The Vergecast - How Amazon's dominance is more visible during a pandemic

Episode Date: April 28, 2020

Verge editor-in-chief Nilay Patel interviews co-director of the Institute for Local Self Reliance Stacy Mitchell about her critique of Amazon's power in America's marketplace. As Amazon becomes more essential infrastructure during the coronavirus pandemic, Nilay and Stacy discuss the increased visibility of Amazon's monopoly power and the way it treats its workers. Is it possible to regulate a company that people use and love so much? Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for the show comes from Retool. Too many companies run critical operations on duct taped spreadsheets, Slack workflows, and whatever else they could cobble together. Not because they want to, but because building internal tools means weeks of waiting on someone else's backlog. That's where Retool comes in. Build custom internal tools just by describing what you need. Prompts something like,

Build Me a Revenue Dashboard on our Salesforce data. And Retool actually builds it on your company's data, in your cloud with enterprise security built in. Go to retool.com slash Verchcast. We all need to retool how we build software. Hey everybody, it's Stanley from the Vergecast. On this week's interview episode, I talked to Stacey Mitchell. She's the co-director of the Institute for Local Self-Reliance.

That's a little think tank slash lobbying outfit that does a wide range of things, but Stacey mainly is a fierce critic of Amazon. Amazon right now in the middle of the pandemic, as you know, has become basically essential infrastructure. So many people are at home, shopping at home, relying on Amazon to get them everything from groceries to USB cables to toilet paper if Amazon can get it out in time. Stacey has long been in credit for Amazon.

She's been writing about the company for years. She was recently profiled in the New York Times as more energy and scrutiny of Amazon ramps up in the middle of this pandemic as people, politicians realize how powerful Amazon is as workers and warehouses are going on strike, as Amazon's response to all that scrutiny is a little spiky and weird. Stacey's having a moment. I wanted to talk to her for so long. We talk about the roots of monopoly power. We talk about how, if it's possible to regulate a company that people love so much, whether that's appropriate or a political non-starter. We really get into why Stacey thinks economic

concentration is a problem for democracy, small D democracy in America. It's a wide-ranging conversation. We cover all kinds of things. Stacey is really smart. I love this conversation. Check it out. Stacey Mitchell, you're the co-director of the Institute for Local Self-Reliance. Welcome to the Vergecast. It's great to be here. So you are, I would say, a noted critic of Amazon. You've been writing about the company for a few years now. You were also just profiled in New York Times. Give me the broad strokes of your big criticism of Amazon and how you came to be such a critic of Amazon. Yeah, I, you know, I started following Amazon many, many years ago, mainly because of the sales tax advantage that they had for a long time. And it just, at the time, struck me as so unfair that they were able to operate in many states without having to collect sales tax.

And they were up against, you know, companies that had to collect 6, 7, 8, 9%. And that was when I first started really noticing them. And over time, you know, watched them take advantage of public policy in various ways. as a kind of core strategy of the company has always been to get government favors that are not available to competitors. And something about that very much irked me. But my core critique, as I've spent the last few years really looking at Amazon much more closely, is that this is a company that has essentially structural power in the economy.

And that enables them to have a great deal of control over other companies, to be able to squeeze a lot of value from other businesses and individuals that they didn't necessarily earn. And really increasingly to kind of assume the role of the state, to assume certain kinds of powers that they exercise autocratically that really are about running the economy in ways that feel to me very much at odds with democracy. So that has, I think, come to the four, obviously we're recording this in the middle of the pandemic. I've run it home.

And Amazon's, like, centrality has really come, I think, to the forefront for a lot of people in surprising ways. One of our reporters, Casey Newton has said Jeff Bezos should give a weekly Amazon update the same as the governor's or the president is doing because we are also reliant on their logistics network, on their delivery systems that he just wants to know how they're doing. Has that shifted kind of your perception of the company? Is it strengthened it? Has it weakened it? Have you changed your mind at all? It's made everyone much more aware of how dependent we are on Amazon. I mean, they've really become this sort of essential company for a lot of people.

And while I think many people, myself included, are really grateful to be living in a time when there is e-commerce and home delivery for obvious reasons. There's a difference between that and Amazon's power. And I think, you know, being grateful for the technology and the convenience and sort of the nature of, the nature of, of our modern economy is certainly true, but it is also true that we are, I think many people are feeling much more dependent on Amazon, and I think that kind of dependence should make us deeply concerned. You know, increasingly we're seeing all of the retail world really collapse into this single pipeline. You know, the factories that make goods, the people who design goods, who write books and so on, they increasingly only have this one pathway to travel to market,

And that is, I think, fundamentally deeply concerning, if you believe in the idea of innovation and competition and open markets and so on. And so I think this has really accentuated a lot of the things that I've been saying for a long time about Amazon. So you obviously are the co-director of an organization called the Institute for Local Self-Reliance. What is the Institute for Local Self-Reliance? What does it do? What is your role in the ecosystem? Yeah, we are a national nonprofit research and avioreans.

