Amazon Is at the Forefront of Antitrust Criticism

Marco Verch / Flickr

In early 2017, an unknown law student published an article¬†titled¬†“Amazon‚Äôs Antitrust Paradox” in the Yale Law Journal. The 93 heavily footnoted pages received 146,255 views, which is like a best-seller in the world of legal treatises.

The author, Lina Khan, argues against a standard consensus within antitrust circles that dates back to the 1970s when regulations were redefined to encourage low prices on items. Due to the fact that Amazon (AMZN) is known for its affordable deals, the business is exempt from federal intervention.

Khan disagrees with the sentiment, saying the company should not be exempt from anti-competitive regulations merely due to the fact that it appeals to customer pricing standards. The marginalization of archaic monopoly laws and Amazon’s amassed structural dominance, which exerts control over various parts of the economy, have been cited as cases that run contrary to antitrust circles.

In Khan’s view, Amazon, through its direct competition against other companies, contains an inherent edge that threatens fair competition, noting, “The long-term interests of consumers include product quality, variety and innovation ‚ÄĒ factors best promoted through both a robust competitive process and open markets.”

The criticism has sparked controversy regarding whether or not consumers should trust Amazon, or any large company, to dictate the future for consumers.

Timothy Muris and Jonathan Nuechterlein, who previously worked in the Federal Trade Commission, published a response to Khan’s argument, in which they detailed Amazon as a “brilliant innovator,” before further stating that their, “breakthroughs have in turn helped launch new waves of innovation across retail and technology sectors, to the great benefit of consumers.” Their¬†rebuttal, named “Antitrust in the Internet Era,” was funded by Amazon.

In a statement made to The New York Times, an Amazon spokesperson declined to comment on Khan’s paper or reveal whether a monetary incentive was provided to Muris and Nuechterlein, saying,

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. Retail is our largest business today and we represent less than 1 percent of global retail.

A further critique of Khan‚Äôs message emerged from Herbert Hovenkamp, an antitrust expert of the University of Pennsylvania Law School, who noted that if Amazon and other large companies were targeted, the government may, “quickly drive the economy back into the Stone Age, imposing hysterical costs on everyone.”

In her closing message, Khan reminds readers that she believes monopoly regulators are forming plans in the short-term. Her paper has been compared to Isa Terbells’, a journalist who investigated Standard Oil and outlined the outward antitrust disparities akin to John D. Rockefeller, which Khan sees as similar to that of Jeff Bezos.

More: Amazon’s Antitrust Paradox
Photo: Marco Verch / Flickr

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