Big Technology Podcast - Amazon vs. Regulators vs. Walmart

Episode Date: June 30, 2023

Jason Del Rey is the author of Winner Sells All Amazon, Walmart, and the Battle for Our Wallets. Matt Stoller is the director of research at the American Economic Liberties Project, and writes the Big newsletter on Substack. Ranjan Roy is the author of Margins. The three guests come together with host Alex Kantrowitz for an in-depth discussion about Amazon's challenges from government regulators and Walmart, and whether government action against the company could have an impact. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [e-mail]

Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed, a nuanced format. We have a packed show for you today in a packed week of news. Amazon, well, it's in the sites of the FTC. The big one might be coming for the company. It's also right now under threat with another lawsuit from the Federal Trade Commission about its practices with Prime. First of all, Ron John Roy is here with us, as always, on Fridays. Welcome, Ron John. This is going to be a fun one.

We also have Jason Delray. He's the author of the brand new book, Winner Sells All Amazon, Walmart, and the Battle for Our Wallets. Welcome, Jason. Thanks for having me, guys. Thanks for being here. Matt Stoller is here. He's the director of research at the American Economic Liberties Project. And he also writes a great newsletter on Substack called Big.

Welcome, Matt. Thanks for having me. Thanks for being here. This is a dream panel. honestly, dream group of folks to talk about some massive, massive stories. So why don't we just start with the first one, which is that the big one, right? Which is how Bloomberg titled it, the big case against Amazon, that it seems like Lena Khan at the FTC has been rearing up ready to bring.

It looks like it's on its way. It might even be here before August. Matt, you are the one who's been following the antitrust stuff, you know, probably more than most in the world. What is going to happen? Oh, stop it, you. Oh, you. He wrote the book.

Yes, sir. What is the big one? So, right. So one way to think about what's happening is you have this person, Lena Con, at the Federal Trade Commission, who's just got it out for Amazon and wants to do something to rein in their power. And that's not the way that I see things. There are a series of arguments from a lot of different people in the economy and a series of legal actions to address what are basically, practices, unlawful practices that harm consumers and third party sellers and companies that produce goods and sell online and rival retailers and fundamentally communities in America.

And those unlawful business practices have to be distinguished from the awesome stuff that Amazon does as a new and innovative retailer. So there are a bunch of different antitrust suits from basically state attorneys, general and then private plaintiffs that talk essentially about Amazon Prime and some of the unlawful business practices around Amazon Prime that end up harming consumers in different ways. The FTC suit, which Bloomberg reported, so I don't, you know, we don't know if it's, if that's the extent of the suit, there might be stuff on cloud, there might not be there, the suit might look different.

But it looks like the FTC suit is going to be fairly similar to some of the other antitrust suits that have come out of Washington State. Washington, D.C., some private plaintiffs, and I believe in California. And what they essentially say is that Amazon Prime in order to finance two-day shipping, right, or same-day shipping, and keep prices lower than everywhere else, right? How do they do that? They're not magicians, right? They have some good logistics technology, but it doesn't make sense that you would be able to get a good or service from Amazon plus free shipping and not be able to find it anywhere else online for cheaper, how are they able to do that? Well, the answer is they say if you want to sell

through Amazon, right, if you want to sell particularly to prime members, and remember, there's 150 to 200 million prime members. So that basically means if you want to sell online, period, then you have to keep your prices elsewhere through other non-Amazon channels, including Walmart.com or other retail channels, including your own website, you can't sell for a cheaper price than is listed on Amazon to Prime members. And this pushes up prices everywhere in the economy. And so while to the consumer, it looks like Amazon Prime is the best deal, right? It's the cheapest price. That's only because Amazon has prohibited other firms who might be able to sell it cheaper or more efficiently or in through other

differentiated ways prohibits them from doing it. And that's the practice that these antitrust lawsuits have attacked. And it looks like that's the practice that the Federal Trade Commission is going to attack. There are a few other things. Jason, your book is all about competition between Amazon and Walmart. It's not like Amazon is competing against a lightweight here. I mean, you have Walmart, which is the biggest commerce company, you know, in the globe. Yep. So how, I mean, what do you think about these, these allegations? And if they're true, why hasn't Walmart been able to punch back? Yeah. So, I mean, I think just in recent years,

Walmart's finally been able to at least hold their own a little bit more. And they, you know, they have in the past, I outlined in the book some anecdotes about sort of a pricing war between the two companies where Walmart's going and squeezing, you know, competitive. sorry, squeezing brands that are selling on Amazon and vice versa because of Amazon's algorithm driving down the price. And so there's been, you know, in recent years, Walmart's gotten their act together a little bit. But the history of how Amazon got ahead of Walmart, you know, who many thought would never be, you know, upended, you know, has a couple of different reasons for it. So one is, you know, you could make the argument as some do that, you know, government

was a sweep at the wheel for a long time in anti as it pertains to antitrust amazon also had you know the tax advantage online for many years where they were not collecting sales tax from customers and so not charging sales tax which which some argued uh you know was just an inherent pricing advantage um but really prime was you know the key piece of the amazon machine or what they would call the flywheel for many, many, many years. And so if you attack Prime, as FTC did in the lawsuit in the past week, and in some ways, it seems like Will, in the antitrust suit, you know, a whole lot could change about Amazon's advantages.

