business news in context, analysis with attitude

The Information has a second-day piece that offers some context and analysis regarding yesterday's story about Amazon settling two European Union antitrust cases - not paying a fine, but agreeing to change business that regulators said hurt third-party sellers on its Marketplace platform.

An excerpt:

"Amazon agreed to let merchants selling under the Prime label use any delivery service rather than limiting them to its own. When Sen. Amy Klobuchar proposed that idea as part of a big tech bill earlier this year, Amazon argued that it had tried to let merchants use other delivery services, only to find they couldn’t make the time frames Prime customers expected. Amazon’s pushback is believable: Why would the company spend money building its own logistics networks if other suppliers could do the job just as well? The problem with the European settlement is that if non-Amazon delivery services get a product to a customer late, the merchant, the customer and the Prime brand will all suffer.

"What Europe’s antitrust police forget is that the big tech companies are doing a good job of screwing up their own businesses without getting the bureaucrats involved. As we pointed out earlier this month, Amazon is jamming so many ads into its website that its search results are now often useless. Ditto for Google’s search. In fact, Facebook has hurt Facebook Marketplace by allowing scammers to proliferate on the site. (Why wasn’t that in the EC’s complaint?) If regulators just wait a bit, these companies will lose market share of their own accord, if they’re not doing so already. There’s no need for the Europeans to accelerate that process, particularly if it hurts consumers along the way."

KC's View:

I think this analysis points to a couple of things that are really important.

First of all, there is the contention - which I think is true - that by forcing Amazon to adhere to practices that deliver a sub-par customer experience, it damages the company's brand, and shopper, and, where they realize it or not, the third parties that opt to use a logistics network other than Amazon.  Why should I be able to sell my product on Amazon, getting the advantages of access to all its customers, but then take a fulfillment shortcut that subverts the Amazon brand and disappoints the shopper?  That doesn't seem fair, or right.

Second, I think the analysis correctly observes that companies like Amazon may be making some decisions - some, not all - that prioritize monetization over customer satisfaction.  In the old days, that would have been cause for excommunication from the Amazon community.  But these days, not so much.  Which, I think, opens the door for competitors and alternatives to make their case for why shoppers should patronize them and not Amazon.