WSJ: Amazon ‘Strong-Arms’ Smaller Partners Using Monopoly Power

Amazon CEO Jeff Bezos, seen in a 2018 photo, decided to fight back following what he said was an extortion attempt by the National Enquirer, a supermarket tabloid controlled by a friend of President Donald Trump
ALEX WONG/AFP

In a recent article, the Wall Street Journal outlines how tech giant Amazon uses its immense monopoly power to convince vendors in one market to interact with Amazon services in others.

In an article titled “How Amazon Strong-Arms Partners Using Its Power Across Multiple Businesses,” the Wall Street Journal details how tech giant Amazon uses its power in various industries to convince vendors to work with them in other categories by threatening to crush the smaller partner’s entire existence.

The Wall Street Journal provides an example of this, writing:

Amazon.com Inc. last year told smart-thermostat maker Ecobee it had to give the tech giant data from its voice-enabled devices even when customers weren’t using them. The Canadian company said no.

The smaller company feared that complying with the demand would violate customer privacy, said a person familiar with the episode. Ecobee’s devices work with Alexa, Amazon’s voice-powered assistant, and it already shared some data with Amazon, the person said. Moreover, the company worried Amazon would glean insights from Ecobee’s users that it could use in competing products.

Amazon responded that if Ecobee didn’t serve up its data, the refusal could affect Ecobee’s ability to sell on Amazon’s retail platform, the person said.

According to the Wall Street Journal, Jeff Bezos’ company regularly uses leveraging tactics such as this to compel partners to accept terms from another part of the Bezos empire.

According to Amazon executives and officials at the companies on the receiving end of their tactics, Amazon goes much further than typical product bundling and tough negotiating largely due to the fact that the company can threaten punitive action on vital services it offers, such as its massive e-commerce platform.

Partners often give in to Amazon’s demands due to the power the company holds in a range of market sectors, according to executives.

David Barnett, the CEO of PopSockets, a cellphone accessory manufacturer, stated that Amazon employees can make threats like this as Amazon is so powerful. “Their employees are going to try to hit their goals by whatever means they can, including these asymmetric relationships,” he said.

Read more at the Wall Street Journal here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com

.

Please let us know if you're having issues with commenting.