Shirola: Amazon is a monopoly and needs to be broken up

Wesley Shirola, Columnist

Today, in the age of technology, a few large companies control nearly the entire tech market. None seem as controlling and dominant as Amazon, however. Amazon is a monopoly which threatens new startups, other existing firms and the American economy as a whole. The United States has historically been an antitrust nation, and it only seems clear that Amazon needs to be broken up.

It began in the late 19th century, when hundreds of small short-line railroads in the United States were being bought and consolidated into giant railroad systems. Fearing that small business, the cornerstone of the American economy, was under siege, the government quickly took notice. U.S. Sen. John Sherman (R-Ohio) put it most eloquently: “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessaries of life.” The Sherman Antitrust Act — which makes it illegal to restrain trade or to form a monopoly — passed through Congress with a near-unanimous vote in 1890 and to this day remains the core of America’s antitrust policy.

During the Progressive Era, which spanned from the late 1800s to about the end of the 1920s, politicians placed passing and enforcing strong antitrust laws high on their agenda. Teddy Roosevelt, known as the “Great Trust-Buster,” brought suit to many companies under the Sherman Antitrust Act during his tenure as president. Succeeding him, William Howard Taft sued a staggering 99 companies as president. In fact, the most well-known trust-bust occurred under his watch: the breakup of the Standard Oil Company. In 1911, the Supreme Court found that Standard Oil had violated the Sherman Antitrust Act and broke the monopoly into nearly three dozen separate companies.

“Trust-busting” remained a commonplace practice through much of the 20th century but has not made big headlines since 1999, when a coalition of 19 states and the Department of Justice sued Microsoft in a highly publicized trial which found that Microsoft had used coercive tactics against many companies in an attempt to prevent competition with its web browser, Internet Explorer. But that may soon change.
On Sept. 4, Amazon reached the $1 trillion market cap for the first time, becoming just the second U.S. company to hit that milestone. While Amazon currently controls only 5 percent of all retail sales in the U.S., this number is only going to increase. What worries me most, however, is Amazon’s foray into other sectors of the economy. Amazon is an ecommerce and cloud computing company at heart, but CEO Jeff Bezos doesn’t want to stop there. Instead he has been greedily digging his nails into a vast array of industries from music, to television, to groceries and most recently pharmaceuticals. It seems that never before has one firm been so dominant in so many industries.

Brittain Ladd, a contributor for Forbes, has been saying since 2013 that Amazon could operate as five distinct companies: Amazon Web Services, Amazon Logistics, Amazon Retail, Amazon Entertainment and Amazon Health and Life Sciences.

President Donald Trump has taken notice, tweeting recently that Amazon has a “huge antitrust problem.” It is imperative that he pressures Congress and the Supreme Court to actively evaluate options for crafting new laws or working with existing ones that could force an Amazon bust and breakup. Due to the growing number of voices in business, politics and the media questioning Amazon’s ethics, growth and market share, Congress and the Supreme Court will have a hard time not evaluating said options.

Bezos is no doubt aware of this. In fact, some have speculated that Amazon is so concerned about the possibility of government intervention that Bezos may choose an area near Washington for its second headquarters, where it could manipulate perceptions in the White House and U.S. Capitol.
Amazon is as much of a monopoly as any Standard Oil or Carnegie Steel, and it’s only continuing to grow. It is time to break it up before it gets even bigger, wreaks havoc on the American economy and hinders our possibility of achieving the American Dream.

Wesley Shirola is a Weinberg sophomore. He can be contacted at [email protected]. If you would like to respond publicly to this column, send a Letter to the Editor to [email protected]. The views expressed in this piece do not necessarily reflect the views of all staff members of The Daily Northwestern.