Amazon Has Nothing to Fear Where Antitrust Laws are Concerned


There has been a lot of noise in the press lately about Amazon and antitrust intervention—Amazon’s market value passed the trillion dollar market last week joining Apple who reached that figure awhile back. Fear mongers are bloviating left and right claiming that the company has created an infrastructure that poses numerous anticompetitive concerns.

Lina M. Khan writes in the New York Times that Amazon has many faces. According to Khan Amazon has transformed into “a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.” Because of this growth, Khan opines that “the company has positioned itself at the center of e-commerce and now serves as an essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny.”


Khan is propagating liberal dogma and whistling in the wind—any antitrust suit brought against Amazon would fail. The company is selling products cheaper than other companies, delivering the goods faster than other entities and providing excellent customer service: Indeed, Amazon often loses money because their prices are so low. Their platform ultimately benefits consumers. It is true that the loss leaders help Amazon in the long run by building their customer base, but the public isn’t harmed by this.

In a recent lawsuit brought by the Justice Department against American Express imposing anti-competitive restrictions on merchants, the Supreme Court ruled for the defendant. The company was also accused of pressuring merchants to “steer” customers to AMEX.

The Court wrote “In this case, the United States and several States (collectively, plaintiffs) sued Amex, claiming that its anti-steering provisions violate §1 of the Sherman Antitrust Act. The District Court agreed, finding that the credit-card market should be treated as two separate markets–one for merchants and one for cardholders–and that Amex’s anti-steering provisions are anticompetitive because they result in higher merchant fees. The Second Circuit reversed. It determined that the credit-card market is one market, not two. And it concluded that Amex’s anti-steering provisions did not violate §1.”

Held: Amex’s anti-steering provisions do not violate federal antitrust law. We think Amazon is situated better than AMEX.

Timothy Muris, a former chairman of the F.T.C., recently wrote  “Amazon has added hundreds of billions of dollars of value to the U.S. economy,” they  opined, “It is a brilliant innovator” whose “breakthroughs have in turn helped launch new waves of innovation across retail and technology sectors, to the great benefit of consumers.”

Amazon responded to recent criticisms stating “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,” the company said. “Retail is our largest business today, and we represent less than 1 percent of global retail.”

We agree with Muris.


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