How Amazon Crushes Small Business

Welcome to the permanent serf class.

Much has been written over the past year about how Amazon treats its warehouse workers and other employees and its attempts to prevent their unionization. But the mistreatment of Amazon’s labor force is far from the only negative effect of having once-thriving mom-and-pop shops gobbled up by or placed at the mercy of a faceless e-commerce leviathan. Amazon’s ascent means that more and more Americans are losing their commercial autonomy, the right to dictate and introduce innovations into the terms of their own transactions and business relations, and, ultimately, their ability to control their financial—and, therefore, personal—destinies.

At least some of Amazon’s most offensive practices and policies have been the focus of recent inquiries from congressional, FTC, and local officials. The subjects of these investigations have included Amazon’s disturbing practice of forcing its top third-party sellers to disclose their shipping and manufacturing contacts, appropriating those contacts for itself, and then competing with or simply imitating the third-party sellers’ best-selling items and steering search results to Amazon’s own listings. As Harvard Business School Professor Feng Zhu has described it, Amazon essentially “run[s] the platform as a lab, letting people innovate and compete against one another, and then cherry-pick[s] the best product for [it]sel[f] and capture[s] the value.” Other questionable Amazon practices under investigation have included the control it wields over product pricing, with a bot devoted to monitoring listing prices to make sure they fall within a particular price range, and downgrading the listings of sellers who offer their products for lower prices on other sites where they maintain similar listings. Perhaps more disturbing still is Amazon’s penchant for suspending sellers’ accounts on the pretext that the goods on offer are inauthentic, seizing the stock of goods, and then—remarkably—selling those products itself or through other companies, such as its wholly owned subsidiary Woot.

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