Well, on this, because Matt, you'd mentioned the price goes up elsewhere in the economy. Like, how do we differentiate Prime from a consumer standpoint? obviously people generally seem to love it you get your video you get two-day shipping you get everything so how does the case layout how this actually negatively affects the economy as a whole when every individual consumer seems to be pretty happy right so it's a great question so first of all the the suit that Jason's referring to that the FTC filed a week ago is about how it's like really hard to unsubscribe from prime and it's a consumer

deception claim if they say it's it Amazon sort of tricks people into signing up for Prime in certain ways. And then they make it, it's like, I don't know, six clicks and lots of different screens to, like, unsubscribe. So, and I think that that the point, and there are internal discussions at Amazon about, they call it, I think, the unsubscribing process project Iliad after. It's a homeric odyssey to try. Yeah, yeah, yeah, yeah. That was incredible. It was, it's kind of hilarious.

But it should, I think it shows the important. of what Jason was saying. Prime is really important to Amazon to the point where I think the FTC would claim they're deceiving users into canceling it. So I think now that you may not agree with that, but I think that the premise that people really like it is kind of undercut by the fact that Amazon makes it really hard to quit.

So clearly people are canceling and they are trying to prevent people from canceling. But I think your broad point that people really like Prime is true. But the reason that they really are, really like it is because they never see any alternatives because people, rivals have, except for, you know, Amazon, except for Walmart, which has massive amounts of capital. No one, you know, no one else really can, is legally allowed. I think based on Amazon's practices to actually give a better, a better price or better service, right? It's like if I have a widget

and I'm selling it on Amazon and it's say it costs $6 for me, you know, the price and then it's $4 for me to use Amazon's fulfillment business to make sure that the shipping conforms to prime standards, right? I can't break that out to customers and say it's $6 for the product and then $4 for all of the fees that I have to pay to Amazon. I just say it's $10. And then everywhere else in the economy, maybe not in like retail stores, but everywhere else online, it's going to be. be at least $10. I could if Amazon, and then if I say, oh, it's actually $6 here plus, you know, $4 shipping or if you want to get it for a little bit later, a dollar shipping or something, if I do that, then Amazon will not make that product accessible to prime members.

And so my business will get wiped out. And that's called a, they used to do that in contract. It was called a price parity agreement. Then the Senate wrote them and said, this looks illegal. And Amazon said, oh, we're not going to do that anymore. And now they just do it through algorithm. And so I think the reason that consumers love Prime and see it as a great service is that they don't know that they're getting a worse price. And instead, like Amazon takes that $4, which is not just shipping, but also just about $150 billion of extra cash for Amazon. And they pump it into all of these services like music and movies and games and all of these things that nobody. somebody's actually trying to pay for themselves, and they just get this stuff that looks free,

but in fact, it's not free. People are paying for it. They just don't know they're paying for it. It is interesting the way that the FTC is approaching this stuff. So last week, so we've talked a little bit about how hard it is to cancel Prime. And last week, I was like, all right, let me give this a shot. And I went and tried to cancel Prime, and it took me less than a minute. And when I tweeted about that, I'm like, what am I missing? Jason pointed out that they had actually made some changes, right? And they had done this in response to some of the action that they're getting from government, whether it's in Europe or in the U.S. And, you know, it is interesting. I think the main question about the FTC now is the unwillingness to compromise that they have with these companies or the unwillingness to let them

fix the problems and the desire to go ahead and sue no matter what. So this is coming from Bloomberg where it talks about the compromises that Europe's made. And the story says, well, Amazon could make a similar offer to the U.S. market kind of signaled opposition to such compromises, telling a Senate committee last year that the FTC was strongly disfavor such remedies. So, Jason, you know, I'm curious because, again, like, you're looking at this from the competition element, you know, on your, you know, in your book. I'm curious, why do you think the FTC is so strongly in opposition to the companies taking moves to, like, quote-unquote, you know, self-regulate?

And how do the companies feel inside? I mean, you cover Walmart and Amazon in your book, right? These are the two companies that have like some of the most government scrutiny on them. They're probably used to this type of stuff, but it does feel like there's a different regime, right? And regulatory regime in place. So how are they handling? I mean, I think Matt also would have some interesting insights on this. But my sense is we've gone decades with no action, right?

