Amazon market power has grown amid pandemic, unions tell FTC

A group of unions has filed a complaint with the Federal Trade Commission warning that Amazon.com Inc.’s market power has grown during the pandemic.

Bezos is scheduled to testify on Monday before a House of Representatives panel, alongside the top executives of Apple Inc., Alphabet Inc. and Facebook Inc. It will be Bezos’s first appearance before Congress. (REUTERS)

The complaint comes days before Chief Executive Officer Jeff Bezos is set to testify before a Congressional panel looking into the tech industry's allegedly anti-competitive behaviour. The unions say the e-commerce giant has taken advantage of the upheaval to entrench its position in online retail and gain more leverage over workers and small merchants.

The labour coalition, which includes Change to Win, the Communications Workers of America, the International Brotherhood of Teamsters and the United Food and Commercial Workers, previously asked the FTC to investigate Amazon's influence on wages and what it deems anticompetitive practices. In the latest complaint, the group calls for “immediate and decisive action to curb Amazon's most abusive practices and its market power.”

Covid-19 accelerated many market trends in favour of Amazon and e-commerce, offering “a preview of the future, and the time to act is now,” said Michael Zucker, who runs Change to Win, a federation of unions that convened the group. “There's a real danger of allowing one company to own the pipe and control the product that moves through it, that we think Covid underscores.”

An FTC spokesperson declined to comment on the complaint.

Maxine Tagay, an Amazon spokesperson, said in an emailed statement that the retail market is fiercely competitive and that the company accounts for “less than 4%” of U.S. retail sales. The statement also noted safety measures Amazon put in place at its facilities during the pandemic. “Nothing is more important than the health and well-being of our employees, and we are doing everything we can to keep them as safe as possible,” Tagay said.

Amazon has operated largely as usual amid the pandemic because sales of groceries and other essential items were exempted from government-ordered closings that temporarily shuttered many retailers. The company for a time prioritised stocking items it deemed essential or in high-demand, a move that left small merchants who sell on its retail site unable to carry on their business as usual.

Some small businesses heavily reliant on Amazon got shut out, merchants say. “Amazon told us we weren't essential at the time,” said Doug Mrdeza, whose Top Shelf Brands generates most sales on Amazon's marketplace. “They are making up the rules about what is essential and what isn't,” he said on a conference call Wednesday with other small businesses and Amazon critics.

The complaint cites research suggesting that despite Amazon's restrictions, few sellers defected to other online stores such as EBay Inc. or Walmart Inc., preferring to play by the Seattle-based company's changing rules rather than risk running afoul of their main benefactor.

The unions are also taking aim at Amazon's growing power over workers. After bringing on 175,000 employees in its logistics network, the company employed roughly one in three workers in the warehousing sector in the U.S., according to the complaint. A dominant position in many local logistics markets gives Amazon employees less ability to speak up about workplace concerns, especially those related to Covid-19, the unions say.

Bezos is scheduled to testify on Monday before a House of Representatives panel, alongside the top executives of Apple Inc., Alphabet Inc. and Facebook Inc. It will be Bezos's first appearance before Congress.

By Matt Day