The Vertical Market Power of Online Platforms Case Study: The Vertical Market Power of Amazon

Research Article
Open access

The Vertical Market Power of Online Platforms Case Study: The Vertical Market Power of Amazon

Mingyu Lyu 1*
  • 1 University of Warwick    
  • *corresponding author Mingyu.Lv@warwick.ac.uk
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/32/20231574
AEMPS Vol.32
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-085-1
ISBN (Online): 978-1-83558-086-8

Abstract

This article focuses on the vertical market power of online platforms and the case study of Amazon. Firstly, this article analyses the problems of unfair competition, deep bundling of services, and consumer privacy that result from Amazon's platform being too powerful in terms of vertical market power. These problems lead to a loss of interest for third-party sellers and consumers and a significant increase in Amazon's revenue, likely creating a monopoly in this productive online platform segment. The second focuses on both quantitative and qualitative aspects of Amazon's vertical market power, broadly determining whether Amazon is a monopoly. It also concludes by examining how to address the problems caused by these vertical market forces. The government and competition regulators are the main focus, with strict controls on Amazon's behaviour in terms of pricing and acquisitions. Treat Amazon as a paradigm for the entire online platform.

Keywords:

vertical market power, Amazon, online platforms

Lyu,M. (2023). The Vertical Market Power of Online Platforms Case Study: The Vertical Market Power of Amazon. Advances in Economics, Management and Political Sciences,32,98-105.
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References

[1]. Marketplace Pulse: Amazon’s Fastest Growing Markets (2023). https://www.marketplacepulse.com/articles/amazons-fastest-growing-markets.

[2]. Amazon 2022 Proxy statement. https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2022-Proxy-Statement.pdf.

[3]. Ducci, F.: E-Commerce Marketplaces. In Natural Monopolies in Digital Platform Markets (Global Competition Law and Economics Policy, pp. 76-96). Cambridge: Cambridge University Press. doi:10.1017/9781108867528.004 (2020).

[4]. Marketplace Pulse: Marketplace Pulse Year in Review 2022 (2022). https://www.marketplacepulse.com/year-in-review-2022.

[5]. Amazon 2021 Annual Report https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2021-Annual-Report.pdf.

[6]. Marketplace Pulse: Amazon Takes a 50% Cut of Seller’s Revenue (2023). https://www.marketplacepulse.com/articles/amazon-takes-a-50-cut-of-sellers-revenue.

[7]. Birkinbine, B., Bilić, P.: The Amazon–MGM Deal. The Political Economy of Communication, 9(2) (2022).

[8]. Flood, Z. C.: Antitrust Enforcement in the Developing E-Book Market: Apple, Amazon, and the Future of the Publishing Industry. Berkeley Technology Law Journal, 31(2), 879–904 (2016). https://www.jstor.org/stable/26377775.

[9]. Melnik MI., Alm J.: Does a seller’s ecommerce reputation matter? Evidence from ebay auctions. J Ind Econ 50:337–349 (2002).

[10]. eBay 2021 Anuual Report https://ebay.q4cdn.com/610426115/files/doc_financials/2021/ar/2021-Annual-Report-(1).pdf.

[11]. Yltaevae L.: Reasons U.S consumers shop at Amazon 2022 (2023). https://www.statista.com/statistics/1311765/reasons-to-shop-on-amazon-united-states/?locale=en.

[12]. He, L., Reimers, I., & Shiller, B.: Does Amazon Exercise Its Market Power? Evidence from Toys“R”Us. The Journal of Law and Economics (2022). https://doi.org/10.1086/720824

[13]. Haucap, J., Heimeshoff, U.: Google, Facebook, Amazon, eBay: Is the Internet driving competition or market monopolization?. Int Econ Econ Policy 11, 49–61 (2014). https://doi.org/10.1007/s10368-013-0247-6

[14]. European Commission, Antitrust: Commission Accepts Commitments from Amazon

[15]. Bundeskartellamt: Amazon Removes Price Parity Obligation for Retailers on Its Marketplace Platform, Case Report B6-46/12 (2013).

[16]. Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon (New York: Little, Brown, 2013).

Cite this article

Lyu,M. (2023). The Vertical Market Power of Online Platforms Case Study: The Vertical Market Power of Amazon. Advances in Economics, Management and Political Sciences,32,98-105.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN：978-1-83558-085-1(Print) / 978-1-83558-086-8(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.32
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Marketplace Pulse: Amazon’s Fastest Growing Markets (2023). https://www.marketplacepulse.com/articles/amazons-fastest-growing-markets.

[2]. Amazon 2022 Proxy statement. https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2022-Proxy-Statement.pdf.

[3]. Ducci, F.: E-Commerce Marketplaces. In Natural Monopolies in Digital Platform Markets (Global Competition Law and Economics Policy, pp. 76-96). Cambridge: Cambridge University Press. doi:10.1017/9781108867528.004 (2020).

[4]. Marketplace Pulse: Marketplace Pulse Year in Review 2022 (2022). https://www.marketplacepulse.com/year-in-review-2022.

[5]. Amazon 2021 Annual Report https://s2.q4cdn.com/299287126/files/doc_financials/2022/ar/Amazon-2021-Annual-Report.pdf.

[6]. Marketplace Pulse: Amazon Takes a 50% Cut of Seller’s Revenue (2023). https://www.marketplacepulse.com/articles/amazon-takes-a-50-cut-of-sellers-revenue.

[7]. Birkinbine, B., Bilić, P.: The Amazon–MGM Deal. The Political Economy of Communication, 9(2) (2022).

[8]. Flood, Z. C.: Antitrust Enforcement in the Developing E-Book Market: Apple, Amazon, and the Future of the Publishing Industry. Berkeley Technology Law Journal, 31(2), 879–904 (2016). https://www.jstor.org/stable/26377775.

[9]. Melnik MI., Alm J.: Does a seller’s ecommerce reputation matter? Evidence from ebay auctions. J Ind Econ 50:337–349 (2002).

[10]. eBay 2021 Anuual Report https://ebay.q4cdn.com/610426115/files/doc_financials/2021/ar/2021-Annual-Report-(1).pdf.

[11]. Yltaevae L.: Reasons U.S consumers shop at Amazon 2022 (2023). https://www.statista.com/statistics/1311765/reasons-to-shop-on-amazon-united-states/?locale=en.

[12]. He, L., Reimers, I., & Shiller, B.: Does Amazon Exercise Its Market Power? Evidence from Toys“R”Us. The Journal of Law and Economics (2022). https://doi.org/10.1086/720824

[13]. Haucap, J., Heimeshoff, U.: Google, Facebook, Amazon, eBay: Is the Internet driving competition or market monopolization?. Int Econ Econ Policy 11, 49–61 (2014). https://doi.org/10.1007/s10368-013-0247-6

[14]. European Commission, Antitrust: Commission Accepts Commitments from Amazon

[15]. Bundeskartellamt: Amazon Removes Price Parity Obligation for Retailers on Its Marketplace Platform, Case Report B6-46/12 (2013).

[16]. Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon (New York: Little, Brown, 2013).

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