Amazon: Combatting Antitrust Litigations
(6 pages of text)
Case (Pub Mat)
On July 29, 2020, Jeff Bezos, the founder and chief executive officer of Amazon.com Inc. (Amazon), testified before a United States House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law that was investigating the company for engaging in anti-competitive practices. Although the company offered low prices and did not distort consumer welfare principles despite its large market size, the Committee questioned whether it had exploited its sellers on both Amazon Marketplace and the Amazon Web Services Marketplace. The company was accused of not only exploiting sellers but also using their sales data for developing its private-label brands. As committee members were looking to redefine monopolistic practices, it was also recommended that Amazon should be split to avoid anti-competitive practices. Was it time for Bezos to proactively split Amazon and avoid antitrust actions against his company owing to its market dominance? What could he do to manage antitrust issues against his company?
This case is intended for undergraduate- or graduate-level courses in business strategy, business law, managerial economics, and strategic management courses. The case elaborates on antitrust challenges faced by firms, despite offering consistently low prices to customers, as their market size increases. The case highlights the changes that lawmakers consider in defining anti-competitive practices, especially consumer welfare, in the new era of technology firms. The case further discusses possible strategies firms can use to mitigate such anti-competitive challenges. After working through the case and assignment questions, students will be able to
- critically analyze the meaning of anti-competitive practices, especially the abuse of dominant power in a market;
- describe the challenges faced by lawmakers in determining anti-competitive practices and changes they can make to existing laws to redefine anti-competitive practices; and
- explore the strategies firms can use to mitigate the chances of anti-competitive practices.
United States, Large, 2020
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