On any given day, you could receive a package from Amazon, visit an Amazon-hosted website, inquire about the weather with an Amazon device, and shop for groceries at an Amazon-owned Whole Foods. Amazon is so much more than a “everything store.” It’s evolved into a “everything company,” with a presence in nearly every aspect of our lives and the economy.
Amazon, like its Big Tech peers, has become a target for regulators and lawmakers as its reach — and, in some cases, dominance — has grown. However, regulators who want to rein in or break up the company without harming the consumers and businesses that rely on it face a challenge because of its enormous size and impact.
Last month, a bipartisan group of US House members introduced a package of bills aimed at limiting the power of dominant tech companies such as Facebook (FB), Amazon (AMZN), Apple (AAPL), and Google (GOOG) (GOOGL GOOGLE). Each of these companies has been accused of anticompetitive behavior by regulators in the United States and Europe, and the proposed US legislation could help pave the way for one or more of them to be broken up, among other options.
Amazon has provided the clearest picture yet of how its business might change if the proposed bills become law, out of the big four. And its massive third-party marketplace could be the first part of its empire to fall apart.
The company recently hinted that it might be forced to shut down its marketplace for third-party sellers and revert to the days when it sold everything on its own website. Such a move could have far-reaching consequences for the millions of sellers who rely on it to run their businesses, as well as disrupt the shopping experience for customers who have grown accustomed to getting almost everything they want in one place.
Long-time Amazon watchers are split on whether the company will actually carry out this plan if the legislation passes — which is unlikely to happen anytime soon — because it could hurt the company’s bottom line. However, the possibility highlights the difficulties lawmakers face in limiting Amazon’s and other tech giants’ power.
“Breaking up companies is very, very hard,” said Joel Mitnick, a partner in the antitrust group at law firm Cadwalader. “Breaking up companies that consumers love is even harder.”
Amazon used to be just a bookstore. Amazon’s businesses now include Amazon Web Services, Whole Foods, advertising, gaming, entertainment, and streaming, logistics, warehousing, and delivery, smart devices, payment services, and, of course, e-commerce.
In recent years, a number of these divisions have been criticized. During her 2020 presidential campaign, Senator Elizabeth Warren suggested appointing regulators to “unwind anti-competitive mergers,” such as Amazon’s $13.7 billion purchase of Whole Foods in 2017.
