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Amazon should be broken up, small merchant coalition says

‘Small businesses are in crisis,’ said Stacy Mitchell.
Image: Bloomberg

A new coalition of small business organisations is urging policymakers to break up Amazon.com Inc.

Small Business Rising, which represents grocers, hardware stores, pharmacies and bookstores, on Tuesday laid out a set of goals aimed at reinvigorating US antitrust enforcement, including a call to separate Amazon’s own retail business from the marketplace that hosts third-party sellers.

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Convened in part by the Institute for Local Self-Reliance, a small-business advocacy group and a longtime critic of Amazon’s market power, the coalition is likely to ramp up the pressure on the world’s largest web retailer, which has thrived during the pandemic as home-bound shoppers stormed online. The coalition comprises more than 20 organisations including the American Booksellers Association, the Alliance for Pharmacy Compounding and the National Grocers Association, which represent more than 60 000 independent businesses

“Small businesses are in crisis,” said Stacy Mitchell, the ILSR’s co-director. She said the pandemic-fueled economic turmoil and the commanding presence of dominant firms like Amazon helped inform the coalition’s goals. “As one bookseller said to me, ‘It says Covid on the death certificate, but the underlying condition was Amazon.’”

The group also is calling for changes to antitrust laws that would empower regulators to stamp out anti-competitive tactics, as well as stricter review of mergers among big industry players.

Policymakers around the world have scrutinised Amazon’s practice of competing with the independent sellers who now account for most sales on its web store. Critics say Amazon treats sellers as disposable and beholden to its fees and other demands. The company also has been accused of using seller data to inform the design of its own products.

Amazon’s conduct and seller critiques featured prominently in a Congressional antitrust committee report last year that found the company wielded monopoly power over small merchants.

Amid rising pressure from small business activists and politicians, Amazon has in recent years sought to portray itself as a friend to small businesses, pitching stories of successful sellers in ad campaigns.

The company’s critics “are pushing misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices and reducing consumer choice and convenience,” an Amazon spokesperson said in an emailed statement. “Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers.”

The Wall Street Journal reported on the new merchant group earlier Tuesday.

Gina Schaefer, who owns 13 hardware stores in the Washington area that are affiliated with Ace Hardware Corp., said she hears from suppliers regularly who feel pressured to sell on Amazon but struggle on the site because of counterfeit products or rising advertising and other costs.

“A couple of them have really feared going out of business,” said Schaefer, who signed onto the coalition. “I just need the folks on the Hill to realise, we need help leveling the playing field.”

© 2021 Bloomberg

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