The Amazon Monopoly: Is Amazon’s Private Label Business the Tipping Point?

Faherty, Emily and Huang, Kevin and Land, Robert (2017): The Amazon Monopoly: Is Amazon’s Private Label Business the Tipping Point?

Abstract

The purpose of this paper is to consider if Amazon’s increase in private label brands is the tipping point for transforming the e-commerce giant into a monopoly. To lay the foundation, we initially explore the culture, leadership, and business practices which are unique to Amazon that enabled the company to become one of the U.S.’s largest and fastest growing e-commerce websites. Introduced in 2009, Amazon’s private label business has further propelled Amazon’s growth while creating a competitive advantage for the company by offering high quality products to their customers at low cost options. In considering whether private label brands affect Amazon’s status as a monopoly, we first examine exactly what a monopoly is and if Amazon can be classified as one in its current state. We then take a deep dive into Amazon’s private label strategy, analyzing past performance to make educated assumptions about the future. Our research provided evidence indicating that Amazon’s actions are threatening the cooperative nature of its Marketplace by creating substantial barriers to entry and increasing Amazon’s market share. With this knowledge we make predictions about Amazon’s future and whether it will ever be seen as a monopoly under the economic, legal, and/or social definitions. While Amazon’s case is unprecedented, this paper sources leading economists, journalists, and other academic research to support our theory.

• Item Type: MPRA Paper
• Language: English
• Keywords: amazon, monopoly, amazon marketplace, private label, store brand, jeff bezos, white label, consumer protection, sherman act, anti-trust, clayton act, hart-scott-rodino, federal trade commission
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D42 - Monopoly; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D47 - Market Design; D - Microeconomics > D5 - General Equilibrium and Disequilibrium; K - Law and Economics > K2 - Regulation and Business Law > K21 - Antitrust Law; K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation

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