And so to now put it in. the hands of these companies and trust that they will self-regulate, I mean, just seems like beyond wishful thinking, just very naive. And I think- But isn't there a point where like it's not self-regulation, but it's bring the action, see how they respond and then decide whether you're satisfied with that response or not? Yeah. I mean, I think it's, I think I think some of it or a lot of it might also be about the optics and sending a message and we are here and we're not going away. I don't know what Matt thinks about that idea, but you're talking, Alex, essentially, just to make sure I'm understanding, like, why not just settle like the FTC has with smaller

companies with, you know, similar practices versus, you know, filing the suit? Well, let's go back to that example I gave about the prime cancellation, right? Obviously, prime is a lot easier to cancel now than it was previously, yet the FTC is still bringing that suit. So I'm curious, you know, is it like more like, don't keep doing this or we're going to punish you or like what is the purpose in that in that moment yeah yeah so i i wouldn't okay so first of all i think it's a you know i'm not totally sure that you might have had a an easier experience canceling prime that's not necessarily true for everyone amazon's very complicated and there's lots of of you know they can personalize experience i could have had yeah the tech

reporter flow who knows right um but i think there's a there's a couple important points in your story. First of all, Amazon changed their process because of legal pressure, right? Which is something that we see in general. They've also changed some of the ways that they handle third party sellers in response to potential legal pressure on from the FTC on this antitrust suit. They've reopened seller fulfillment and other antitrust suits. So you're already seeing legal pressure work. But one of the things to understand about Amazon is that it has engaged in extremely bad faith for a long time vis-a-vis regulators and pressure. So in 2018, Senator Richard Blumenthal wrote the Amazon

and said, you have these price parity agreements. This seems problematic. It seems like you're raising prices on consumers. And Amazon said, oh, yeah, yeah, okay, we'll get rid of them. And they just lied like they didn't, right? And you might think it's not a big deal to lie to the Senate. But No, I do not think that. Do you think that, Alex? No, no. I would not recommend that to anybody listening. I was being passive aggressive.

That's the way you do. Wait, but actually, Matt, on that, you mentioned that they got rid of the, they said they're getting rid of price parity agreements, but then they kind of hit it within an algorithmic function. Like they tried to use an algorithm as a cover. How do they get away with that? Or how does an algorithm provide you cover from like a specific contractual agreement or does it? And that's just the way.

It doesn't. You have to bring a lawsuit, right? I mean, that's the thing is it's like they, you know, if they just say, oh, well, we're not going to force you to, you know, give us the best price with a contract, but we're just not going to let you sell on prime through the buy box if you do, right? And we're just going to hide it in an algorithm. That's the same thing functionally. It's just there's no document saying it necessarily. So that, you know, it just requires more investigation and evidence. So the other thing about Amazon, if you read the complaint on Prime, the subscription service one, it's pretty clear that Amazon repeatedly refused to honor document requests, lied about document requests, lied about their internal processes, and effectively the reason the FTC was able to keep the case going is because Business Insider got a leak about how hard it was to cancel Prime. And then the FTC was like, they have been asking Amazon for document. You're legally compelled to give documents to the FTC. And Amazon just wouldn't. And then they lie. They're like, oh, there's nothing here. Then it came out that Business Insider, like, yeah, there are lots of documents.

And so it's like, this is a great service and lots of consumers use it. But it's also like an almost an organized crime racket, right? Like you can't lie to the government repeatedly without consequence. And so what the FTC is probably seeking with the prime suit is not just some sort of remedies here beyond what they've already done, but also a cease and desist order, like an order that's set from a court that says you can't do this anymore. Because the thing is that if you compromise with these firms and you say like a bad faith actor, like if it's a, you know, I think they they compromise with Epic Games, right? And Epic Games said, oh yeah, we're not going to do like deceptive user interface anymore. And that's because Epic Games, you know, was willing to change their practices or lots of smaller firms for firms that just operate in good faith, give documents, most firms do that.

Amazon doesn't. They hire a bunch of people from the FTC and they go to work. They fund the Chamber of Commerce in, and in D.C. to like basically get attacks on Lena. I mean, they're just trying to destroy the government. Like, that's what's really going on here. So they engage in this bad faith and what the FTC has seeking. is a cease and desist order so that if Amazon violates that cease and desist order, there are real teeth that say the FTC has authority to really make changes to your business

if you do not actually stop deceiving consumers. And with a potential compromise with a firm like that, if Amazon just says, oh, we won't do it anymore, we've already seen that they're willing to just like not do what they said they were going to do. So I think there's like a pretty good reason. I think it's a lot of what Jason said. It's like there's been a hands-up policy for a really long time. And these companies, the big ones, look at the law as a kind of suggestion, set of suggestions, rather than actually something to pay. And smaller firms don't, don't do that. They pay attention to law and try to obey it. It's so it's like Amazon and a few of the big ones that don't. That clarifies things for me for sure.

