I believe Amazon is so concerned about this possibility that it may result in it choosing an area near Washington, DC, for its second headquarters. Amazon operating as separate companies reduces the advantage it has today operating as a single corporation. However, if the federal government by action (or threat of action) forces Amazon to break up, Amazon will effectively be killed.
I don't believe any company in existence can kill Amazon. I believe AWS becoming a standalone company is a real possibility. To some extent, AWS is becoming a pariah as companies are concerned about contracting a service owned and operated by a major competitor like Amazon.
#IS AMAZON A MONOPOLY DRIVER#
AWS is a big driver of profit and helps fund Amazon's litany of initiatives such as faster deliveries to customers. Q2 revenue at AWS represented 11% of Amazon's total Q2 sales and AWS revenue surged 49% to $6.1 billion while generating $1.6 billion in operating income. I have spoken publicly since 2013 that Amazon could operate as five different companies: The key phrase to listen for in discussions and rhetoric about Amazon is "restraint of trade." Even if no new laws are passed, the threat of new laws may have the effect of prodding Amazon to create separate companies. Due to the growing number of voices in business and lower courts raising objections to Amazon's rate of growth and market share, Congress and the Supreme Court won't be able to avoid Amazon as a topic of discussion and review. If Trump is reelected, it is plausible that Trump will pressure Congress and the Supreme Court to double down in evaluating options for introducing new laws or changing existing laws that could force Amazon to break up.
Trump recently insinuated in a Tweet that Amazon has a "huge antitrust problem". President Donald Trump has been very vocal in his criticism of Amazon. However, Congress has the power to enact new laws, and the Supreme Court can reinterpret legal precedents regarding what constitutes a monopoly. It only means that under current laws, Amazon is safe from being labeled a monopoly. If Amazon isn't breaking any laws, does this mean the federal government can't do anything to the company? Not so fast. (Standard Oil also controlled 90% of oil production in the U.S.) Amazon is not restraining trade, which was the Supreme Court's justification for ordering Standard Oil to be broken up. There are thousands of large and small retailers and tech companies operating today, with new entrants entering the market on a continuous basis. However, imagine the outcry if Amazon comes close to controlling 50% of all retail sales.Īmazon also can't be declared a monopoly because it doesn't exhibit monopolistic behavior, defined as "when one provider is the dominant provider in the market and that provider is able to prevent others from offering competing products and services." In other words, even though Amazon is growing its market share, it doesn't justify referring to Amazon as a monopoly. According to the United States Department of Justice, "as a practical matter, a market share of greater than 50% has been necessary for courts to find the existence of monopoly power." will set off alarm bells, correct? False. Obviously, Amazon's controlling 10% of retail sales in the U.S. By 2020, the number is estimated to increase to 10% of all retail sales in the U.S. and only 1% globally, according to Jodi Seth, head of policy communications for Amazon. Amazon is big, but it controls only 5% of all retail sales in the U.S.
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