In The Everything War (Little Brown, Apr.), journalist Mattioli traces Amazon’s insatiable quest for growth.
You write that Amazon is a perfect lens into “what befell the American economy and its business climate from the 1990s to the present.” How so?
Bookstores were the canary in the coal mine as the first companies really impacted by Amazon, but that is not where Amazon’s dominance ended. When the company entered retail, people thought it might stop there, but now they’ve expanded to the point where companies that don’t even directly compete with Amazon are coming up with Amazon-proofing plans because they’re worried about this company eating their lunch. In the space of five years, Amazon built out this giant logistics network that by 2023 eclipsed UPS, a company that’s been around for more than 100 years, in terms of how many parcels it delivers. I think that’s a cautionary tale for lots of corporate giants. Amazon is also at the forefront of other trends taking hold of corporate America, such as the gig economy. If you think about how Amazon has cemented its logistics success, it’s because they have third-party contractors who show up to your doorstep and mine in Amazon vans and Amazon uniforms. These are gig workers, right?
What are the implications of Amazon’s dominance?
The decisions Amazon makes, and the way that it operates, have far-reaching consequences. Amazon affects U.S. employment because they’re the second largest employer in the country. The Federal Trade Commission’s 2023 lawsuit accusing Amazon of operating as an illegal monopoly says the company has so much outsized power in online retail that even if you shop on a competitor’s website, you’re paying higher prices for whatever you’re buying because of Amazon’s dominance and the power it has over third-party sellers.
Where should one draw the line between savvy business strategy and misbehavior requiring regulatory scrutiny?
Amazon is the biggest cloud computing company in the world, the biggest e-commerce and package delivery company in America, and the third largest digital advertising company in the country. It’s like you have to interact with them in some way or another. There’s really no analogue, and that sort of leverage is where I think things get interesting. Amazon often uses their cross-industry dominance to gain advantages that other companies couldn’t get. That’s where it crosses the line in some ways, or it could be interpreted by regulators
as crossing the line. Being big is not in itself illegal. What matters are a company’s behaviors, and it appears that Amazon had its finger on the scale in a lot of ways.
