Commentary on Political Economy

Tuesday, 20 April 2021

 

America’s Amazon Problems

What’s good for the online giant might be very bad for free competition and national cohesion.

Ross Douthat
Credit... Johannes Eisele/Agence France-Presse — Getty Images

In 1986 an item in the New Republic decreed that “Worthwhile Canadian Initiative,” a headline that appeared on this very Op-Ed page, was “possibly the most boring headline ever written.” Seeking a different sort of reaction, I briefly considered titling this Op-Ed “Worthwhile Josh Hawley Initiative,” a headline that I suspect would elicit fury rather than boredom from many readers of this page.

As recently as a few months ago, Hawley’s populist forays and critiques of corporate power were eyed with suspicion but also a certain interest by people on the left. But after the Missouri senator’s cynical election challenge, his famous fist pump on Jan. 6 and his unrepentant attitude after Trump dead-enders stormed the halls of Congress, it’s fair to say that he’s not any liberal’s idea of a thoughtful Republican anymore.

Nevertheless, you can loathe Hawley and still find his latest policy proposal noteworthy. Titled the Bust Up Big Tech Act, it’s really more of a targeted broadside aimed at Amazon. It would prohibit companies that run online marketplaces and search engines with a certain size and reach from selling or advertising their own goods on those sites, and it would also prohibit such companies from providing online hosting services for other companies.

The provisions could apply to Google as well as Amazon, but they’re clearly aimed at key aspects of the Amazonian imperium. The first would strip away the company’s ability to sell its own goods on Amazon Marketplace, where it currently competes with third-party sellers. The second would force it to spin off Amazon Web Services, its lucrative business that sells cloud hosting to many other companies.

Hawley’s sketch isn’t about to become law. But his proposals offer a good entry point for a discussion about Amazon’s extraordinary power — a power that’s only increased in our pandemic year of closed stores and endless one-click ordering.

Right now, there are three broad reasons to be concerned about the world that Amazon’s power is creating. The first, the old-school antitrust concern, is that the power is bad for free and fair business competition, because Jeff Bezos’ empire can use its multiplatform power to strong-arm its rivals — by, say, forcing a company whose products interface with Amazon’s Alexa to share more customer data or risk losing access to the Amazon sales platform, to cite an allegation reported in The Wall Street Journal just last week.

Or alternatively, it can use that power to straightforwardly undercut its competition: For instance, by scooping up sales data from companies that sell on its website to help the behemoth offer competing products, something that Amazon employees have done notwithstanding an official company policy forbidding it. Running web services for rival companies may expand the possibilities for this kind of abuse, because it means that one arm of Amazon has access to all kinds of crucial internet-use data about businesses that other arms might be competing against.

The second concern, the anxiety felt most sharply by conservatives, is that it’s bad for cultural and political freedom to have one company so dominant over so many spaces and platforms. If Amazon decides not to carry certain books on its marketplaces because they offend progressive norms, its dominant position in bookselling will obviously affect their likelihood of finding a publisher in the first place. If Amazon decides to kick a company off Amazon Web Services, as it did with the social-media app Parler after the Jan. 6 riot, the nature of web hosting means that the affected company might not survive (though Parler is still alive). Even if the specific decisions are justifiable, the concentration of cultural power is a threat to free debate.

The final anxiety, meanwhile, is about what the Amazon business model does to the American worker and the American social fabric. This is the great concern of Alec MacGillis’s new book “Fulfillment: Winning and Losing in One-Click America,” a rich sociology of the world that Amazon has made. He spends a certain amount of time on the company’s anticompetitive power, the abuses occasioned by its size and scale and profit-seeking. But his central story is about the way that a business that cuts out economic middlemen and shared spaces of commerce and circulation, from brick-and-mortar Main Streets to shopping malls, inherently contributes to our grim geographic polarization — in which service-sector regions exist to sort and package consumer goods to ship to wealthy tech hubs, while midsize cities and middle-class communities decay or disappear.

MacGillis’s book is not a policy manifesto, and while he takes note of specific political decisions that have furthered Amazon’s imperialism, his overall story has a bleak and ineluctable momentum and a pessimistic end. And understandably so, since none of the obvious policy responses, whether from critics of “woke capital” like Hawley or the antitrust-and-labor left, seem commensurate to the transformation MacGillis describes. One-click America is being forged, in the last analysis, by human nature — by the near-universal appeal of convenience, the magic of having the thing you want when you want it, which people are likely to choose even if it means that regional department stores evanesce and local businesses decline.

A full response to this kind of Amazonification probably needs to come from policies and movements with broader aims than just restraining Bezosian power — whether that means industrial policy that tries to seed the Middle American landscape with middle-class jobs, a telecommuting-driven dispersion from the big cities that spreads social capital around or even a period of social and religious renewal that spurs the upper class to new forms of service and missionary work.

With that said, though, just because a policy is insufficient doesn’t make it useless. Would the heartland still be hollowed out, the new economy’s capitals still flush and gilded, if Amazon were several powerful companies rather than just one? No doubt. Would one-click America still be polarizing if more money flowed to sellers on Amazon Marketplace and workers in Amazon warehouses, and a little less to Bezos and shareholders? Certainly. But a weaker Amazon still seems as if it might be better, on the margins, for a lot of people, a lot of smaller companies and a lot of would-be innovators, and combining left-wing and right-wing fears about its power yields a pretty reasonable critique.

The question is whether that critique can build a coalition strong enough to overcome not just Amazon’s direct lobbying power but also the general popularity its conveniences have earned. And the answer is that it probably can’t, unless the anti-Amazon left figures out a way to work with figures like Hawley, and figures like Hawley with the left.

That’s a scenario that Jan. 6 made much less likely. But no less desirable, if the alternative is to imagine Jeff Bezos fist-pumping, forever.

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