[kictanet] IS AMAZON UNSTOPPABLE?

[Ali Hussein]

Listers

Relevant in this day of Dominance and Market Failures.

Not since the heydays of General Motors in the early and mid years of the
20th Century has a company stood over the industry like a colossal. In many
ways Amazon is the New General Motors.

Regulators and Policy Makers are circling. Globally, led first by the
European Union and now the Americans. On can probably say that the American
Government has been generally ambivalent to these issues until early this
year when arguably first shot was fired by Makan Delrahim, the head of the
Ant-Trust Division of the U.S. Department of Justice., when he said of Tech
Companies:-

" They should think very seriously about their conduct, if you're one of
the big guys, you should be careful to make sure you don't snuff out
competitors because you think that's good for your business. That not what
free markets really mean, and we're going to come down on you like a ton of
bricks if that's what you do."

This long article by The New Yorker
<https://www-newyorker-com.cdn.ampproject.org/c/s/www.newyorker.com/magazine/2019/10/21/is-amazon-unstoppable/amp>
exemplifies
the conundrum of Capitalism today. At what point does success become
poisonous? What is good and what is bad? Where do we draw the line?

Regulators are coalescing around the Four 'Cs'.

1. *Concentration*: “The bigger a tech company becomes, the more they can
bully, so we need to put hard caps on how big companies like that can grow,
on what they can acquire.” said an FTC <https://www.ftc.gov/> official.
2.* Conflict*. According to Rohit Chopra
<https://www.ftc.gov/about-ftc/biographies/rohit-chopra>,  the second “C”
is the conflict of interest that comes from “both controlling the pipe and
selling the oil.” Chopra, who agreed to speak only about antitrust
generally and not about Amazon specifically, explained, “If you do both,
you will structure your marketplace in a way that ultimately is
self-dealing, and you will use the data from those who sell on your
marketplace to benefit yourself.” There’s a long history of the government
forcing industries to separate distribution and sales; for years, movie
studios have generally been prohibited from owning movie theatres.
Unfortunately too often Amazon has been accused of this sin. Too often.
3.* Contracts*. The next area of concern is contracts. Big tech companies
often make highly restrictive deals with smaller venders. Amazon retains a
contractual right to hold sellers’ revenues for long periods after a sale
and imposes limits on what data sellers can share with other companies.
Another F.T.C. commissioner, Rebecca Kelly Slaughter
<https://www.ftc.gov/about-ftc/biographies/rebecca-kelly-slaughter>, said,
“There are a lot of terms that go into boilerplate contracts that consumers
or workers don’t really have an opportunity to negotiate. It is absolutely
appropriate for us to be thinking about banning those.”
4. *Complexity*. Lastly, regulators worry about the complexity of current
antitrust law. “You really have to be an expert, or hire an expert
attorney, if you feel like one of these companies is acting
inappropriately,” an F.T.C. official said. “The law only works when it is
simple enough for the little guy to bring an action on their own.”

It is recommended reading to all business people, policymakers, activists
and regulators.


*Ali Hussein*


Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim
<http://ke.linkedin.com/in/alihkassim>




Any information of a personal nature expressed in this email are purely
mine and do not necessarily reflect the official positions of the
organizations that I work with.
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