Brad Stone, a senior editor at Bloomberg News, is now the author of a second book-length portrait of what may be the most successful business of the 21st century. When Stone’s first book, The Everything Store, was published in 2013, Amazon founder Jeff Bezos was worth a piddling $27bn. That number has risen to $190bn, 70% more than he had at the beginning of the pandemic.
In a decade, Amazon has exploded into an exaggerated version of Engulf & Devour, the hydra-headed conglomerate invented by Mel Brooks. Once upon a time only Barnes & Noble was threatened by Amazon, in the realm of online bookselling. Now Amazon has disrupted everything from department stores and supermarkets to Hollywood movie production and even space travel.
Bezos’ best act of citizenship was undoubtedly his rescue and resuscitation of the Washington Post, one of America’s great newspapers and from which, unlike every other business to which he is connected, he has remained admirably detached. His business triumphs include the invention of the Alexa virtual assistant and his company’s hugely profitable computer cloud, so successful that he tried for years to hide its earnings, to stop Google and others realizing what a rich business it was.
But Amazon has also fought unions in every country where it owns a warehouse, sought billions in tax breaks and reduced stock opportunities for hourly workers even as Bezos trumpeted their raise to a minimum of $15 an hour.
Stone acknowledges that Bezos’ gigantic wealth raises “unsettling questions about the asymmetric distribution of money and power”. With a market capitalization exceeding $1.5tn, Amazon embodies everything that is great and terrible about the modern world. It has become “a referendum on the responsibilities that large companies have toward their employees … and the sanctity of our fragile plane”. Bezos is “either propelling the world into an exciting future” or “helping to blot out … free enterprise itself”.
Most of this very readable book is devoted to Bezos’s triumphs. It is undeniable that he has taken synergy and brand-building in directions no one else ever thought of. For example, many colleagues were skeptical when Amazon began to invest billions of dollars a year in Prime Video. But Bezos realized it not only helped retain Prime customers, a vital source of revenue, but also enhanced his other brands.
“When we win a Golden Globe, we sell more shoes,” he explained.
On the other hand, the only things that seemed to prod him to improve the conditions of his blue-collar workers were periodic media exposés.
When one of his executives proposed a modest investment to air-condition his warehouses, Bezos dismissed the idea as too costly. But then the Morning Call of Allentown, Pennsylvania reported that workers were passing out in the Lehigh Valley warehouse, then being transported to the hospital by ambulances the company kept waiting outside. Only then did Bezos approve $52m for air conditioning – “establishing a pattern of making changes only after he read criticism in the media”, as Stone puts it.
Amazon is dominating so many different businesses, it has finally inspired a renewed interest in antitrust law, in America and Europe. A student, Lina Khan, played a key role when she published a 93-page article in the Yale Law Journal. Khan pointed out that unlike previous monopolies whose market share created unnecessarily high prices for consumers, the main damage Amazon has done has come from the relentless lowering of prices, in order to “bleed out competitors and amass market share”.
Khan was hired by House subcommittee on antitrust, which ultimately forced Bezos to testify before Congress. His appearance featured this memorable question from Lucy McBath, a Democrat from Georgia: “If Amazon didn’t have monopoly power over these sellers, do you think they would stay in a relationship that is characterized by bullying, fear and panic?”
Bezos rejected “the premise” of the question but it inspired Stone to interview several third-party sellers who originally praised Amazon’s contributions to small businesses. Many had changed their minds.
Paul Saunders, a seller of high-quality housewares and a former Amazon booster, now reported that rising fees, increasingly expensive advertizing and direct competition from Amazon Basic had gutted his profits.
The congressional committee uncovered the same practices, and made “a persuasive case that the big tech platforms arbitrarily and self-interestedly controlled our political discourse, our financial lives and the health of countless smaller companies”.
“There is a clear and compelling need” for a “antitrust enforcement” to “take action that restores competition”, the committee concluded. And in hopeful sign that Joe Biden is listening, he nominated Khan to be a commissioner on the Federal Trade Commission.
Amazon is now so unpopular, Democrats and Republicans on the Senate commerce committee joined to approve her nomination.