In the US, the next company to be targeted by the government may be Amazon. Amazon is the largest e-commerce company in the world. It is also the largest online retail vendor in the US. Amazon is accused of using its dominance on the market to force traders to deal exclusively with it. That is, he has imposed the condition on retail vendors that if they want to sell their things on Amazon platform, then they have to avoid other platforms. Action has been initiated against the Alibaba company in China on a similar charge.
A committee of the US House of Representatives in the lower house of Congress has said in a report that Amazon’s way of exploiting vendors has raised serious competition concerns. The Judiciary Committee of the House of Representatives has claimed that Amazon has charged exorbitant fees from merchants using its platform. According to the committee’s report, third party vendors paid $ 39.7 billion in fees to Amazon in 2018. Amazon did a total of $ 160 billion in business that year.
That is, he collected about 25 percent of the total business as fees from the vendors. This amount includes commissions, shipping fees and other third party services. But this does not include the advertising expenses of third party vendors, which is a huge amount.
Amazon is also accused of misusing customer data, according to a report in the American Wall Street Journal. The Wall Street Journal reported in the same year after an investigation that Amazon used data from independent vendors to create a rival product for their product. Significantly, the Amazon company has been claiming that when it prepares and sells its products, it does not use the information received from third party vendors. But the Wall Street Journal reported that the company had actually done so.
Chinese regulators had initiated action on Alibaba, stating that customers’ data monopolies on the market are used to their advantage, which is a matter of great concern. According to Chinese officials, this behavior of big companies can become an obstacle for new entrepreneurs to enter the market.
Western analysts have pointed out that this is not often the case when China and the US regulators initiate similar action on the same problem. But the internet retailing business has created similar problems in both countries. According to experts, companies like Amazon, Google, Facebook etc. are in a big profit position due to ‘network effect’ (broad reach). Taking advantage of this situation, she is trying to crush her potential rivals. This problem has also been felt in Europe, where recently, serious initiatives have been taken to rein in big tech companies.