Why Amazon Is Not A Monopoly (Yet)
This Amazon and Hachette negotiation has people all wound up in a tizzy.
Some, who seem to “side” with Hachette in these negotiations (NOTE: there are NO sides, this isn’t a “war” except in the media), trot out the following line (or some variation of it):
Amazon is a monopoly, so watch out, they are going to take over the book industry.
The quick version is … no, they aren’t a monopoly, and I don’t think they are going to be one any time soon.
There are plenty of alternatives to Amazon in terms of books (Powells, Barnes and Noble, independent bookstores etc…), but Amazon doesn’t just sell books.
Amazon is a retailer that uses digital technologies better than most companies, and applies them to its business with a model similar to (not exactly like) Wal-Mart.
So if you think Amazon is a monopoly, are you going to call Wal-Mart a monopoly too?
Amazon isn’t a monopoly because they haven’t even come close to “eliminating” all competition so they can completely control (raise, not lower) pricing.
The legal definition of monopoly from here: http://legal-dictionary.thefre…
An economic advantage held by one or more persons or companies deriving from the exclusive power to carry on a particular business or trade or to manufacture and sell a particular item, thereby suppressing competition and allowing such persons or companies to raise the price of a product or service substantially above the price that would be established by a free market.
Amazon doesn’t have any “economic advantage” as it pertains to this legal definition yet, not even close. I don’t see them ever getting this advantage, because, well, Wal-Mart is also a competitor for them as well on retail items.
So can we stop this “Amazon is a monopoly and a great big bully, WAH!” nonsense?