Building a Monopoly

As Amazon began to attract customers and expand its product offerings, it took a different approach to growth. Instead of seeking to turn a profit as quickly as possible, Bezos played the long game, reinvesting Amazon’s earnings in the business to such a degree that it didn’t turn its first quarterly profit until 2001 and its first annual profit until 2003. For years to follow, Amazon’s profit margins remained slim as it expanded its empire.

This was undoubtedly a great business strategy, but it came with consequences. By operating at a loss for a decade, Amazon was able to provide goods and services below cost to drive out its competitors and dominate the markets it operated in. This only became easier as it grew, as the case of Diapers.com shows.

In 2009, Bezos saw that Diapers.com was gaining popularity with parents, so Amazon set up a meeting with its founders. When they refused to sell, Amazon set its prices on diapers and other baby products 30 percent below those offered by its competitor, and when Diapers.com adjusted their prices, the ones on Amazon changed accordingly. Amazon was using the profits from its other products to sell baby products below cost so Diapers.com would have to sell itself to Amazon or go out of business. Amazon even launched a service called ‘Amazon Mom’ to offer baby products at even steeper discounts until, on 8 November 2010, Diapers.com finally sold to Amazon. Not long after, Amazon Mom was terminated and prices returned to normal.

The practice of offering products and services below cost to drive out competitors is called predatory pricing, and it’s an anti-competitive tactic. Over the years, Bezos has repeatedly abused the power Amazon amassed from underpricing its offerings to drive competitors out of business, squeeze third-party sellers on its platform, and extract public subsidies from state governments across the United States. Amazon is already under investigation for anti-competitive practices in the United States and the European Union, but there’s a much deeper consequence of its success.

The model of underpricing a service to drive out competitors and establish a monopoly position has become a core business model in Silicon Valley – one that venture capitalists will burn billions upon billions of dollars in bids to see to fruition. While consumers may see benefits in the period the company is driving out its competitors, like parents did for the brief period Amazon was trying to undercut Dispers.com, monopolists don’t tend to have much regard for their workers.

Exploiting a Growing Workforce

In Bezos’ letter announcing his new position, he asserted that ‘[i]nvention is the root of our success’, but some people might dispute that claim. It’s common to ascribe the growth of a company, especially in the tech sector, to their visionary leader and seeming technological prowess, but Amazon would be nothing without its 1.3 million workers, most of which organise, fulfill and even deliver the packages that are the company’s core business.

The stories of terrible working conditions at Amazon are nothing new. Back in 2011, workers exposed the company for failing to install air conditioning at many of its warehouses, causing workers to overheat and faint on the job. In recent years, it’s also become clear that Amazon workers are expected to meet almost impossible production targets, feel pressured to skip bathroom breaks, and are overworked to the point that worker injuries are nearly double the industry standard in the United States.

Whenever workers tried to push back, Amazon fought them vigorously. The company is known for its union-busting tactics, and during the pandemic it was exposed for hiring operatives from the notorious Pinkerton agency to spy on workers, environmental groups and labour unions. It was also found to track internal listservs and private Facebook groups for worker organising.

In recent years, Amazon has also built out one of the most expansive shipping networks in the United States, but unlike the United States Postal Service or UPS, it relies on non-unionised labour and even a series of subcontractors and independent contractors to make deliveries. Amazon already drags down wages in communities where it sets up fulfilment centres, and shifting more delivery jobs to its non-unionised delivery network not only lowers wages in that sector, it also threatens a public institution that’s been a stable source of employment for Black Americans.

Bezos presents himself as someone who cares about workers, writing in his letter that Amazon used its ‘scale and scope to lead on important social issues’, including ‘our $15 minimum wage and the Climate Pledge’, yet that’s nothing but corporate spin. The $15 minimum wage was a response to concerted pressure from workers and lawmakers over the fact many of its employees relied on food stamps. Raising wages took some negative attention off the company, even as some workers said they were actually worse off as Amazon rolled back other benefits.

The growing worker organising at Amazon is all the evidence one should need to see Bezos wasn’t a good boss. The company has failed to live up to its climate goals, and even fired outspoken white-collar activists. During the pandemic, it failed to keep workers safe to such a degree that workers took action across the United States. It even tried to smear one worker who was fired for organising, but it blew up in executives’ faces when their meeting notes leaked. Workers at a warehouse in Bessemer, Alabama will even begin voting on whether to unionise later this month – and the company is fighting it tooth and nail.

Rehabilitating a Tarnished Image

In the next few years, Amazon will likely face more challenges than ever has. Worker militancy across the tech sector is increasing, and there will surely be more attempts to unionise its warehouses in the future, especially if the workers in Bessemer are successful. The company will also likely face anti-monopoly lawsuits in the United States, if not in the European Union as well, and Bezos is getting out of the spotlight before that happens.

Near the end of his letter, Bezos explained that taking the Executive Chair position will give him ‘the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions’. As Amazon continues with the relentless ethos imbued in it by Bezos, he may now bring it to other ventures while trying to soften his image.

In 2018, Bezos was asked what he’d do with his billions, and his response was telling: ‘The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel. That is basically it.’ With a net worth of $130 billion, which dropped after his divorce from MacKenzie Scott in 2019 and soared through the pandemic to close to $200 billion, his eyes were trained not on the escalating climate crisis, the growing crisis of inequality, or the homelessness crisis gripping Amazon’s home city of Seattle, but on the stars.

This shouldn’t come as a surprise. Amazon was established in Washington to reduce its tax burden and has been deemed the worst major tech firm for its tax avoidance strategies. It vigorously fought attempts to make it charge sales tax on purchases outside Washington, only relenting in 2017, and more recently fought a small tax in Seattle to fund programmes to help the homeless, even as it frequently pays no federal income tax in the United States.

Bezos seems to have learned a lesson from Bill Gates after having his name dragged through the mud in recent years. Gates was reviled after the Microsoft antitrust case and took to philanthropy to rehabilitate his image. Years later, and after giving millions to media companies, Gates is showered with positive press about how he’s saving the world by giving away his money, distorting the real impact of how he deploys his vast wealth.

Bezos seems likely follow a similar playbook. He’s already distributed money to homeless groups through his Day 1 Fund and climate organisations through his Earth Fund. But this giving hides the fundamental problem.

Fighting for the Future

As the richest man in the world, Bezos has immense power, and ultimately he is going to use his wealth to defend and advance his interests, as his comments about space suggested. After decades of tax cuts, governments around the world have been starved of the revenue required to address the cascading crises of the twenty-first century, and billionaires cannot fill the gap no matter how much their public relations teams and a sycophantic corporate media system tell us otherwise.

The power and wealth that Bezos wields is the direct product of the brutal exploitation of more than a million workers that are treated not like human beings, but cogs in a great machine that will not stop until there’s no escape from its all-encompassing network of platforms and services. We must reject not only his attempts to use his ill-gotten gains to rewrite his personal story, but also his inevitable desire to set our horizons on a future that puts the interests of billionaires before those of the rest of humanity.

As he steps away from the position of CEO, we should recognise just how obscene it is for one man to have gained an estimated $90 billion during a global health crisis where US unemployment soared to levels not seen since the Great Depression and more than 50 million Americans were going hungry. His name should be synonymous with the cruelty of the system he contributed to and benefited from, and his very existence proof of the need to dismantle the capitalist structures that allow such extreme inequality to exist in the first place. Jeff Bezos deserves no redemption.