Amazon’s Antitrust Antagonist Has a Breakthrough Idea - The New York Times
If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.
But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.
Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.
In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.
Ms. Khan disagreed. Over 93 heavily footnoted pages, she presented the case that the company should not get a pass on anticompetitive behavior just because it makes customers happy. Once-robust monopoly laws have been marginalized, Ms. Khan wrote, and consequently Amazon is amassing structural power that lets it exert increasing control over many parts of the economy.
“As consumers, as users, we love these tech companies,” she said. “But as citizens, as workers, and as entrepreneurs, we recognize that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance.”
The analogies with Amazon are explicit. Don’t let the government pursue Amazon the way it pursued A.&P., Mr. Muris and Mr. Nuechterlein warned.
“Amazon has added hundreds of billions of dollars of value to the U.S. economy,” they wrote. “It is a brilliant innovator” whose “breakthroughs have in turn helped launch new waves of innovation across retail and technology sectors, to the great benefit of consumers.”
Amazon itself could not have made the argument any better. Which isn’t surprising, because in a footnote on the first page, the authors noted: “We approached Amazon Inc. for funding to tell the story” of A.&P., “and we gratefully acknowledge its support.” They added at the end of footnote 85: “The authors have advised Amazon on a variety of antitrust issues.”
Amazon declined to say how much its support came to in dollars. It also declined to comment on Ms. Khan or her paper directly, but issued a statement.
“We operate in a diverse range of businesses, from retail and entertainment to consumer electronics and technology services, and we have intense and well-established competition in each of these areas,” the company said. “Retail is our largest business today and we represent less than 1 percent of global retail.”
The April issue of the journal Antitrust Chronicle, edited by Mr. Medvedovsky, features a drawing of a bearded man on the cover right above the words “Hipster Antitrust.” In the middle of an article by Philip Marsden, a professor of competition law and economics at the College of Europe in Bruges, there’s a photograph of a bearded man taking a selfie next to the chapter heading “Battle of the Beards.” It is perhaps relevant that only one of the 12 authors or experts in the issue is female.
The Hipster issue was sponsored by Facebook, another sign that Big Tech is striving to shape the monopoly-law debate. The company declined to comment.
Ms. Khan was not the first to criticize Amazon, and she said the company was not really her target anyway. “Amazon is not the problem — the state of the law is the problem, and Amazon depicts that in an elegant way,” she said.
From Amazon’s point of view, however, it is a problem indeed that Ms. Khan concludes in the Yale paper that regulating parts of the company like a utility “could make sense.” She also said it “could make sense” to treat Amazon’s e-commerce operation like a bridge, highway, port, power grid or telephone network — all of which are required to allow access to their infrastructure on a nondiscriminatory basis.