Think twice about Amazon
Oliver Ortega | Tuesday, March 19, 2019
Amazon is taking over the world. I kid, I kid. But the thought comes to mind whenever I hear the latest about the “retail apocalypse” wrecking through a shopping mall near you. Or the up-to-date tally of Amazon CEO and founder Jeff Bezos’s ginormous net worth ($140 billion and increasing by the day). Or, on the rare occasion my penny-pinching, grad-student self is feeling bougie, I meander into Whole Foods, which Amazon owns as of 2017.
More recently, there was all that hullabaloo about “HQ2.” The Onion, venerable satire rag that it is, ran an October 2018 article titled “‘You Are All Inside Amazon’s Second Headquarters,’ Jeff Bezos Announces To Horrified Americans As Massive Dome Envelops Nation.” The comical headline resonates because cities and states had scrambled to offer billions in subsidies for the company to settle in their backyard during the year-long search, showing not only how pervasive a problem corporate welfare is but the extent of Amazon’s power.
Of course, Amazon — valued at more than $1 trillion — is more than a retailer. As investigative journalist Stacy Mitchell reported in The Nation magazine last year, Amazon isn’t so much trying to dominate the market as become the market — for just about everything, in fact. It produces TV shows and movies; publishes books and streams video games; delivers restaurant orders and groceries; manufactures a range of products ranging from batteries to blouses; and offers healthcare and investment services. Amazon is also the largest provider of cloud-computing services, with clients that include the CIA, Comcast and Netflix. And with its growing network of warehouses and delivery vehicles, Amazon is gobbling up business that might otherwise go to the U.S. Postal Service or private mail carriers. Meanwhile, workers at its warehouses have complained of poor working conditions and low pay, while some prominent politicians such as Bernie Sanders have blamed Amazon for widening income inequality.
Around 50 percent of online shoppers start their search on Amazon, a portion that has grown tremendously in recent years. So powerful is its hold on online sales that thousands of its competitors ranging from small businesses to major retail brands to manufacturers have joined its platform to try to compete. But, according to Mitchell, what Amazon often does at that point is replace the third party seller’s product with its own or price them out of business with excessive “fulfillment” fees.
Why should you care? Well, for one, when companies are able to monopolize or nearly monopolize, they set the rules of the game to their own advantage, stifling competition and hurting consumers. In her recent proposal to break up big tech companies, Democratic presidential candidate Elizabeth Warren argues that the government filing antitrust lawsuits against Microsoft in the 1990’s helped clear a path for Facebook and Google to emerge. She cites other instances of trustbusting in U.S. history to claim that really large companies like Amazon should be designated “platform utilities,” entities prohibited from both owning the platform and its participants. So under this proposal, Amazon wouldn’t be able to sell its products over those of third-party sellers if it owns the platform.
There are also larger, societal implications. Because of Amazon’s dominance, what should be a public, democratic marketplace is being pushed over to the private sector, giving the corporation power “over such crucial questions as which books and ideas get published and promoted, who may ply a trade and on what terms, and whether given communities will succeed or fail,” to quote Mitchell.
It’s also straight-up sad to see all these stores closings. Toys “R” Us, Payless ShoeSource and Charlotte Russe have permanently shut down or closed multiple locations. University Park Mall in Mishawaka, a shopping hub for members of the Notre Dame community, has seen five national retailers inside the mall declare bankruptcy and announce they will close by the end of this year, the South Bend Tribune reported.
What do we lose when the interactions that come from the brick-and-mortar experience — taking your kids for Christmas shopping at the local toy store, trying on clothes with your friends at the mall, choosing fruit in the grocery aisle — fade or go away completely? Our social lives, and our power as consumers and workers, takes a hit.
As much as some business analysts might have you believe this seismic change is inevitable, that all these places are closing because of a failure to “adjust,” it’s not that simple. At least not entirely. For sure, there’s something irreversible about the whole affair — online shopping isn’t going away. But we have a choice to keep our dollars local and engage in the face-to-face shopping that for centuries has shaped our social experience rather than go the easier, but perhaps costlier in the long-run, route of one-click shopping.
The views expressed in this column are those of the author and not necessarily those of The Observer.