I’ll admit, I’m not the biggest enthusiast of board games…
But the game I never liked playing is Monopoly.
It takes so impossibly long for one player to crush the competition that I lose all interest in the game long before it comes to its conclusion.
One person I bet is an excellent Monopoly player is Jeff Bezos.
The Amazon CEO and richest man on earth built his global retail empire from the ground up.
He evidently has the patience to play the long game and the determination to crush his competition wherever he goes.
Already almost a trillion dollar company, Amazon is going from industry to industry to crush opponents and wield a monopolistic dominance.
One hundred years after antitrust laws proved inadequate to break up the monopolies dominating the US economy, the letter of the law again falls short against the 21st century giants.
Governments have emerged as Amazon’s biggest threats. Still, it’s by no means certain that lawmakers will be able to hammer Amazon into smaller pieces.
“It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them,” writes Lina Khan in the Yale Law Journal.
Different century, same problem
In 2020, it’ll be 100 years since big US monopolies dealt a big blow to the US government.
The United States Steel Corporation dominated its industry and gobbled up one competitor after another. It became the world’s first billion dollar company in 1916.
The saying goes if something looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
Not to the US Supreme Court.
In a landmark case in 1920, America’s highest federal court ruled that US Steel did not break antitrust laws and was therefore not a monopoly in restraint of trade.
Antitrust laws were out of date and couldn’t prevent a few massive companies from dominating the US economy.
Today we find ourselves in a similar situation.
Big Oil and Big Steel have been replaced by Big Tech as this era’s dominant companies with monopolistic qualities. Most notably, Amazon and Google.
Jeff Bezos is the poster boy of the American Dream. He started his company Amazon out of his garage and things snowballed from there.
The way Amazon has competed itself into its current dominant position is impressive, but it also raises questions about whether or not the company now abuses its competitive advantages.
Amazon may not be the only seller on the planet. But when competitors want to sell something online (an increasingly important aspect of business), they often find themselves at the mercy of Bezos’s company.
Amazon owns a crucial piece of the online commerce infrastructure. Other sellers have to go through them to offer their products to consumers.
This clearly puts it at a massive advantage.
For one, it has a lot of data on its competition, like product pricing, which makes it easy for Amazon to undercut rivals.
For another, Amazon can give itself preferential treatment to ensure consumers see its own goods first.
Last year the company accounted for 44% of e-commerce sales in the US; this year that’s expected to rise to 49.1%.
That’s not a monopoly in the strictest sense of the word, but it’s a pretty darn powerful position to be in.
The word “antitrust” has been buzzing around the Amazon offices for ages, but so far it’s managed to avoid government action on that front.
And that’s no coincidence…
When Jeff Bezos set out to play real-life Monopoly, he wasn’t interested in Leicester Square.
He sniffed at Fleet Street and Bond Street. He didn’t even care about Mayfair. He wanted every square on the board.
Like a true chess master, he was thinking fifty steps ahead…
Two decades ago Bezos set himself the goal of creating a bookstore that matched the great Library of Alexandria.
To most people that would forever remain an unattainable lifetime dream; to Bezos it was only step one in his quest to sell everything to everyone.
But to become as big and popular as it is now, Amazon had to do two things.
It had to skirt antitrust laws so governments wouldn’t break it up. And it had to build a brand consumers love in order to make an attack on the company a politically unpopular move.
So far, so good.
Amazon built its empire on delivering value to consumers. That’s clever, because antitrust laws exist primarily to protect consumers.
“Antitrust doctrine views low consumer prices, alone, to be evidence of sound competition,” says Lina Khan.
“By this measure, Amazon has excelled; it has evaded government scrutiny in part through fervently devoting its business strategy and rhetoric to reducing prices for consumers.”
If no harm falls on the consumer, Amazon’s in the clear. Even if the company’s power grab is to the detriment of rival producers and the health of the market as a whole.
“With its missionary zeal for consumers, Amazon has marched toward monopoly by singing the tune of contemporary antitrust.”
It seems Bezos’s shrewd intellect and outdated antitrust laws keep Amazon out of the woods. And as long as it doesn’t get broken up by antitrust law, the company is only going to get bigger and bigger.
There are lots of opportunities which it still has yet to take. It could muscle in on health, logistics, banking, all kinds of industries.
Of course, the bigger it gets, the harder it’ll be to fend off antitrust law suits.
“In a way, its biggest weakness is the fact that it’s so dominant,” says tech editor Sean Keyes.
“Unless Walmart gets its act together, Amazon’s only equal is the US government.”