E-commerce: are BigTechs too powerful? The Amazon case

E-commerce: are BigTechs too powerful? The Amazon case

Everyone knows that BigTechs are huge, global, powerful giants. However, their dominant position has recently triggered a controversy about the fairness of some commercial practices and their possible negative effect on competitors. And an accusatory finger has been pointed against Amazon. Here is why.

For years Amazon has worked as a marketplace where customers could find and buy everything. Until they have introduced their own product ranges thus boasting a two-faced soul:  a huge global ecommerce platform and a retail point for their own products.

It may sound fair like this. Nevertheless, Amazon’s dominant position is actually an issue. Since its control of the market is based on big data rather than on the quantity of products displayed in its windows. We are talking about the information it can collect about its users, differently from its competitors.

Amazon knows everything (or nearly everything) about us: what we like, our favorite products, what we are looking for.  

When we need to buy something we search for it through Amazon.

Jeff Bezos’ creature is a search engine which, over the years, has invested relevant amounts in search systems, to win the digital marketing war against Google and Facebook.

Trouble are brewing with the antitrust

The point is: what happens when the marketplace knowing our tastes better than anyone else starts selling its own products?  This is what the US Congress is wondering (Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In).

The risk is Amazon may promote its products rather than the others’, thus gaining a significant competitive advantage.

It is not an assumption: until recently, brands could purchase the main advertising slots. But during the COVID-19 pandemics, the marketplace started filling those positions with its own goods (Amazon’s New Competitive Advantage: Putting Its Own Products First).

Tens of different brands and just one owner: Amazon

We are talking about a huge quantity of products in addition to those belonging to AmazonBasics, marketed under different brands which make it difficult for customers to associate them with the e-commerce giant. And that is foul play. I think I am buying a given product from a given marketer and instead I am inside Amazon’s platform and I am actually buying a product by Amazon which Amazon itself has recommended. Amazon knows what I am looking for, but I am not fully aware of what I am buying.

Someone may argue that this also happens in big physical stores. However, such stores do not know how many times I have entered their premises, what I am looking for etc. because they do not possess the crucial data Amazon owns such as comments and reviews.

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And the UE is not sitting back

According to the Wall Street Journal, Amazon has been collecting data from its  marketers so as to be able to launch competitive products. Basically, the marketplace employees have been checking third parties sales information and have then targeted the development of Amazon’s products accordingly  (Amazon Scooped Up Data From Its Own Sellers to Launch Competing Products).

Such lack of fair play has been noticed also in the Old Continent: the EU Commission intends to accuse Amazon of overusing its dominance of the e-commerce world (Amazon Set to Face Antitrust Charges in European Union).

An accusing finger has been pointed against BigTechs

Such debate does not involve only the e-commerce giant but also Google and Facebook (Are big tech companies now too powerful to play fair?). The issue to be solved, indeed, is whether the fact of being a BigTech may mean being allowed to ignore the rules applying to all other businesses. And should the situation remain this tense, we are going to get to a redde rationem pretty soon.

What do you think about Amazon’s ploy? Are you concerned with this issue or not? Tweet @AgostinelliAldo

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