Here’s how monopoly works these days.

If you want to be a supplier to Amazon, then you have to guarantee Amazon a minimum profit margin.

If Amazon decides to sell your product for a lower price, you have to pay the difference. So Amazon gets its profit no matter what. 1/
This what D.C. Attorney @AGKarlRacine lays out in his amended antitrust case against Amazon, filed today.

@viaCristiano has the scoop. 2/
washingtonpost.com/politics/2021/…
@AGKarlRacine @viaCristiano The best way to keep Amazon from lowering the price of your product (which would force you to write Amazon a big check) is to inflate the prices you charge other online retailers and on your own website. If everyone’s prices are high, Amazon won’t cut theirs. 3/
@AGKarlRacine @viaCristiano The result is that Amazon thwarts competition from other sites and keeps its grip on the online market. 4/
Amazon uses this same basic move to control the pricing offered by independent sellers — both on Amazon and on other sites. If sellers lower their prices on other platforms — which have lower seller fees — Amazon’s algorithm demotes them, tanking their sales. 5/
It’s an incredibly lucrative scheme. Amazon is generating huge margins on its retail platform, which it’s using to rapidly expand into logistics, healthcare, entrainment, and more. 6/
With these new elements, the suit begins to get at the multidimensional ways that Amazon controls online commerce, both on and off its vast platform.

And it makes the case for a structural remedy — breaking up Amazon into multiple companies — even stronger. 7/7
P.S. - More of our Amazon analysis here: ilsr.org/amazon/

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More from @stacyfmitchell

24 Aug
1. It turns out that big-box stores are an even worse deal for cities and towns – worse than anyone, even their opponents, once thought.
2. In the 1990s and 2000s, grassroots groups in hundreds of communities fought Walmart and other big-box stores. Some won. Most lost. They lost mainly because city officials wanted the tax revenue these stores promised to generate.
3. The tax bonanza was always a mirage, but you had to actually do the full math to see this. Most city officials refused -- they wouldn’t look past the top-line of what the Walmart store would generate in property tax revenue.
Read 14 tweets
20 Aug
1. For years, Americans failed to recognize Amazon as a monopolist, because we bought Jeff Bezos’s big lie – that bookstores, small publishers & print books were being driven out of business not by monopoly power, but by “progress.” They were going the way of the horse & buggy.
2. Now Amazon is building a vast brick-and-mortar retail empire. It’s slated to include thousands of supermarkets, dozens of bookstores, and, according to new reporting in the @WSJ, department stores too.
wsj.com/articles/amazo…
@WSJ 3. Jokes on us, eh? Bezos knew all along that the future of retail — and with it, the vast consumer goods industry — was always going to have a significant brick-and-mortar component. Physical retail has huge advantages.
Read 10 tweets
6 Feb
Americans think large corporations are invariably more efficient. They aren’t.

I wrote about how local pharmacies, banks, and other local enterprises possess "economies of small scale” that enable them to outperform their big rivals at @washingtonpost

washingtonpost.com/outlook/small-… 1/
The reason that local businesses are disappearing is that policymakers, enthralled to bigness, have allowed a few corporations to amass outsize power & wield it with impunity. Rather than compete head-to-head with their smaller rivals, these giants can simply crush them. 2/
Independent pharmacies, for example, outperform the big chains by a wide margin. It’s not despite being small. It’s because they are small. It’s their local ownership that makes the difference. 3/
Read 5 tweets
4 Feb
Monopoly power is the leading threat to independent businesses. @SenAmyKlobuchar and cosponsors @SenBooker @SenBlumenthal @SenMarkey @SenBrianSchatz introduced legislation today showing their commitment to antitrust reform. bit.ly/3aDrXb4 1/
@SenAmyKlobuchar @SenBooker @SenBlumenthal @SenMarkey @SenBrianSchatz I’m encouraged this bill signals @SenAmyKlobuchar eagerness to lead the way, as the chair of the antitrust subcommittee, in reining in the power of monopolistic firms over small businesses — the lifeblood of a dynamic and equitable economy. 2/
@SenAmyKlobuchar @SenBooker @SenBlumenthal @SenMarkey @SenBrianSchatz While I’m encouraged — the presumptive ban on mergers by very big firms is great --there’s much more that Congress should do to ensure independent businesses aren’t threatened by highly concentrated markets and rampant market power abuse by dominant corporations. 3/
Read 6 tweets
20 Jan
There’s a lot of gobsmacked reporting about how West Virginia is leading the nation on vaccination by relying on local pharmacies rather than CVS. Local drugstores! West Virginia! Who can believe it!

It’s a telling example of how steeped we are in the ideology of bigness. 1/
We’re so certain that big business is superior to small, and that big cities are smarter than rural places. We’re blinded by these ideas. Only the most glaring evidence of the opposite can shake us out of the conviction. 2/
Last year, I watched economists struggle to figure out why so many more PPP loans were made in some places than in others. The answer wasn’t hard to see. It just confounded their assumptions: small banks are better at getting capital to the real economy than big banks are. /3
Read 8 tweets
4 Jan
Happy 2021! Since we’re all thinking about 1) vaccine delivery and 2) control of the Senate, it’s a good time to reflect on independent pharmacies….
Local pharmacies are critical to healthcare delivery in rural areas, including Covid vaccines. Yet they are endangered & disappearing — because of monopolistic aggression by CVS and other PBMs.

Fighting for local pharmacies would help Dems compete for more Senate seats. 2/
Take Iowa. The state is reporting a "critical shortage" of rural pharmacies needed for Covid vaccination. Over the last 20yrs, the number of independent pharmacies has fallen by more than half. A growing number of Iowa counties are "pharmacy deserts.” 3/

desmoinesregister.com/story/news/hea…
Read 6 tweets

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