Jason, like you have some very interesting stuff in your book that talks a little bit about Amazon's strategy at fighting the government. I mean, it's very fascinating so for instance you know they will fight and try to dunk on politicians on twitter so i'm just kind of curious like you know didn't go well what what is going through the the company's head in terms of this stuff and you know do they have i mean what matt is saying is pretty pretty damning so do they have any like what would be their argument against that yeah so i mean there are a couple of a couple of things that play here in recent years one is there is There is, I mean, and executives who are fans of the company would tell me this, not just critics of the company, that at the very highest level of the company, there is a complete bubble around the leadership team in a way where, and I think part of it is how long they've been at the company, that they really believe they are just a force for good.

and like cannot accept really any valid criticisms without attacking it as conspiratorial or you know something along those lines and you know a lot of that came from Jeff Bezos himself and the group of you know mostly men he's had around him over the course of the company's history and so you're referencing you know tweeting at you know snarky or adversarial comments at senators I think and and also Congress you know, that was back in, I'm forgetting all my years are running together, but in the last couple years, like that was, as I reported back then, and then I think the Wall Street Journal added to my reporting, that was like Bezos being pissed that they were getting attacked

too much. And he, you know, he thought in an unfair way. And so I think the journal in there reporting he and the former head of public relations, Jay Carney, former Obama spokesman, They, like, were crafting tweets themselves. I mean, it sounds ludicrous, and it is ludicrous. But, you know, so there's this, there's, there's, like, feeling that we are still, we, we are this young innovative company and, like, we're a force for good. And, like, these are all haters. Like, that's, that's part of it. Another thing is, you know, they've long, they've always been combative with critics.

And I think there were some really smart folks internally who had experience in D.C. who were trying to force them into sort of a different path, not a path of like being walkovers when you think the government's wrong, but just, you know, not being sort of arrogant. And many of those folks, you know, either got pushed out or chose to leave because Amazon didn't seem to be learning any lessons from, you know, even a player like Walmart, which, you know, decade or two ago would at least pretend to listen to critics and, you know,

sort of go on a listening tour. Whether that was totally self-serving or not, you know, sort of beside the point. But anyway, so that those are somewhere, that's some of, you know, the reporting I uncovered, you know, while writing the book. And, yeah, it doesn't seem like all that much has changed under Andy Jassy as CEO. Again, he's been at the company a really long time. But they, I think they made more enemies than they needed to in D.C. over the last couple of years with their approach. Can I just give like a quick anecdote to kind of confirm what Jason is saying?

Absolutely. Because I think a lot of this is just so two things. So they bought MGM, right? And then they like wrote down a lot of the value because it was a stupid acquisition. And it's just like that's just a bad business decision that they made and no one's going to be held accountable for it internally. And that's the symptom of a giant bureaucracy that's just kind of a little bit out of touch. But the other one, and I think this is the kind of thing that really upsets people.

And there's no defense to it is there's a chemical called sodium nitrite, which is teenagers, it's like really useful if you want to commit suicide, right? And so there was this trend where teenagers would go on Amazon and they would buy it if they wanted to kill themselves. And then Amazon's algorithm was like, hey, people who bought this also bought like this guidebook on how to kill yourself and like all of these different tools. And it was just like them, just horrible. And so there's a plaintiff's lawyer who, said to, you know, representing some of these families of kids who bought this and killed themselves, like that went to different online retailers and said, would you please stop selling sodium nitrite? And all of them did except Amazon. And they were just like, it's our right to sell sodium nitrite. And they fought it legally. And they're still fighting like a lawsuit. Now there are like state proposed laws saying, you know, you can't sell sodium nitrite unless, you know, unless you're selling into a business. And it's like, why are you doing that? Like, that's crazy, you know, to, you know, and, you know, economies of scale work until they become dis-economies of scale.

Like, it's not a good thing that it's really easy to, like, get yourself a package of stuff that makes it easy for kids to kill themselves. So that's, like, the kind of thing. And there are, like, a lot of examples of that. And so that's the kind of thing that makes, that indicates that there's like a little bit of an out-of-touch vibe at the top of Amazon, but also it's going to really upset people, you know, across the aisle. Well, when you're obviously hearing terrible things like that make it seem like how come more people don't know about it and are aware of, you know, have a negative view of Amazon versus I get all my stuff in two days. How do you think the FTC is playing out their strategy in terms of kind of like combating the optics of Amazon is the greatest way to shop online? Already, the way you laid it out is kind of interesting to me. It's like starting with the subscription FTC suit and basically making it clear that no, not everyone loves prom.

and it actually is difficult to cancel and starting there then going for the big one seems to be kind of strategic in that way but but again like i hear that you know amazon is crushing its suppliers or you know putting owners terms on them so i can get you know some giant package in 24 hours still doesn't necessarily turn me off like like how does lena con battle that whole perception yeah i mean i think so you have to look at it in the broader context and i'm not just saying that because that's an easy way to dodge a question when you say something like that. It is, though. It's really about the broad context here.

