Many of its initial customers eagerly sought this tax break.Īmazon grew at a time when conservative economists had undermined antitrust law, by focusing antitrust enforcers and judges not on market power, but on efficiency as measured by lower short-term consumer price. At the time online sellers didn’t have to pay sales taxes except in the state where they were located, and Washington was a relatively small state. Bezos located Amazon in Seattle to take advantage of a sales tax loophole that gave his bookseller a competitive advantage over brick-and-mortar rivals.

Fundamentally, Amazon is a political institution designed to consolidate wealth and power.Īmazon’s origin story reflects the reality that the corporation is a creature of policy and politics. But this is not correct Amazon happened to capture control over a whole set of emerging technologies it did not create, at a time when anti-monopoly laws had been weakened to allow such control. The corporation grew in the 1990s and 2000s when new digital technologies were rewiring the American economy, so a lot of people associate Amazon with technology and innovation. The corporation also mirrors the inequality in the American economy, with the world’s richest man presiding over more than a million workers, many of whom make minimum wage.

It is no longer just an online retailer, but is effectively an economy in itself, adding on to its cloud computing, retail and logistics arms everything from podcasting to low-orbit, satellite-delivered broadband to home security to microchip development to prescription drug distribution to trucking to military contracting. This week, the corporation announced that third-party businesses in the US sold 1bn products through Amazon’s marketplace. The scale of Amazon’s empire is breathtaking.

But in truth, it doesn’t matter, because why Amazon exists in its current form, for good or ill, is a function not of one talented man, but of a legal regime that enables and encourages monopoly power. It’s not clear what this announcement means, whether Bezos wants to genuinely give up power or whether he wants to continue making decisions while having someone else testify before Congress or in potential antitrust proceedings.

Monopoly empire amazon