It’s too late to try to break up Amazon and it would be a dangerous precedent for other larger companies as well. Breaking up AT&T didn’t provide choice as much as higher prices and I doubt this administration is interested in being seen as harsh on business — politics notwithstanding.

A little retail history is in order: Back in the heyday of Sears, it owned Allstate and other financial services brands that doubtless ran bigger profit margins than its retail operations — and they probably subsidized Sears’ growing market share and expansion plans. The role of AWS is not that different — and to pile on some irony, there are reports in today’s Wall Street Journal that Walmart is interested in acquiring Humana. Is the world’s largest retailer interested in buying a health insurer because of the low margins?

Until Amazon came along (and became the bête noire of unsuccessful brick-and-mortar retailers), Walmart filled that role for many years. It’s unfitting for Mr. Simon to propose some sort of governmental intervention, as if the goods and services Amazon provides represent some kind of monopoly. Let’s face it: President Trump’s griping has nothing to do with Amazon’s business practices, and everything to do with Jeff Bezos’s ownership of the Washington Post.

I don’t agree with this at all. Amazon has been instrumental in helping retail break free and drive towards being a consumer-focused industry again. The last 30 years weren’t consumer focused — it was a series of Fortune 100 businesses working together to maximize profit. Mr. Simon just probably isn’t used to seeing what real consumer-focused activity looks like.

When I look around the marketplace, I see exciting digitally native brands and new retailers that are thriving. Yes, there’s always someone like Amazon or Walmart that is lurking around trying to own every corner of the market, but businesses have figured out how to manage around them.

If we’re really looking at this — the one that needs to get broken up is Facebook. Between Instagram and Facebook, they own almost all of the digital media outlets and seem to have no regard for our digital identities.

I’ve been researching this topic in-depth for a long-form article I’m writing but keeping personalities out of it. I don’t know Mr. Simon, but my long-distance impression is that he’s expressing sour grapes for being part of the team that was asleep at the wheel and bested by a nerd with a vision. George points out the irony of his comments nicely. Walmart, Macy’s, Sears, Toys “R” Us or anyone has had decades to create a cloud computing service or embrace e-commerce properly and they did nothing. If they had, there would be no Amazon. That’s not Amazon’s fault, it’s theirs. It’s easy to make off-the-cuff comments about breaking Amazon up, but the devil is in the details. Amazon will not roll over if antitrust action is taken against them. They have the means and will fight relentlessly. And some of the arguments that would be used against them by the government, if leveraged successfully, would if applied universally, impinge upon the business practices of Walmart, Google, and others. Additionally, my argument is that the… Read more »

Retailers may not like Amazon’s business strategy of using one part of the corporation to subsidize another, but is that terribly different than the use of zone pricing and using the profit from one zone to support another? Other retailers have employed similar strategies of owning non-retail business and using that income to support their retail operations.

There is nothing wrong in subsidizing one business unit with capital from another within the same group. This is happening everywhere. What is anti-competitive are the huge tax advantages Amazon has created in comparison to more traditional retailers with physical stores. Here government must intervene and create equal (tax) or at least fair conditions for brick-and-mortar, brick and click and pure e-commerce players. Every form needs to be judged on the same basis.

Wow, what a simplistic approach to a very complicated issue. Americans have embraced Amazon and I can’t imagine they have an appetite for chopping it up. Mr. Simon’s proposal is going nowhere.

… The sky is falling, the sky is falling … Amazon is certainly a disruptor but they have been creative, innovative and have reacted to and delivered the digital consumer experience. To suggest government regulation is petty and Victorian. Retailers should learn from Amazon and embrace being digital. Walmart, Target and The Home Depot all had the same opportunity. As a consultant, I was preaching this inevitability back in 2006. While people listened, they were not experiencing the pain to change. The future is now today and now everyone is in the “hurt locker.” Retail is not going away but it requires massive remodeling. Being digital requires not just change but scrapping traditional paradigms. In the new world order of retail, Amazon and Google are the gorillas — who will be the chimps and monkeys? The store needs to transform from a place to transact to a community to share and embrace.

Why is Amazon an anti-competitive force and Walmart not? I think an activist investor would have proposed a breakup for other reasons, but Mr. Bezos owns too much of the stock for that to happen.

I agree with Dick Seesel. It’s a bad precedent, based on likely political motives and ignores the elephant in the room – Walmart buying Humana.

