This licenses a multiplicity of abusive practices. One victim is Birkenstock, the maker of the iconic sandals. As Duhigg reports, the company found that Amazon was allowing third-party retailers to sell badly made counterfeit Birkenstock sandals at cut-rate prices, thereby harming Birkenstock’s brand and ability to set prices. Not only did Amazon refuse to police this fraud, but it bought over a year’s supply of Birkenstock inventory to resell on its site—essentially allowing the web giant to take over the pricing and marketing of Birkenstock’s products. When Birkenstock protested, Amazon ignored them. After Birkenstock refused to do further business with it, Amazon went to Birkenstock’s authorized retailers to try to buy up their supplies.
Amazon also uses its vast market share to beat into submission the companies that want their products sold on its platform. When the publisher Hachette complained about the prices Amazon was charging for its books and ebooks, “Amazon delayed shipments of Hachette books,” writes Foer. “When consumers searched for some Hachette titles, it redirected them to similar books from other publishers.” When Hachette published my novel Eden In Winter, Amazon did precisely that.
Further, Amazon itself uses data from retailers who sell on its site to clone their most successful products and then compete with them by undercutting prices.