Yeah. Let's take a step back. Let's take a step back and talk about something different. The real issue is. Okay, we're going to stop, guys. All right. There is a monopoly crisis in America writ large, okay? And I think that's like where Lena Kahn comes out of and also Jonathan Cantor at the antitrust division and a lot of politicians at a state and local level and at a federal level and Joe Biden, right?

He just gave a speech on this last week. You know, there's consolidation everywhere and it's driving down wages. It's driving up costs in all sorts of areas like pharmaceuticals. I don't know if you've noticed. Those are not cheap. And there's also all sorts of shortages. And that's because you have similar dynamics within the pharmaceutical supply chain as you do with Amazon. And you can see it.

I do a lot of, like, writing about different monopolies. There's monopolies in everything from mail sorting software to cheerleading to, you know, you see an oligopoly in airlines right now, like United is a disaster. So there's a broader dynamic here, like too big to fail in 2008, 9, 10 is actually something that is a problem across the economy. I mean, not even dimension banking. So, like, it's really easy to, like, say, oh, Lina Khan is crazy and focus on her. and there's a lot of attempts to sort of personalize this. But the truth is Americans writ

brought like writ large are upset with two with big companies because they are causing a lot of problems. And we saw that very clearly during the financial crisis, but we keep seeing those problems over and over and over and over. And Amazon is a little bit of a pace setter here for these kinds of exploitation of loopholes, for example, like the tax sales tax, which is where Amazon got its start with that advantage. Predatory pricing selling below cost, which we've seen, Uber and Lyft do and destroy taxi markets everywhere. The tactics that Amazon has pursued really define the modern economy. And so this case, whatever comes is really important, not just for Amazon, but for this broader, broader monopoly power crisis. Okay, so with that in mind,

like, how do you make the case about a product and service that consumers broadly like? I mean, I think the answer is you can disaggregate the idea of flight, right, this great technology from the business practice of a baggage fee, right? People can understand those two things. I like to be able to fly places. That's amazing. I don't like getting nickel and dined. And so I think that's kind of the core messaging challenge from the FTC.

like this is not anti-Amazon, this is about specific unlawful practices that cause problems for rivals who are trying to compete in a fair market. And there are at this point hundreds of thousands of people who have the experience of trying to use the Amazon marketplace, maybe millions at this point, who understand at a core level that there's something rigged and unfair about what Amazon is doing. And I also think broadly speaking, while people do love Amazon, they also know that there's something dangerous about having a firm that is so big and so powerful and essentially unregulated. So that I think there's a messaging challenge here, but I would move it a little bit away

from the personalization here of Lena Kahn and sort of recognize that there's a broader dynamic. She's obviously a leader in this, but she's also a product of this broader dissatisfaction that we see with big business in general. Yeah, and another thing people really don't like is just like the revolving door between the, you mentioned, Matt, for instance, that Amazon has hired a bunch of people from the FTC. I mean, ex-FTC employees and lawyers are all over big tech right now, and the conflicts of interest go even deeper. So this is actually a story, this story just broke as we were about to go on air today, but this is meta, but I think it's relevant to sort of what we're talking about, where L'Oréal Panky, who's the FTC's designated agency ethics official, asked Lena Con to. recuse herself from the meta case. But she did that while owning between $15,000 and $50,000 in

meta stock. And I think people just do see this failure of institutions in some ways. And they see like the revolving door and this type of stuff. And they start to question like whether the government can be effective in this area. So I am curious, Jason, let's go to you. Like, do you think that we're talking a lot about FTC? Do you think the FTC or regulators in general really can cause? can win these suits and can cause real change inside an Amazon or Walmart for that matter. I mean, listen, I was going to add one other point, which is just you were asking about like, I think you were kind of asking like if consumers love this service or this company, like how do you how do you make this government, how do you make a case against them in the sort

of public sphere? So I've, you know, my book came out about 10 days ago. I've been doing some local book chats, you know, one in my town at my library. I've done bookstores and something came out related to my book, which was like, you know, people who read the book said, wait, so like if Walmart can't compete against, like I love Amazon, but if Walmart can't really compete against Amazon, like, and I also hate Walmart, but like what, like, what gives like? And so you see, I think if people do a little digging, like they do, they can love a service and still, I think as Matt was saying, be concerned about, you know, the power or how this is possible

that this company upended this, what we thought was the unbeatable retailer. And so I don't know that that'll change consumer shopping habits. But I think, I think there is a way to get through, you know, walk this line. Can the, so, and sorry, Alex, so your question was can, can the FTC be successful? Is that essentially? Yes. I think if you believe, if you believe there's something really wrong and unlawful, you have to try. I think that's what we're seeing. And, you know, if you look to Europe, I'd be curious Matt's thoughts on this too. You know, some of the changes Amazon has been forced to make to its business practices just in the last, I don't know if it's been six months or a year since some action.

