CEO’s of the country’s four largest tech companies – Amazon, Apple, Facebook and Google are scheduled to testify before the House Judiciary Antitrust Subcommittee tomorrow. Though this hearing is the result of a year-long investigation of competition in the digital marketplace, the opportunity to examine Big Tech practices and monopolies is increasingly pressing as the coronavirus pandemic has further revealed how these companies, especially Amazon, have consolidated power at the expense of small businesses.
Any exploitation of our national distress for profit is just the latest in dangerous developments for a company with a reputation of underpaying workers and harming small businesses. Is Amazon thriving at the expense of corner store commerce during the pandemic? This is a question for the Subcommittee, informed by the company’s practices. Amazon has so much revenue from its massive cloud computing arm, Amazon Web Services, that it can afford to lose money on its Prime two-day free shipping service, which has captured more than 100 million loyal U.S. subscribers. Small businesses simply cannot compete with the guaranteed fast delivery that Amazon Prime offers, especially during a pandemic when e-commerce is more of a safety necessity than a matter of convenience.
During the week of April 19, 2020 alone, Amazon experienced a 93 percent increase in consumer spending over the same week in 2019; meanwhile 100,000 small American businesses are estimated to have permanently closed since the pandemic started. This trend will further contribute to our country’s devastating levels of income inequality.
There is a direct correlation between the decimation of the American middle class and the rise of Big Tech monopolies. Amazon has not been built with the help of small businesses; it has been built at the expense of them. Small businesses that wish to sell their products on Amazon are at the complete mercy of the company, whose massive customer base is too appealing for small businesses to ignore Amazon’s demands. At past hearings, small business owners have explained how Amazon takes advantage of its unmatched marketplace power to force its vendors to change their prices to benefit Amazon—or else risk their access to Amazon’s millions and millions of customers. One of the witnesses at the hearing compared Amazon’s threats to allow counterfeit products to compete with his in retaliation for not lowering his prices as “bullying with a smile.”
It is imperative we hold Amazon accountable for their anti-trust violations. We cannot stand idly by and allow corporations to bully small businesses, stomping on the backbone of the American economy. Small businesses have capsized as mergers that benefit BigTech but harm competition have sailed through - unscrutinized. For decades, government has failed to intervene on behalf of the people and allowed corporate lobbyists to weaken our anti-trust laws.
In June, news outlets began reporting that Amazon will acquire self-driving technology company Zoox for $1.2 billion. Other retailers do not have the resources to invest in such an expensive technology at such a large scale, especially during an economic recession.
If Amazon has near instant delivery capabilities, it will be impossible for other retailers (brick-and-mortar or ecommerce) to compete for customers. The acquisition also suggests that Amazon is bent on global takeover—it will upend worldwide product distribution infrastructure by dominating delivery without needing drivers. Amazon’s Zoox acquisition is part of a disturbing larger pattern of Big Tech acquisitions during the pandemic—Facebook is trying to acquire gif-search engine GIPHY, and Google is trying to acquire health wearable tracker company Fitbit. At a moment in which our economy is already in crisis, Big Tech is seeking to further eliminate competition.
Document demands and hearing schedules are signs that the House Antitrust Subcommittee plans to examine Big Tech closely. Tomorrow’s hearing is an opportunity for Subcommittee members to not only obtain the information it needs in considering breaking up Amazon, but to also show America the lasting damage caused by anticompetitive behaviors of online monopolies. These Big Tech CEOs represent an unprecedented level of market domination that is exacerbating an already difficult period in our nation’s history. The House Antitrust Subcommittee’s hearing will put a much-needed spotlight on BigTech, and everything that has to change in rebuilding a stronger economy.
Senator Erica Smith is serving her third term representing North Carolina's Third District.