­ing books, but to­day al­most any item legally for sale any­where in the world is avail­able. The se­lec­tion of switch­blades is im­pres­sive, and you can get next-day de­liv­ery with Ama­zon Prime mem­ber­ship.

The com­pany, which briefly hit a $1 tril­lion val­u­a­tion, has moved be­yond merely sell­ing items, but rents web­site space to other re­tail­ers, pro­vides cloud com­put­ing ser­vices, op­er­ates ware­houses, de­liv­ers good for oth­ers and sells ad­ver­tis­ing, which now in­cludes send­ing free sam­ples to loyal cus­tomers. But be­ware, be­cause if you do a great job sell­ing a prod­uct on Ama­zon.com, Ama­zon will hire a com­pany to start mak­ing that same time and will be­gin com­pet­ing with you by of­fer­ing im­pos­si­bly low prices.

To put this in old-fash­ioned terms, Ama­zon owns the mall, rents space to re­tail­ers, con­trols ac­cess to cus­tomers, col­lects data on ev­ery sale while also op­er­at­ing the largest store in the mall. And if one of the smaller re­tail­ers show some suc­cess, Ama­zon will com­pete with them.

Yet that is not enough for CEO Jeff Be­zos, be­cause 90 per­cent of re­tail sales still take place in brick-and-mor­tar build­ings. Ama­zon has bought gro­cery gi­ant Whole Foods, launched Ama­zon Go con­ve­nience stores and opened Ama­zon kiosks in shop­ping malls. The com­pany is re­port­edly look­ing at old Sears stores to add more re­tail and ware­house space.

Most dis­turb­ing, though, is Ama­zon’s de­ci­sion to es­tab­lish 135 pri­vate-la­bel prod­ucts to com­pete directly with third-party re­tail­ers on the Ama­zon web­site.

Demetrius Free­man / New York Times

ABOVE: A pack­age in­side the Ama­zon Ful­fill­ment Cen­ter in Carteret, N.J.

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