Large companies have risen all around the world, but even though governments attempt to control this, there are still loopholes for monopolies to rise. A monopoly attempts to dominate product offerings in a specific industry. They can only arise in a free market and are considered to be the extreme result of it. While other businesses might have in mind surviving and producing enough money in their brand, monopolies attempt to control the market, fix prices, and kill competition. Governments, through time, have tried to establish rules for a balance between free market and government control. But even though rules guard the market, large companies like Amazon have found ways around this “free market” while opening some doors to small companies.
Regulations started in the past with governments developing Antitrust Laws such as the Sherman Antitrust Laws and the Clayton Act. While the free market started rising, these were used to break apart large corporations taking over the industry. At first, these laws regulated the biggest companies at the moment, such as the Standard Oil Company and the Transcontinental Railroad Companies, but they were only enforced for a while to keep businesses from growing. The Antitrust Laws attempted to dissolve trusts which are the assets of the company held by a third party; this can be described as shares. The more shares a company gives out, the more money people are putting in them; this makes them collect even more money from the common people, as well as closing the door of opportunities to the rising companies. While monopolies are guided by money and the expansion of it, from the start, Amazon has had a different mindset. Amazon has been willing to lose money to get market shares. The company has been willing to cut its gain to undercut providers and smaller companies; because of this odd idea, to the public eye, and the government, it is a confusing business model.
When there is no competition, there is no incentive to do better when competing with a long-established company such as Amazon. This is why instead of competing against Amazon, the companies start joining them to use it as a platform to sell and if everyone does this, it is giving too much power to Amazon itself. The companies that have been in the business for a short time have all seen the benefits of selling through this platform; this is mainly because of the trust and traffic that has already been built with the consumer. 49% of all US E-commerce happens through Amazon while the rest of the companies don't even have 10% slots. They have been working towards being the top platformers of streaming, music, movies, books and more. They are even about to top Walmart as one of the largest apparel retailers in America which shows much power they have been obtaining through the years.
Now, when one starts selling on Amazon, companies must be transparent to them, meaning that Amazon can see their most selling product, least selling and everything that works and doesn't work. After obtaining this information they can utilize it for their own benefit. For example, Amazon may start having its own production of peoples’ best
selling item, assuring that it will succeed and that part of the consumer’s traffic will be theirs. They could even charge ower prices to get most of the sales of the product after utilizing one's business as a way to test the waters of how the public will react. Because of this, as shown, Amazon undercuts its competitors and dominates entire markets which it can do without breaking any laws. This is because it complies with the consumer welfare standard which asks companies to keep prices low and services great.
Amazon has taken the world by storm and has built large platforms that encompass everything one might need; from small things such as toiletries to larger produces like electronics. Convenience and commodity is the basis for companies that work like Amazon; they focus on getting the products that one wants to your doorstep. This gives one the satisfaction of receiving everything easily and quickly. Amazon, behind the scenes, has taken over all types of products and services. Will this domination over the market ever stop? Or has the company gotten too powerful for government regulations to stop it?
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