Hitting the Books: Amazon’s Unique ‘Threat’ to Digital Commerce

When it comes to online merchandising, no one is bigger than Amazon. The same can be said about Walmart’s absolute dominance of the physical retail sector. But for a brief period in 2016, the two giants tried to get in each other’s way. The resulting multi-year upheaval would shake the world of commerce to its foundations, with every above-mentioned strategy and covert trick made available to crush competition. In winner sells everything, journalist Jason Del Rey describes the business battles between and within these giants of the industry as both corporations sought to further strengthen their market position. In the excerpt below, we take a look at some of the secret tricks.

derive from The Winner Sells Everything: Amazon, Walmart, and the Battle for Our Wallets by Jason Del Rey. Published by Harper’s Business. Copyright © 2023 by Jason Del Rey. All rights reserved.

In late 2010, the power and valuations of Amazon and other giants of the technology industry sparked a new movement in antitrust circles, catalysed by a law school paper written by a then-unknown law student named Leena Khan. In his seminal paper, “Amazon’s Antitrust Paradox”, published in the Yale Law Journal, Khan argued that our interpretation of antitrust laws had become outdated in light of the new digital economy, and there was a need to return to the days when there was only little competition. Offering prices or free services was not enough to avoid scrutiny of antitrust practices.

“Amazon doesn’t just want to dominate the markets; It wants to own the infrastructure that underpins those markets,” said Stacey Mitchell, a longtime critic of both Amazon and Walmart who runs a left-wing think tank called the Institute for Local Self-Reliance (ILSR). “And that’s a difference of magnitude compared to Walmart’s monopolistic ambition.” Mitchell spent years agitating the government to take steps to slow down Walmart during the years of its Supercenter development, and he remains clear today that he finds the company’s power problematic.

But in his view, and that of many Big Tech critics in his circle, Amazon poses an entirely different threat to business competition. “It’s not just the retail platform, but it’s AWS (Amazon Web Services), it’s the logistics part, it’s (Alexa) and how we interact with the web, and everything connected to all devices and smart is the interface. Home,” she said. “It enables Amazon to favor its own goods and services in those markets, impose a sort of tax on all the businesses that depend on that infrastructure, and to survey all that activity and gather that intelligence.” enables you to use it to your advantage.”

As Washington D.C. As the pressure mounted, the Amazon leaders were heating up. At a key annual meeting of Bezos’ senior leaders in early 2020, Jesse, the then-CEO of AWS, digested the contents of a memo sitting in front of him. It laid out Amazon’s plans to send a message in response to allegations that it was too big or too powerful and engaged in anti-competitive behavior. As Bezos listened on the phone, Jesse pointedly asked those in front of him why the messaging had not argued that Walmart and AWS rival Microsoft should be investigated. Other top company executives tried to explain that each of those companies had already been investigated years earlier and that their time had passed. But Jassi’s response left a lasting impression on those present.

“It was quite clear from his comments that we should not take our foot off the gas,” an attendee told me years later. In later years, particularly in the part of the company that focused on so-called competition issues, “there wasn’t a day that went by when Walmart didn’t come up.” The fact that Walmart, which has higher annual revenue than Amazon, wasn’t being scrutinized by policymakers drove executives like Jesse mad. It didn’t help when Amazon executives learned that Walmart was indirectly funding a nonprofit group called Free and Fair Markets, which was bombarding journalists and social media with anti-Amazon allegations. For some time, Amazon leaders suspected that a competitor, or group of competitors, was funding the operation, but could not prove it. Drew Hardener, one of Amazon’s longtime spokesmen, has been dismayed every time the group has put out an op-ed or social media message that gained popularity.

“How come the press doesn’t know this is a pioneer group?” He will wail. As a result, an Amazon communications employee named Doug Stone spent more than a year helping journalists uncover the group’s fundraisers. Finally, in late 2019, the Wall Street Journal pulled back the veil in an exposé titled “A ‘Grass Roots’ Campaign to Take Down Amazon Was Funded by Amazon’s Biggest Rivals”. A Walmart spokesperson denied funding the group to the newspaper – the article said Walmart used an intermediary to fund FFM, so the company’s defense may have been a matter of semantics – but Said Walmart shares concerns about “stock issues” that the group was promoting.

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