Amazon – friend or foe?

Franklin Foer lays out the case for the prosecution in the New Republic:

In confronting what to do about Amazon, first we have to realize our own complicity. We’ve all been seduced by the deep discounts, the monthly automatic diaper delivery, the free Prime movies, the gift wrapping, the free two-day shipping, the ability to buy shoes or books or pinto beans or a toilet all from the same place. But it has gone beyond seduction, really. We expect these kinds of conveniences now, as if they were birthrights. They’ve become baked into our ideas about how consumers should be treated.

These expectations help fuel our collective denial about Amazon. We seem to believe that the Web is far too fluid to fall capture to monopoly. If a site starts to develop the lameness of an AltaVista or Myspace, consumers will unhesitatingly abandon it. But while that meritocratic theory might be true enough for a search engine or social media site, Amazon is different. It has a record of shredding young businesses, like Zappos and Diapers.com, just as they begin to pose a competitive challenge. It uses its riches to undercut opponents on price… then once it has exhausted the resources of its foes, it buys them and walks away even stronger.

But Matthew Yglesias disagrees:

At [the article’s] core is a very simple but fundamentally mistaken contention about Amazon, namely that “the company has achieved a level of dominance that merits the application of a very old label: monopoly.” The simple fact of the matter, however, is that Amazon doesn’t have any kind of monopoly.

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