‘Amazon Now Has Monopoly Power in Online Commerce’

Janine Jackson interviewed Stacy Mitchell about Amazon‘s bid to buy Whole Foods for the June 23, 2017, episode of CounterSpin. This is a lightly edited transcript. | MP3 Link

Janine Jackson: Looking for news on Amazon’s proposed acquisition of Whole Foods, you’ll find yourself awash in articles like “Is Whole Foods a Healthy Option for Amazon?,” “Big Prize in Amazon/Whole Foods Deal: Data” and “Speculation Grows That Amazon Will Face a Rival Bidder.” Other topics: What’s Instacart to do? What will happen to Grubhub?

The implication that news readers should be engaged primarily as stockholders or market watchers has little to do with people, of course, and much to do with a corporate media system of owners and advertisers happy to finance that angle on things.

The space reserved, or left over, for other angles of approach so far includes some critique of what the Amazon/Whole Foods deal could mean for the industry. But you’d look hard for any deep-going discussion of what it all means for human beings—who are, after all, more than consumers.

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Community-Scaled Economy Initiative. She wrote the book Big Box Swindle: The True Cost of Mega Retailers and the Fight for America’s Independent Businesses, and she co-authored the recent report, Amazon’s Stranglehold. She joins us now by phone from Maine. Welcome to CounterSpin, Stacy Mitchell.

Stacy Mitchell: Hello. It’s great to be with you.

JJ: The reasons this acquisition is concerning, as I understand it, are not just to do with bigness per se, though that should be enough, but there are concerns particular to Amazon, and what we know about its way of doing business, that make this deal troubling to you?

SM: Yes. You know, Amazon now has, I think what’s safe to say, monopoly power in online commerce. The company is capturing about one out of every two dollars that Americans spend online. That’s up from about a third of our spending just three years ago. And Amazon uses that power in ways that thwart competition, and bring more and more of a share of business to itself.

And my concern about the acquisition of Whole Foods is, one, that it gives Amazon a way to get into groceries. This is a company that is already the largest seller of clothing, books, toys, consumer electronics anywhere, online or off, and this gives it a beachhead in another major category of consumer goods.

But even more significant is the ways that Whole Foods would enable Amazon to actually solidify and expand its monopoly in online commerce. We are rapidly moving toward a situation where much of our retail and buying is going to be digitally driven, and we are facing the prospect of a single company dominating that trade.

JJ: I have heard things, just following up directly on that—it doesn’t seem too fantastical to think about, well, if you are an Amazon Prime member and then you are in Whole Foods, are you going to be accessing different prices for items? There are certain specific things that they could do that I think might actually be surprising to people.

SM: Yeah. I mean, data is one of the big market advantages that Amazon has. It has an enormous amount of data on all of us: what we browse for, what we buy, what we don’t buy, how long our mouse hovers over something, what we are doing online when we’re not even shopping on Amazon, what we’re watching on Amazon Prime. Amazon uses that data in very strategic and one might say predatory ways to manipulate its competitors, but also to manipulate us.

And one of the things that Whole Foods would give Amazon is a new stream of data about all of us. Amazon’s very eager to begin to track us, not only online but in the physical world. And just this week, there were new reports about patents that Amazon has filed for technologies that would enable it to track us in its stores, and actually block our phones from accessing competitors’ websites, and otherwise manipulating the prices and information that we’re able to get in those stores. So that’s one of the ways that buying Whole Foods would give Amazon even more power in its online market.

JJ: Yeah, when I cite that article saying that data is a big prize in the deal, it’s not because it’s not true; it’s simply that it’s being reported from a perspective of, you know, here’s a chit that one company or another may win. So I want to ask you about the quality of reporting.

One of the things that we unfortunately see sometimes is workers being pitted versus consumers in these sorts of stories. You know, if you want cheaper clothing, well, then maybe you’re the reason for sweatshops. And here I’m starting to see a thread that says, “Oh, this deal may mean cheaper groceries, and who’s going to be opposed to cheaper groceries? But, oh, there’s a dark side.” What’s wrong with that framing of workers versus consumers, and how might reporters cover this in a useful way?

SM: In some ways, this is partly a responsibility of the media. And you’re very right, in the sense that when these deals are announced, we see a lot of speculation and, you know, what’s this going to mean in terms of stockholders and how the companies are going to operate together. There’s a lot of analysts out there that are interested in that, and a lot of the coverage focuses on that, as opposed to the public interest issues that are raised by this.

But although I think part of the reason that we are so focused on the consumer end is because of the shifts that happened in anti-monopoly policy in the 1980s, beginning under Ronald Reagan. It used to be that our anti-monopoly policies for decades were more effective, and in part because they had a broader framework. They thought that the idea behind our antitrust laws was, we need to have a level playing field, we need to ensure that we protect people’s liberty as workers, as producers, as small business people; the idea that your livelihood is at stake here. It’s not just about getting low prices, but how is Amazon—by squeezing out competing businesses, by squeezing its suppliers, by reducing the incomes of producers, ultimately Amazon is creating a market where there’s a lot less opportunity for all of us to make a decent living.

