Competition Upstream of Amazon
Martin Edwards | 25 Vand. J. Ent. & Tech. L. 691 (2023).
The rise of large, market-concentrating technology firms like Amazon, Inc. is driving commentators, regulators, and politicians to rethink the law of antitrust. In particular, “New Antitrust” reformers propose that the narrow focus on consumer welfare has caused antitrust law to stop too short in corralling the broader social and economic consequences of Big Tech’s “bigness.” Proponents of the consumer welfare standard argue that it has worked well to distinguish beneficial competition from harmful aggression and, further, to reduce costly legal uncertainty. There is now momentum for substantial reform to antitrust law and practice and a growing debate about what such reform might include.
This Article contributes to the debate by presenting a modest case study of a market that is evolving on Amazon, Inc.’s Marketplace platform: the market for nonprescription components of continuous positive air pressure (CPAP) machines, medical devices prescribed to patients suffering from sleep apnea. The study reveals two observations. First, the underlying economic and doctrinal logic of consumer welfare antitrust remains sound. Second, the study illustrates positive social consequences beyond just the economic wealth and welfare that the consumer welfare standard uses as its lodestar. This Article focuses on the second observation because New Antitrust reformers’ core claim is that proponents of the consumer welfare approach are wrong to dismiss indirect negative social and economic consequences of bigness, such as harm to small business, stifling of innovation, and inequality.
This Article follows the New Antitrust reformers into this space by illustrating counterbalancing social and economic consequences from Amazon’s consolidation, including a thriving network of small and innovative dealers, other small innovators that serve them, increased employment opportunities, and even lowering of healthcare costs. Amazon has grown large and has concentrated online retail and related logistics, but its largeness has spurred innovation, competition, and social value-creation just upstream.