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Is Amazon the next Google?

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  • Budzinski, Oliver
  • Köhler, Karoline Henrike

Abstract

Dominant or apparently dominant internet platform increasingly become subject to both antitrust investigations and further-reaching political calls for regulation. While Google is currently in the focus of the discussion, the next candidate is already on the horizon - the ubiquitous online trading platform Amazon. Competitors and suppliers but also famous economists like Paul Krugman unite in criticizing Amazon's market power and alleged abuse of it. In this paper, we collect the multitude of allegations against Amazon and categorize them according to types of potential anticompetitive conduct or types of market failure. We provide an economic analysis of these allegations based upon economic theory as well as publicly available information and data. As one of our main results, we find that the most severe allegations against Amazon do not hold from an economic perspective and, consequently, do not warrant regulation or other drastic interventions (like breaking the company up). However, several areas of conduct, in particular, the use of best price clauses and the (anti-) competitive interplay of Amazon and the major publishers in the e-book market require competition policy action. The standard antitrust instruments, enriched with modern economic theory, should suffice to disincentivize the identified anticompetitive conduct for now.

Suggested Citation

  • Budzinski, Oliver & Köhler, Karoline Henrike, 2015. "Is Amazon the next Google?," Ilmenau Economics Discussion Papers 97, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:97
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    References listed on IDEAS

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    Cited by:

    1. Budzinski, Oliver & Gänßle, Sophia & Lindstädt-Dreusicke, Nadine, 2021. "Wettbewerb und Antitrust in Unterhaltungsmärkten," Ilmenau Economics Discussion Papers 147, Ilmenau University of Technology, Institute of Economics.
    2. Oliver Budzinski & Thomas Grebel & Jens Wolling & Xijie Zhang, 2020. "Drivers of article processing charges in open access," Scientometrics, Springer;Akadémiai Kiadó, vol. 124(3), pages 2185-2206, September.
    3. Nestor Duch-Brown, 2017. "Platforms to business relations in online platform ecosystems," JRC Working Papers on Digital Economy 2017-07, Joint Research Centre.
    4. Budzinski, Oliver, 2021. "Europäische Regulierung digitaler Dienste: Eine kritische Würdigung der Entwürfe DMA & DSA aus medienökonomischer Perspektive," Ilmenau Economics Discussion Papers 158, Ilmenau University of Technology, Institute of Economics.
    5. Budzinski, Oliver, 2017. "Wettbewerbsregeln für das Digitale Zeitalter - Die Ökonomik personalisierter Daten, Verbraucherschutz und die 9. GWB-Novelle," Ilmenau Economics Discussion Papers 108, Ilmenau University of Technology, Institute of Economics.
    6. Patrice Bougette & Oliver Budzinski & Frédéric Marty, 2019. "Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?," Revue d'économie politique, Dalloz, vol. 129(2), pages 261-286.
    7. Budzinski, Oliver, 2022. "Regulierung des E-Lending für das Gemeinwohl oder im Sinne der Interessengruppen?," Ilmenau Economics Discussion Papers 163, Ilmenau University of Technology, Institute of Economics.
    8. Oliver Budzinski & Victoriia Noskova & Xijie Zhang, 2019. "The brave new world of digital personal assistants: benefits and challenges from an economic perspective," Netnomics, Springer, vol. 20(2), pages 177-194, December.
    9. Budzinski, Oliver & Grusevaja, Marina, 2017. "Die Medienökonomik personalisierter Daten und der Facebook-Fall," Ilmenau Economics Discussion Papers 107, Ilmenau University of Technology, Institute of Economics.
    10. Haucap, Justus, 2018. "Big Data aus wettbewerbs- und ordnungspolitischer Perspektive," DICE Ordnungspolitische Perspektiven 96, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    11. Haucap, Justus & Heimeshoff, Ulrich, 2017. "Ordnungspolitik in der digitalen Welt," DICE Ordnungspolitische Perspektiven 90, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    12. Budzinski, Oliver, 2016. "Aktuelle Herausforderungen der Wettbewerbspolitik durch Marktplätze im Internet," Ilmenau Economics Discussion Papers 103, Ilmenau University of Technology, Institute of Economics.

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    More about this item

    Keywords

    antitrust; internet; platform economics; media economics; competition policy; innovation; Amazon; Google; e-books; book industry; best-price clauses; abuse of dominance; pricing; regulation;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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