And, in fact, there is a new body of economic research, just in the last few years, that has found that the consolidation that we’re seeing across the economy—airlines, retail, media, all these different sectors—is in fact deeply linked to rising levels of inequality. The reason that so many of us can’t make a decent living has to do with this corporate consolidation. There’s growing profits going to a small number of folks at the top. We’re seeing less innovation. New business formation has collapsed; we’re now creating half as many new businesses now as we were in the late 1970s.

So these effects are substantial, and they affect our own personal bottom line. So we shouldn’t get too distracted by Amazon and the media wanting to frame this in terms of consumers. We should remember that our well-being depends on all these other roles that we play in the economy.

JJ: Well, that argument and that information that you’ve just put forward is just what you were not permitted to squeeze into this New York Times article. I need to spend just a minute with this June 19 New York Times piece about Amazon that really is kind of glowing. I mean, right in the beginning, it talks about how

unlike almost any other chief executive, Amazon’s founder Jeff Bezos has built his company by embracing risk, ignoring obvious moves, and imagining what customers want next even before they know it.

And it goes on and on about how failure is key to the strategy, and they don’t make a profit on the quarter—I mean, it really is filled with language like, “Amazon is making shopping great” again.

And then at the very end we see the Institute for Local Self-Reliance, identified as “a frequent foe of Amazon,” as though that were your only identity, and you get the few little snips and quotes that don’t really reflect the fullness of what you’ve just said to me right there. And I think it’s very frustrating, as someone who’s trying to learn from the news, to see eleventy paragraphs of PR and then a paragraph of “but some people have criticisms” tacked on at the very end.

SM: I think that’s very true. And what’s been difficult and frustrating for us—you know, we produced this report, this very in-depth report, last fall, did a lot of original reporting, and data analysis is part of that, and we still see that so many of the stories that are out there are entirely framed by Amazon’s press releases. I mean, we get Amazon‘s press releases, and then we watch the news stories that follow, and occasionally, if you’re lucky, you’ll get a reporter call you, and there at the end of the story, there’ll be one critical question mark about Amazon, but it’s at the bottom. And rarely are we seeing reporters step back and say, “Let me think about how to look at this more broadly. Let me figure out a framework for a story that’s not driven by Amazon’s self-created narrative. Let me ask a question about what the implications are.” We just don’t see that happening as much as we need to see.

JJ: Yeah, and the cherry on the sundae is the “Amazon declined to comment for this article.” So right where power should be interrogated, or where they should answer for specific criticisms, there’s this void, you know, but then moving right along. And, of course, we should not neglect to mention that Jeff Bezos also owns the Washington Post, and is therefore involved in media itself.

But I wanted to end on the note that the fact that the Institute for Local Self-Reliance is not simply a “foe of Amazon,” but talks a great deal about alternative models, about different ways of doing things. And I just want to give you an opportunity to say, finally—there is pushback, there are people who are beyond recognizing the problems of the big-boxification of commerce, and are trying alternative methods and are pushing back. What can you tell us, or how can folks find out more about that?

SM: Yeah, there’s a growing movement across the country to really bring back anti-monopoly policy. And people are using the word “monopoly” in a way that we didn’t hear even just a few years ago. And I think that’s really encouraging, because it signals a much more publicly engaged approach to the issue of antitrust. And we’re seeing politicians talk about it more; we’re seeing it more in the news. There are growing numbers of economists who are raising concerns about concentration and talking about monopoly. So I think that’s a good sign, in the sense that we maybe are opening a conversation about taking policy action around this issue.

The other piece of good news is that there is a very vibrant local economy movement out there, people who are starting and helping to support craft breweries and small-scale food producers and independent bookstores and local retailers, and many of those businesses are banding together, both locally and nationally, to make a case. And we’re seeing cities, too, at the local level, because there’s a way in which some of the consequences that we’ve been talking about, in terms of inequality and bad jobs and lack of opportunity, that come from consolidation, there’s a way in which cities and mayors and elected officials feel those consequences first, more than, say, Congress or the president.

And so we’re seeing more and more cities taking action to make sure that they’re creating the kind of habitat, the kind of environment where local businesses can thrive, and where they’re not allowing big chains to come in and take over the local economy, where they’re looking closely at how their economic development policy is working. In some cases, they’re building municipally- owned broadband as a way to fight back against Time Warner and the other companies that control internet access, and so on. So this is very encouraging to see, and a lot of the work that we do at the Institute for Local Self-Reliance is helping those communities find those solutions.

JJ: We’ve been speaking with Stacy Mitchell. She’s co-director of the Institute for Local Self-Reliance, author of the book Big Box Swindle and producer of the monthly newsletter the Hometown Advantage Bulletin. You can find the Institute’s work online at ILSR.org. Stacy Mitchell, thank you so much for joining us this week on CounterSpin.

SM: Thank you for having me.

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