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Retail   Raising monopolistic concerns

Amazon controls retail infrastructure in U.S., says report

AmazonWithin five years, one-fifth of the $3.6 trillion retail market in the U.S. will have shifted online.

Amazon is on track to capture two-thirds of that share, according to a report by the Institute for Local Self-Reliance (ILSR). The organization’s assertion that “Amazon is a monopoly hiding in plain sight” is very concerning.

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The report estimated that Amazon currently captures $1 for every $2 that Americans spend online. Now, the e-retailer is moving towards a stake in the brick-and-mortar realm.

The report raises concerns that Amazon increasingly controls “the infrastructure that rival companies depend on to reach the market, making Amazon a novel and particularly potent threat to competition.”

By locking in a growing share of online shopping, ILSR contends that Amazon has left competing retailers and manufacturers with little choice but to become third-party sellers on its platform.

The report says that 55 percent of shoppers now start their searches at Amazon.com. This gives the e-retailer the power to “dictate the terms by which its competitors and suppliers operate, and to levy a kind of tax on their sales.”

In addition to raising monopolistic concerns, Amazon has taken at least $613 million in public subsidies for its fulfillment facilities since 2005, according to ILSR. “More than half of the 77 large facilities it built between 2005 and 2014 have been subsidized by taxpayers,” the report found.

ILSR’s researchers also contended that the jobs created by the e-retailer are reminiscent of labor’s darker days, “with many workers performing grueling and underpaid jobs, getting trapped in precarious temporary positions, or doing on-demand assignments that are paid by the piece.”




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