The FTC’s lawsuit points out that Amazon takes close to half of every dollar on every third-party sale, with one seller saying, “We have nowhere else to go, and Amazon knows it.” Farmers said much the same thing about railroads in the 19th century. Until 2019, Amazon bound suppliers contractually from selling their products at lower prices on other platforms. Now Amazon just puts such products at the bottom of its search results. Amazon’s search function, the lawsuit argues, is a mess, choked with advertisements and prioritizing its own often-inferior products. I’ve actually noticed this. Searching for a product on Amazon these days is like shouting at a very deaf store clerk “Please get me X” only to have the clerk show you three entirely irrelevant items because he can’t hear a word you say.
One difficulty with the Amazon lawsuit, as Camilla Hodgson pointed out last week in the Financial Times, is that although sellers, with good reason, hate Amazon, consumers love it. “You just could not be going after a more popular corporation,” David Balto, a former FTC policy director, told Hodgson. It’s true! Even granting that its search function is all crapped up, I still love Amazon, and I use it a lot. This is hard on my conscience, because Amazon is right up there with Starbucks, Apple, and Walmart as one of the worst union-busters in the country.
Interestingly, neither Khan’s Yale Law Review article nor the FTC lawsuit mentions unions or wages. To the extent either includes any discussion of monopsony (i.e., a circumstance where there is only one buyer) it’s to consider the impact on sellers, not on warehouse or contract labor. Perhaps that’s because labor disputes at Amazon warehouses tend to be not about wages (average pay exceeds $20 per hour) but about working conditions; among other things, Amazon warehouses have a miserable record on worker safety. Or perhaps it’s because antitrust law, even in the distant past, has never been terribly effective at addressing labor monopsony, or at helping labor unions in other ways. Indeed, monopoly and oligopoly can be very pro-worker under the right circumstances. Think U.S. Steel in the 1960s, or (to a diminished extent) the Big Three auto companies today, wherein unions secure workers their fair share of of the spoils from market concentration. Still, we regulate the economy we have, not the economy we used to have and wish to return. When only 6 percent of the private sector is unionized, increasing competition for labor through antitrust is not a bad strategy to empower workers.