Amazon’s history seems to belie this claim. For more than a decade, Wall Street allowed the company to plow any profits into price discounts. Partly as a result, Amazon has grown so large that it can undercut other companies just by announcing that it will soon compete with them. When Amazon purchased Whole Foods, its market cap rose by $15.6 billion—some $2 billion more than it paid for the chain. Meanwhile, the rest of the grocery industry immediately lost $37 billion in market value. (Amazon protests that it has no control over how investors value its competitors.)
When a company has such power, Khan believes, it will almost inevitably wield that power far and wide, distorting not just the market itself, but the whole of American life. With sufficient power, companies can commission studies, rewrite regulations, bulldoze neighborhoods, and impoverish education and welfare systems by securing billions in sweetheart tax cuts. When a company comes to monopolize a market—when it grows so big that it can threaten other industries just by entering them—it ceases to be merely a company. It becomes an institution so powerful that it can rule over people like a government.
Robinson Meyer unpacks the story of Lina Khan and her investigation into Amazon and the antitrust movement. This stems from a paper, “Amazon’s Antitrust Paradox,” Khan wrote in the Yale Law Review. Although Meyer focuses on Amazon, this has ramifications for all the platform monopolies. It is also increasingly having an influence on education.