What Scorpion Venom Has To Do With Amazon’s Monopoly
An investigation into a bizarre package mixup led writer Meagan Day to find the key to Amazon's business strategy.
Video produced and hosted by Meagan Day
An Amazon customer ordered a hat. She received a vial of scorpion venom instead.
That customer, writer Meagan Day, wanted to find out why.
Her investigation exposed why Amazon is now charged with running an illegal monopoly in a landmark FTC suit.
What’s happening?
It turns out that Amazon’s chaos is connected to how the company squeezes and bullies sellers on its site — which is a major component of the FTC’s allegation that Amazon is acting as a monopoly and breaking the law.
Over 150 million Americans are Amazon Prime members. So people who want to sell things on the internet really don’t have much choice other than to use Amazon. There, they have to fight for visibility and customers among the confusing search results and endless ads. If they fail, they’re done for.
And what do legitimate third-party sellers do to prevent their listings from drowning in an ocean of weird junk? Anything Amazon wants, really.
Sellers pay enormous fees and follow onerous rules that help Amazon undermine competitors and consolidate power — because Amazon has made it so that if they don’t, their listings will get lost and they won’t survive. And many do fail; in fact, sellers who’ve been operating for five or more years account for only 10 percent of sales.
If Amazon is found guilty in the FTC lawsuit it could face a fine of nearly $44 billion and a court order requiring Amazon to change its business practices.
Most importantly, it could end in a breakup of Amazon into smaller companies.