in Europe, you know, you have to think FTC has a shot here. Now, you know, the obvious question is how long does this take and what happens in the interim, right? And so that's that's the big unknown for me is beyond whether this administration lasts, you know, beyond the next election, you know, what happens in a really dragged out lawsuit? And so I'm sure Matt's thought about it. I'm curious if either or if you, you know, Ron John or Alex have, but I, you know, do you, can you win a five, seven year battle? You don't know unless you try, but that's sort of the big thing on my mind. And maybe I shouldn't be looking ahead that far, but I, but I can't help. Well, I think like look at Facebook and Giffy, you know, it's not a huge transaction that got

blocked, caused a lot of pain for Facebook. And Facebook is no longer acquisitive. They know longer, you know, have their entire strategy is just buy up whoever's a threat. So even these smaller things do seem to work. But I would be curious, because I get this a lot where, you know, like from friends, what is, why has the FTC and Lina Khan already not put a stop to big tech, big tech valuations are up? God knows how much this year it looks like power is getting concentrated again. Like, are we headed in the right direction regarding antitrust to Matt? There's so many questions. And you're forcing me to express my contempt for Europeans.

Oh, God. Oh, God. The French hate you doing that. No, it's particularly the antitrust enforcer Margaret Festager, who is a lot more bark than bite. And I have a very specialized contempt for Europeans. No, no, lay out your bark. Well, they're just, you know, she just. She's just been saying, oh, we're dealing with big tech in Europe and we, the American, you know, back in the mid-2000s, and we're fighting Google and like they made zero change in the market structure of Google and Facebook in Europe because it's like they don't actually want to enforce anything real.

I don't I haven't looked exactly at what's going on them as I think it's probably a little bit better there but I'm not I just don't think that they're serious about the laws that you know the GDPR didn't matter like they're just I don't think Europeans are particularly serious about addressing market power questions they just want to pretend like they are so that said I mean is the FTC successful you know you you noted that now you can unsubscribe from prime in very quickly right which is a result of regulatory pressure from europe and oh you're from you're talking about europe i think well europe probably helped push that forward but no you're right i think the regulatory stuff does does cause that those changes but that goes back kind of to my self-regulation question of like is that the best possible outcome we're going to get like this is well it was actually norway that actually pushed amazon almost the strongest of anyone to do to do the changes to prime So in the FTC complaint in the U.S., because Amazon can change their practices in Norway and not in the U.S. And they do that.

Companies do that all the time. In the FTC complaint, they mentioned how in response to the investigation, Amazon changed prime practices. Okay. So it is, you know, I don't know if you call that success, but it's like that is success in my book. Absolutely. And they've also, they also, one of the sort of keep the linchpins of the argument from antitrust enforcers is that, you have to use Amazon's fulfillment service to get into, to get your products prime eligible. And I think Amazon, a couple weeks ago, announced that they're going to allow sellers to be prime eligible.

Even if they sign up for something called seller fulfilled prime, which means you don't have to use their logistics. You just have to guarantee that it's two-day shipping and other things. I mean, who knows whether that's true, but that's clearly a response to pressure from antitrust enforcers. And you can generally see that across the board. Like there's an expression in antitrust, among antitrust nerds that says the trial is the remedy. So businesses change their behavior in response to regulatory pressure, in response to public exposure on trials, even if the government, you know, regardless of whether government wins or not or not. So a good example back in the 60s was IBM was bundling its software with its hardware. And so no one was buying software because it was like, oh, you just buy the IBM 360 and you get this machine that works.

And then there was an antitrust suit. And IBM, one of the things they did is they unbundled their software and hardware and all of a sudden now there's a commercial software industry. And that was a response to an antitrust suit. That suit ended up getting dropped in 1982 with no remedy, right? But there was an immensely successful suit, even though the government eventually dropped it. A lot of things happened in that suit to create the modern technology industry.

So, yeah, I think these things really do matter. Right. I forgot the last point about like the broader. Oh, is Lena Kahn successful? I mean, I think you got to look to other things, not just Amazon. I mean, big tech is very important. But if you look at mergers and acquisitions this year, they're down pretty substantially, not just the raw number, but the types of acquisitions are changing pretty dramatically and across the board on lots of different industries. And partly that's a funding issue. Partly that's, you know, interest rates are higher. it's harder to get, you know, the levered loans you would need to buy other companies. But partly that's because of stronger antitrust challenges to mergers in everything from the pharmaceutical sector to, you know, big tech. It's just, you know, if your merger is going to be not maybe six months, but it's going to be 18 months and it's going to be like you're going to have to spend a lot of money on legal fees and, you know, it could potentially get blocked.

