Yesterday was Amazon Prime Day, the e-commerce giant's fictitious summer shopping holiday that draws millions of its loyal subscribers to purchase products at a discount and even more people to sign up for the service.
The day is a big deal to shoppers but is worrying to critics — the company sells so many different products and attracts millions of loyal shoppers that it invented its own version of Black Friday, dictated that businesses have to offer discounts on that day and forced other companies, such as Walmart and eBay, to follow suit.
Amazon is in many different industries, including retail, cloud services, grocery, video and music streaming, AI and more, and since it is able to make money off services other than retail, it can force lower prices that customers find more appealing, even at the cost of businesses' profits.
However it's clear that investors are enjoying the benefits of the retail conglomerate's monopolistic powers, and Jeff Bezos, CEO of the company, is too. In fact, he is now the world's wealthiest person, worth more than $150 billion, according to Forbes, and as someone owning 16 percent of the company's stock, it's in his best interest for it to succeed.
Amazon stock prices on Prime Day
The west coast company is expected to account for a whopping 49 percent of US e-commerce sales in 2018, which is less than it sounds because it only accounts for 5 percent of all retail sales.
Experts are calling for closer watch over the company in the future, which has been, up until now, relatively unregulated.
Over 100 million people have a Prime membership and it's hard not to be drawn into getting one. With it comes unlimited, free two-day shipping, but also a TV and movie streaming service, photo storage, discounts on Whole Foods groceries and more, proving the company is trying to sneak into every aspect of consumer's lives. On this year's Prime Day, 100 million products were purchased, sending shares up more than $30.
There's a disturbing tale of Quidsi, an e-commerce company that ran Diapers.com and a few other online websites, which Amazon attempted to purchase in 2009. When the company declined, Amazon slashed profits on diapers and many other baby products and introduced Amazon Mom and, less than one year after, the company agreed to sell.
But Amazon isn't just in the business of selling other companies products — it also manufactures and sells its own brands, too. This gives the company an opportunity to see what products are selling well on its website before using that knowledge to sell them itself, usually at a discount. Though this doesn't seem bad for consumers, it could be; with less competitors, there's more room for Amazon to dictate the prices and with nowhere else to purchase them, there's no alternative.
There's also room for the company to force FedEx and UPS to charge it less for shipping (which it already does somewhat through bulk discounts), but as a major employer, it could also campaign to lower employee wages to decrease consumer costs and rapidly increase the amount of automation in its distribution centres.
Unfortunately there's no way for Amazon to be investigated for antitrust because though the company did force prices down, it hasn't increased them in a threatening or dominating way. There is no harm, legally, in the company weeding out competitors by lowering prices, because customers don't suffer.
This whole fiasco brings up the question of whether more attention should be paid to cases like this and Amazon will need to continually watch its back to make sure it's following the law.