From Michael Coren at Quartz on the history of competing with so many companies, as Amazon does:
Perhaps no other company in history has sold so many different products (354 million) while competing against so many other companies (hundreds). In the past, that power hasn’t lasted. Amazon is betting it will be different.
On how it’s worked in the past:
General Electric (GE) fell into this trap after World War II. As GE brought hundreds of industries under its roof, the company’s stock began to track US booms and busts. Today, analysts compare GE’s portfolio of business from jet engines to oil-field safety valves to an actively managed mutual fund—and one that doesn’t beat the market. Since the mid-1940s, the $181 billion conglomerate has barely outperformed the S&P 500. Almost all of its standout performance came during the 20-year tenure of CEO Jack Welch in the 1980s and 1990s–a management feat that hasn’t been repeated.
Amazon has a nearly unprecedented advantage and that may be damaging in the long-term:
Modern antitrust theory, rooted in the ideas of “consumer harm” from monopolists’ high prices, misses the threat posed by Amazon, Khan argues. The structural advantages Amazon wields over competitors gives its the ability to price products below cost and restrict access to customers. Over time, Amazon’s stranglehold on the market may degrade product quality, variety, and innovation, and enable exploitive pricing after competitors are eliminated.
While they don’t fit the classic definition of a monopoly, Amazon is aware trouble may lie ahead and is prepared:
The company’s lobbying budget ballooned to $11.4 million in 2016, a six-fold increase over 2011, reports the Washington Business Journal. Amazon now retains at least 77 lobbyists, two of them former heads of the Department of Justice Antitrust Division during the Obama and George W. Bush Administrations, brought on to help ensure the Whole Foods acquisition.
Maybe it’s different this time, or perhaps Amazon will someday be unseated by the likes of OpenBazaar or another blockchain enabled marketplace.