Amazon’s “guilt” has been to have a solid vision of how the customer wants to shop and to execute relentlessly against that vision through constant innovation and a long-term investment strategy. They have not been subsidized, have not practiced predatory pricing or anti-competitive behavior and, to the best of my knowledge (which is limited on this one), have not used their size and power to unduly pressure suppliers. On what basis does a government (well, a normally-run one) intervene because a company has been smart and successful?

No. Amazon has been a positive disruptor to an antiquated form of shopping and should not be penalized for doing so. It is the complacent competitors who have hoped that Amazon would crash and burn or otherwise go away who need to hold up the mirror and see that their lack of innovation has permitted Amazon to grow to its current levels of dominance. Keep the government out of this debate. Make changes as necessary to compete more efficiently and effectively.

We went through this 100 years ago, as seen in “The Great A&P and the Struggle for Small Business in America” by Marc Levinson. Ironic that a former Walmart executive is making the competitive complaint. And it is significant that it is recognized that Amazon can afford to sell at or near ZERO MARGINS because of growing and massive funding from their Amazon Web Services (AWS). So Walmart plays nearly the exact same game, squeezing out their smaller competitors — and attempting to compete with Amazon — by relying on what are essentially ADVERTISING services. It’s of course true that Walmart delivers the goods to shoppers, but their PROFITS come from “selling” shelf space (and location) to their suppliers, along with “advertising,” whether in-store or with Walmart’s broader advertising. There is nothing nefarious about using supplier payments for profits and driving for the lowest possible margins — just adequate to cover operations, and maybe a few percent. What is weird is that most of the world thinks Walmart makes their profits selling things other than… Read more »

A sidebar issue is Jeff Bezos. Does he have too much power to affect or change so many things in the country? When in history has this proven to be a good thing?

Break up what? It’s not like Amazon has dozens and dozens of subsidiaries that are a result of acquisition. Yes there are a few, and the big ones are Whole Foods and Zappos. Check out this list if you want to see more.

I don’t see Amazon buying up competitors to grow their core business. They are making strategic acquisition, such as Abebooks, acquired by Amazon in 2008, which is a site focused on finding rare books. Or Audible, also acquired in 2008, that provides audio versions of the books they sell.

Extraordinary success breeds adoration and contempt. To date, Amazon has wildly succeeded in changing existing economic models across industries while being rewarded by consumers and financial markets. Economist and even the Federal Reserve Chair, Jerome Powell, have ascribed the Amazon Effect to the historically low and stable inflation rate levels. Progress is achieved through the numerous new and innovative business models and continuously raising consumer (and business) expectations — this in turn violently disrupts the status quo. Such is the visceral nature of change and it will never have a fixed endpoint nor will its path be clear and uncertain. Management and leadership are about assessing multiple scenarios, identifying a future vision and preparing their organizations for the multiple paths forward. This requires taking certain risks, being agile and obsessing in the competition over incremental new customers. Runaway winners that succeed in changing the competitive rules, especially if coming from outside existing paradigm, will always be attacked and labeled as unfair. Such vitriolic attacks will only serve to give false hope to the economic laggards.

This is all total baloney! Amazon is nowhere near a monopoly, nor is it anti-competitive. It is a disrupter that has found new ways to service consumer demand. Companies like Amazon deserve our respect and praise, not absurd and illogical criticism!

Nonsense! Talk about the pot calling the kettle black! The primary sniff test for determining if a business has monopoly power is that it shows harm being done to consumers. How has Amazon harmed consumers? All they’ve done is force an entire industry to rethink how they serve their customers. I recall Walmart being in this position once upon a time, so it’s hard to accept the accusation.

Now, a better question may be: does Amazon have an unfair advantage as a retailer given their other business areas? That could be debated. Although you could make an analogous argument that any consumer goods manufacturer that opens their own stores has an unfair advantage by cutting out middleman distribution. No, at the end of the day, the accusations are mostly false (especially the USPS ones) and are purely politically motivated.

Breaking up Amazon is a poor idea based in ignorance and largely an uncompetitive understanding of the facts. It is Amazon who is forcing the retail market place to become more efficient, effective and to adapt to a new model. There is no “rule” for how a retailer must make their money, and if the Amazon model works that is great. We could say the same for the club stores, where Costco makes its money from membership fees instead of product pricing. That Amazon makes more money on its cloud-based services and advertising than its retail sales doesn’t matter. More importantly, it is how Amazon disrupts the current models in the marketplace and forces change. Soon this will apply to healthcare and the world cannot wait!