Amazon Antitrust Challenge Inevitable?

Secyh62's picture
Rank: King Kong | 1,371

By definition, U.S. antitrust law exists to promote competition under the thought that competition benefits consumers. As much as lower prices do benefit consumers, at what point does it start to have a negative effect on the economy?

First off, right now no one can raise prices with Bezos committed to shit margins to crush competitors that can't match due to higher cost structures and their desire to....actually make money. As Amazon continues to expand into other segments of the economy, like groceries, and continues to put competitors out of business, are the deflationary effects of its business model more dangerous than the benefits of low prices? The basic premise of having some inflation is that it promotes people to spend which allows businesses to operate and the economy to grow. If consumers expect prices to fall, as in a deflationary environment, you wouldn't buy today when you could get it cheaper tomorrow and the economy grinds to a halt. Inflation also helps governments reduce their national debt burdens, which are setting new record highs every day and are a major constraint on growth. Amazon has essentially put a lid on inflation in the markets it touches and has killed growth for competitors. If Amazon puts everyone else out of business and doesn't rehire everyone that it displaces, wouldn't the negative effects on the broader economy outweigh the benefit of low prices? Low prices aren't that great when you don't have a job.

Going back to the purpose of antitrust laws, with Amazon's business model being to essentially eliminate competition via unmatchable low prices, do the effects that this has on the economy really benefit consumers? I'm aware that Amazon isn't single-handedly constraining inflation and growth, but personally I think that it does have a material effect on the two (and that effect grows as Amazon grows). With the Whole Foods acquisition, I think its only a matter of time before Amazon gets an antitrust challenge, especially if they pursue another high profile acquisition.

Curious to hear what you guys think, I'm sure there's people on these boards that have some direct experience with antitrust actions or evaluating the potential for antitrust action. Does Amazon fit the bill?