Is Amazon a Monopoly?


Emyli Thompson, Opinion writer

Many of us know and love Amazon. The people love it while the brick-and-mortar stores fear it. Many even conclude that Amazon is a monopoly.But is it true? Should we be worried about this monster of an online retail company?


The definition of a monopoly, according to the Merriam-Webster dictionary, is “complete control of the entire supply of goods or of a service in a certain area or market”, meaning that it could demolish its competitors and even dictate the prices. According to economists, too much economic power under one company can curb innovation, weigh down wages, give fewer choices to a consumer, and make the economy less competitive. To avoid this downfall, the antitrust law exists. The antitrust laws(also known as competition laws)are statutes set by the U.S. government used to protect consumers against predatory business practices such as: market allocation, bid-rigging, price-fixing, and monopolies. Some of the behaviors that are monopolistic that the antitrust law target includes; exclusive supply agreements, tying the sale of two products, and predatory pricing with the refusal to deal.


According to the U.S. Department of Justice, Amazon falls short of being a monopoly. This may seem shocking but as of July 2019, Amazon’s share in the U.S.  e-commerce market is 37.7%. However, online stores only account for 10% of the entire U.S. retail market, which leaves about 90% of retail in brick-and-mortar stores. Despite this, Amazon predicts that this year they will have about 4% of the U.S.’s retail sales and 1% of the global market. While it is not considered a monopoly, it could be a monopsony. A monopsony is essentially a reverse monopoly in which there is a buyer that controls the market because it’s the main purchaser of services and goods from sellers. In regards to Amazon, this could relate to its leverage with prices charged by shipping companies like UPS and include areas where the main employer will try to push down employee wages.


While Amazon is not legally considered a monopoly, there is some urgency stressed by Amazon’s competitors in a letter to the Federal Trade Commission. The letter stated that they should examine “persistent oligopolies”. Amazon is even seen as a political threat according to the Democratic Massachusetts Senator Elizabeth Warren who is calling for the company to be pulled down and has even attacked the dominance Amazon has in the e-commerce marketplace. President Donald Trump also declares that Amazon has a huge “antitrust problem” and demands that Amazon must be disassembled due to its high market share. A couple of candidates for the 2020 election even vow to take down the behemoth. Even though it’s not a monopoly, it could very well turn the tables very soon, and in the end, it’s up to the government on whether the company will thrive or burn.