In an era when legacy retailers such as Sears and Macy’s are scaling back or going bust, online behemoth Amazon continues to boom. The company is the second-largest retailer in the United States behind Walmart, and last year it became the second company in the world to reach $1 trillion in market capitalization. Perhaps more significantly, it’s also one of the world’s largest tech companies, with reams of data collected from an enormous customer base. Amazon has sold 100 million units of its voice assistant, Alexa, and an equal number of Prime subscriptions.
Amazon’s runaway growth has prompted questions about whether it has become a massive monopoly that has unfairly edged out smaller competitors.
Wharton professor Barbara Kahn points out that subjecting big tech to antitrust laws, which take aim at monopolies that have pushed out competition, is different than enacting legislation to regulate that sector.
“Typically, when you think about antitrust, you think about whether the consumer is worse off. And Amazon has been so far pretty clean on that,” Kahn says, adding that Amazon hasn’t lowered product quality or raised prices. The company also appears to be transparent with its customers.
However, more than half of American households now subscribe to Amazon Prime, so Amazon controls a massive amount of online shopping data in an asymmetric way against the competition.
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