Dive Brief:
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A leading retail trade group that represents Walmart and Target is pushing federal antitrust regulators to take a hard look at digital behemoths, including Amazon and Google, and the power they wield over online retail.
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The Retail Industry Leaders Association (RILA) filed a letter with the Federal Trade Commission that took aim at the power of companies that control digital infrastructure. The group specifically noted the control Amazon and Google have over product search, which they argue "can very easily affect whether and how price and product information actually reaches consumers."
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The letter comes weeks after antitrust officials signaled that they would investigate tech giants, including Amazon, for possible competition concerns.
Dive Insight:
Competition enforcement in the U.S. has long been kind to technology companies, where small, early leads can turn into vast market dominance in just a few years, as seen with Facebook in social media, Google in search and Amazon in e-commerce.
But critics from various points along the political spectrum have been calling, with growing volume and success, for more scrutiny. Amazon's own explosive growth and growing power in retail has been remarked on for several years, with both Republican (including President Donald Trump) and Democratic politicians calling for action.
The e-tailer's acquisition of Whole Foods in 2017 renewed choruses of concerns about Amazon's power and growth. After renewed antitrust scrutiny by federal officials, Amazon may slow the pace of its acquisitions, which historically have been made "quickly, quietly and frequently without investment bankers," according to a recent Wall Street Journal report.
Including its Marketplace, about half of e-commerce takes place through Amazon. Along with its third-party seller platform, Amazon provides logistical, cloud computing, advertising and other services to retailers and brands, while also competing with them through its own retail operations and private labels. It also controls vast amounts of consumer data, provided to it by its own sales as well as third-parties who sell on its Marketplace.
RILA's letter also took aim at Amazon's Marketplace, arguing that sellers on it may see no choice but to sell through it, while customers may not know who they are buying from as Amazon's "digital interface masks or obfuscates the true identity of the seller," which can allow for the sale of knock-offs and used goods sold as new, the group argues.
Broadly, RILA argues that the "ability for a super-dominant digital platform to operate a marketplace, determine demand, control placement to an extent unparalleled in the physical world, provide fulfillment, and then produce a similar product that it also has the data to target directly to specific consumers raises clear antitrust concerns because of the unique characteristics of a platform." The platform companies could use that power in self-serving ways or use it to impose excessive fees on users, the group said.
Tech
via https://www.AiUpNow.com
, Khareem Sudlow