And, you know, the CEO is often. held accountable when a merger doesn't go through so penguin um tried to buy random house that merger was blocked and the CEO of penguin had to resign and then alumina tried to buy grail that merger got blocked the CEO of alumina had to resign right so these are this is like a big deal and so even just the prospect of a case um changes behavior and you're seeing just a lot less m&A and i think that's a big success you've also seen reduction in list prices for insulin which i think is a big deal there's a lot of that are happening in the economy that are linked to antitrust, but just like your your experience with Amazon Prime being easier to unsubscribe, they don't necessarily link it to official to what

policymakers are doing, but it is a result of what policy makers. Yeah, and that's kind of, that was what I was curious about. It's like, is this pressure can actually push these companies? Jason, one more question for you about competition. So it's kind of interesting how you talked about how people are like, and I guess that's one of your conclusions is that Walmart's really struggled to compete against Amazon. So can you just take us into the same? state of that competition. I mean, obviously the pandemic helped Walmart accelerate its digital offering in a way that, you know, it took it took it a while to do. And then like, can't Walmart use some of its competitive power to like go to suppliers, for instance, and say, you don't have

to listen to this bullying by Amazon and we'll give you the better deal. Yeah, so two questions there. So state of the battle. I mean, Walmart, to be clear, some of Walmart, to compete, not all, but some was was internally created, right? I mean, just disputes between store teams and e-commerce teams and leaders and profitability versus growth and, which all does kind of go back to, though, from day one Amazon on Wall Street, you know, they, Jeff Bezos and his then CFO told investors, we're going to focus on growth, not profits. And they, so they got this what some would call, you know, a hall pass for a really long time while Walmart was, was, you know, expected to turn profits, which most businesses are.

Anyway, so the current state is, you know, Walmart is, has poached a lot of Amazon folks. They are, we're forced during the pandemic to start utilizing their stores as pickup locations and, you know, many delivery centers. And, you know, they're at a point now where they are, you know, somewhat formidable competitor, but without, and they knew this, without getting people to leave prime for their now new service called Walmart. Plus, in the long run, many of their top executives believe they will lose large portions of their customer base to Amazon. You know, Walmart CEO internally, I reported my book, you know, told this board, made a presentation,

basically calling Amazon an existential threat to their business, which, again, is absurd when you look at the size, sounds absurd when you look at the size of Walmart. So, so current state is like they are sort of a clear number two. And, you know, are, are have, have fought back somewhat successful in the last couple of years. But market share numbers online are still, I don't know, six or seven times smaller than then Amazon. There was a second question in there, I believe, Alex, but I have trouble keeping track of more, numbers above one sometimes. One thing actually, I'm curious, like, if you have a view into the company with Amazon,

how do people feel about jacked Jeff Bezos in this whole, like I literally saw a headline yesterday that Lauren Sanchez, do you know, she landed a helicopter herself? She flew it and landed it on his $500 million super yacht, which is how TMZ put it. But like obviously having this kind of like villainous character in this whole Perceptual. Should we ask Jeff himself? Okay. So for listeners, Jason has the, uh, what Jason is holding. The Jeff Bezos action figure. Um, I did, I did not, um,

this where does one get one of those? You know, you have to know very, very special. No, no. Then, um, um, this was one of his, hold it up a little higher. Um, of his robots from some event. Um, no, I did not buy is sort of a fun gift from someone who was sent to it. I think, but it is a rare collectible. I was going to do a giveaway. I love how we've got into the collectible part of the show.

This is crucial that we need. I'm going to do a giveaway with my book, and you can do whatever you want with that action figure. But anyway, there was a question about jacked Jeff Bezos. And internally, how does that, how are people dealing with that? or thinking about that or like like i'm i'm more surprised that there's not some type of coordination on his image management given like the current regulatory pressure just obviously you don't want the founder and the face of the company even if he technically is not the CEO any longer

you know having his wife land a helicopter on your 500 million dollar super yacht doesn't look great yeah i mean there i mean someone mentioned like lack of self-awareness or out of touch touch. I mean, again, executives who, I mean, this goes back to the whole years ago, the, you know, his divorce and all the publicity around National Enquirer and the like. And it, and, you know, the team around him, you know, a lot of people would tell me and other, some other people journalists that, like, we don't, we thought we knew this guy, but we, we don't know who this guy is. And yeah, I mean, a lot of people really pissed at the company that he's been, uh, distraction and if not worse than a distraction that, you know, the publicity around not only his

wealth, but his extracurricular activities have, you know, only hurt the company, if anything. And because, you know, he gets more attention for this and there's just overall more attention, attention on the company. And, you know, smart people would say they, Amazon could do without a little, a little extra scrutiny these days. And so. So I would say, well, some just look at it as kind of a joke or like good for him, like just having, living his best life. I think folks who are, you know, in roles of power inside that company have largely not been thrilled.

