The FTC sues to break up Amazon over an economy-wide “hidden tax”
In order to effectively break up Amazon someone needs to deliver a trusted e-commerce layer for payments and delivery that rivals it <i>and</i> their delivery side.<p>People buy from them because it’s incredibly easy to check out, and because it’s incredibly reliable for delivery and most importantly they are the verb for e-commerce on the Internet: they own “buy online” as a brand and that’s a hard thing to compete with even if it gets broken up like ma Bell. Those three elements are very hard side problems you have to overcome to build a competitor.<p>Shopify is well on their way to delivering an easy checkout experience that could be aggregated to create a competitor of sorts, but delivery remains the hard side problem — the network of warehouses and reliable short term delivery windows you can count on. This aggregates demand and enables centralized payments, but you end up essentially replicating Amazons delivery system eventually to gain efficiency or remaining vulnerable until someone comes and takes you out with shipping rates.<p>It’s also the Craigslist problem all over again as well, because every small category of Amazon is an ocean to a competitor and each needs to solve all three hard side problems, so peeling off each division and improving the experience to consumers is a colossal task that wouldn’t create the same potential for efficiencies of scale or would end up advancing the possibility of winner take all relocation of the exact same issues.<p>I really do think Amazon needs to be broken up to create more competition, because the alternative seems like it would look a lot like the Costco scene from Idiocracy. That’s not a healthy end-result.<p>Also IMO Jet.com was the last upstart of any seriousness and they got taken out by Walmart, and that’s another angle anyone who breaks up Amazon has got to think about.<p>And <i>then</i> their is their oil and gas pipeline in the form of AWS, which is a strategic barrier all itself and allows Amazon to have insane scale that’s <i>entirely paid for</i> by entirely different customers. They can effectively operate for free on their own cloud.<p>They have layer upon layer of network type advantages that have to be unbundled if they are to be broken up, and unless it’s done profoundly well, they’re going to remain 1100 lb gorillas.<p>I could probably organize these thoughts better and more concisely but don’t have time at the moment, but this is what immediately comes to mind.