Open Markets Institute

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Amazon deserves more than rejection from New York. It should be punished

This week, Amazon abandoned a plan to open a second “headquarters” in New York City, after citizens rebelled against the idea of paying almost $3bn in subsidies and tax incentives to one of the world’s biggest corporations. But simply saying “no” to Amazon’s coercive terms is not enough. New York citizens should now demand that the state’s Attorney General Tish James begin investigating the corporation for abusing its power as a monopoly.

One reason the idea of subsidizing Amazon with New York city and state tax monies was so galling is that the corporation is already extracting so much wealth from the region. Amazon for more than a decade has steadily battered the American book publishing industry, which is largely based in New York, and which employs tens of thousands of residents. The corporation has done so through thuggish negotiating tactics, including simply refusing to sell a publisher’s inventory unless they agreed to a detailed list of concessions.

Similarly, Amazon a few years ago used age-old predatory pricing tactics to essentially bankrupt Diapers.com, a business located in Jersey City, by underpricing its rivals. In the end Diapers.com sold itself to Amazon, which shut the operation down.

It’s not just New Yorkers who are suffering from Amazon’s abuse of its monopoly control over many of America’s most high-profile markets. Amazon’s current business model is a threat to anyone who wants to make or sell things in America. Take the case of the small company, Fuse Chicken, one of the hundreds of thousands of enterprises that must sell their wares and services through Amazon, due to that corporation’s dominance of online commerce.

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