But not many, despite, you know, what, you know, open debate at Amazon and all the, you know, the leadership principles, I'd say, you know, there are certain people that, um, sort of in a bubble and aren't challenged often. And not surprisingly, number one on that list is Jeff Bezos. Can I offer a political observation about the Jeff Bezos? So I just note, like, it resonated far beyond the company, obviously. And I think the reason is because people look at Bezos as a political figure, and they look at Amazon as a political institution.

It's not just a business, right? And what's happening, one way to understand a lot of the legal background, political background of what's to the current moment is as an attempt of the legal regime to catch up to that reality, that Amazon is essentially a public utility style core piece of social infrastructure. And yet you have this guy who's just running it. I mean, even if he isn't running it, he's running it, who seems to not, there's like a disjunction between the way he's living his life and the expectations that people have for somebody who owes the public something. Whether that's fair or not, I'll just say, I think that's one of the reasons why you have so

much interest, because he's not the first rich guy to do something outlandish. Don't you think he should, speaking of that, don't you think he should sell the Washington Post? Bezos. I mean, I would, yeah. Go ahead, Matt. I haven't thought that that hard about that, but it seems like you think he should, Alex. I mean, you look at the disclosure now. It's not just Jeff Bezos is the owner, but the person running it is part of Bezos's orbit as well.

Like there's a full paragraph in every Washington Post story about disclosures with links to Bezos. So I do think he should sell it. I mean, I'm not saying the journalists are like doing his bidding, but like come out. No, I mean, I would say the, I mean, former, former Amazon Beat reporter at Washington Post, Jay Green. I think he may, he, he, he's up there on the list of most hated journalists inside Amazon. So, um, he's no longer there, but, um, there's a, there's a soft power to it though. Okay, last, last, I think that's right. Yeah. Well, I also, why does he, I still don't quite understand what the goal is or what the end game is with it. Again, I think either you go for

world's richest man, playboy and just stick to that role and go all in, but like the, yeah, the Washington Post ownership, I still don't quite understand. There was a moment where I feel there was a story to be told about digitally transforming it, the way that, you know, bringing that Amazon energy. Yeah. You know, the other thing is he bought a giant house in D.C. and has throws like lavish sort of D.C. society parties and they did the Amazon, you know, they're building a huge thing in Northern Virginia right outside the Pentagon. Like he's, you know, he's a political

actor. Like the view of him as almost a politician is correct. right and so the washington post obviously he should sell it like that's outrageous like it's crazy but also this you know you're seeing something very scary in our country which is historically this has been different from the like monarchies of europe right i'm aristocracies of europe i really hate europe um and uh you should spend more time there's actually it's quite nice sounds like you're a little pro europe right i was actually born there they you know their commercial centers and their political centers are the same place right paris london those you know and now in here people thought when we were founding the country that's a threat it's too much concentration of power

so was never a commercial center there's a political center and it wasn't that nice because you don't want your politicians to to be you know to essentially recreate royal courts and what is happening for the first time and it's not just amazon um the top five defense contractors all have their headquarters in dc right amazon has a giant commercial operation in dc and you have What are the world's richest men making DC part of his home? That's a really, and owning the Washington Post, like this is a really scary concentration of political and economic power that we've never seen in America before.

And like that's the broader context here. Yeah. So let's just end on this. Jeff Bezos, Elon Musk, and Mark Zuckerberg in a steel cage. Who walks out alive? I thought we were going to do a wager. the over-under on how much Amazon spends on their, don't take our Amazon Prime campaign once the FTC suit drops.

You could do that, sure. On par with Facebook, we save small businesses, I think. Definitely on par with that. New York Times and the Journal are going to be happy with the app. I'm going to say what Jeff Bezos would probably say, which is he'd say the person who comes out alive is the person who delights consumers. That's right. Okay, us.

And then he will murder everyone. Us four, us four in a steel cage versus them three. Oh, man. Oof. I mean, as long as killer Tim Cook isn't on their side, I think we have a shot.

If someone says mean enough things, they may cry and give up. That's true. We'll lead with Matt. The journalists take. The book is, winner sells all Amazon, Walmart,

and the battle for our wallets. You've heard a preview of it here today, but it's a great book by Jason Delray available at all. Bookstores. Go check it out. And Matt Stoller, you can get his newsletter big on Substack. It's the big newsletter.com. You could also get Ron John Roy's Margins at Read Margins.com. Thank you so much, Matt, Jason, and Ron John for joining us. What a great edition. And we had a very nice, lively, live audience on LinkedIn, chiming in all throughout. So thanks to everybody you watch. We will see you next time on Big Technology podcast. Thanks so much for joining us.