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The HQ2 brouhaha is over. Or is it? On Tuesday, Amazon announced that it would be splitting its new location between Crystal City, Virginia, and Long Island City, New York. These were among several locations that offered untold incentives to Amazon in hopes of attracting the new office space.
Under agreement between Amazon and Virginia, the commonwealth will give the company written notice about any FOIA requests “to allow the
Company to seek a protective order or other appropriate remedy” pic.twitter.com/BkVXdnoX2M
— Benjamin Freed (@brfreed) November 13, 2018
The fight over HQ2 shows how the company is becoming increasingly powerful. But is it a monopoly? That’s what Lina Khan is investigating. A profile in The Atlantic describes Khan’s work this way.
In her telling, monopolies don’t just exploit consumers and workers in their part of the economy. Even when they offer low prices to consumers, their influence propagates through the entire system. If one part of an industry consolidates, then all the other parts of the industry will feel pressure to consolidate too.
When a company comes to monopolize a market—when it grows so big that it can threaten other industries just by entering them—it ceases to be merely a company. It becomes an institution so powerful that it can rule over people like a government.
“That was the insight of [former Supreme Court Justice] Brandeis,” Khan told me. “For most people, their everyday interaction with power is not with their representative in Congress, but with their boss. And if in your day-to-day life you’re treated like a serf in your economic relationships, what does that mean for your civic capabilities—for your experience of democracy?”
And Tim Wu has been tracking just how Amazon and other tech giants got to be so gigantic:
Amazon has a track record of cloning products that succeed so it can help itself to the margins. To be sure, there is nothing wrong with firms learning from one another; that’s how innovation spreads. But there is a line where copying and exclusion become anticompetitive, where the goal becomes the maintenance of monopoly as opposed to real improvement. When Facebook spies on competitors or summons a firm to a meeting just to figure out how to copy it more accurately or discourages funding of competitors, a line is crossed.
Over the years, a strong current of self-justification began to creep into the consolidation. This could be a somewhat awkward undertaking for some of the firms who, as startups, had been committed to the old internet ideals of openness and chaos. But now it was all for the best: a law of nature, a chance for the monopolists to do good for the universe. The cheerer-in-chief for the monopoly form is Peter Thiel, author of Competition Is for Losers. Labeling the competitive economy a “relic of history” and a “trap,” he proclaimed that “only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.”
Although Amazon is touted as a model of business success, how does their market power affect our day-to-day experience? Does Amazon have a responsibility to the American public due to its size?
- Lina Khan Fellow, Columbia University; associate research scholar, Yale Law School; fellow, Information Society Project; author, "Amazon's Antitrust Paradox" @linamkhan
- Tim Wu Law professor, Columbia University; author, "The Curse of Bigness: Antitrust in the New Gilded Age"; @superwuster
- Carl M. Szabo Professor, Antonin Scalia School of Law, George Mason University; vice president and general counsel, Net Choice a tech industry trade association; @carlszabo
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