I can see organizations. So we do research on the economy, on public policy. We're a staff of about 20 people spread across a few different offices. We focus on different areas of the economy. We've been around for over 45 years at this point. And we really, at our core, deeply concerned about concentrated power, concentrated economic power, and think that there's a lot to be said for an economic system that disperses power more widely and that democratizes. decision-making and gives more wealth and equality to more people. And to you, that looks like we would have just simply more e-commerce firms like Amazon, that it would be more local, it would be community-based.

What does the ideal vision look like for you? Yeah, I think in terms of the consumer goods economy in general, it means having lots of companies. So you have lots of different producers of goods, you know, some large but many small as well. that you have lots of different retailers and distributors and, you know, just there is an ecology in which there is a great deal of diversity, I think, is ultimately what we're going for. And that kind of diversity means that you have lots of different people who are able to participate. You have the wealth generated by economic activity, you know, ideally spread across the country in different neighborhoods, different communities, and so on. how that looks online, I think likely means, you know, in an ideal scenario that we have

multiple platforms that aggregate buyers and sellers, not just a single dominant one, but multiple platforms that do that. And where companies that want to sell direct to consumers have more ability to do that, that's a more open and competitive market. And I think that's, you know, it's different from where we are right now. And I think getting there will have, you know, in order to get to that vision, it means checking the kind of power that Amazon has. One place where I think a lot of folks are focused. I think you have pointed this out.

Certainly Congress, the House Judiciary Committee has looked into this, is Amazon Marketplace, which is where other people get to use Amazon storefront to sell their goods. It plays out in a million different ways. But winning the buy button on Amazon is a very fiercely competitive zone inside of a pretty strictly prescribed set of. rules from Amazon. Is a marketplace the heart of the issue, or is it that people instinctively go to Amazon and they don't think that maybe they should go to another retailer as well? Yeah, and those two things I think are interrelated. I mean, to me, the heart of the issue is that across all of Amazon's different businesses, it sets itself up as an intermediary. It plays the infrastructure role. So we see this with Marketplace. You know, if you want to reach consumers online,

because we've got more than half of all shoppers now start their shopping on Amazon. If you're not selling on Amazon's platform, then you're essentially giving up half the market. We have a similar situation with AWS, where they're about half the world's public cloud computing capacity. So if you develop software and apps and you want to reach that half of the market, then you have to have your applications available on AWS. We see this with Alexa being the eWS, being the interface increasingly between connected products and their customers. And so, you know, if you want to have appliances and devices that are linked to the internet and voice operated, Alexa

increasingly is the interface for that. You know, we see it in all of the new endeavors that Amazon is engaged in. I mean, if you look at what it's doing in the health care field, you know, what you begin to see the outlines of is a kind of a platform that connects insurers and hospitals and doctors and is the intermediary between all of those functions. We see this in their new technology around cashierless stores, where they're offering that technology now to other retailers, seemingly with the idea of becoming kind of the operating system for all of brick and mortar retail. So in all of these ways, Amazon is positioning itself as the infrastructure.

And of course, in each of these areas, it's not only providing the infrastructure, but it's also selling its own goods and services and software and so on on that infrastructure. And that inherently sets up a conflict of interest. You know, Amazon has a godlike view of what's happening on the marketplace, what's happening on AWS. They can pick off, you know, a fast-moving popular piece of software, for example, or a popular product and replicate it themselves. They can manipulate search results in various ways to favor products that, you know,

maybe are less relevant to a consumer search, but net them a bigger margin on that particular sale. So having this kind of godlike view, having this control over the infrastructure, being able to determine who gets seen and who doesn't get seen, means that Amazon has lots of different ways, many of them subtle and hard to see, to tilt competition in its own favor. And to me, that's really what the core of the issue is. That question of if you're the infrastructure, can you also make products? I think it's a super valid critique. but I've only ever really heard it applied to, you know, I would say like the accessory market. I think there was a famous case about a laptop stand that was doing really well on Amazon,

and then the Amazon Basics version came out like the next day, because they saw this popular laptop stand and they undercut them on price. I don't see it in a lot of other categories, right? Amazon has to know that, you know, Nike sells a lot of shoes on Amazon. You don't see them aggressively try to conquest those kinds of. of brands. Do you perceive a line? Do you perceive a place for Amazon is more aggressive or less aggressive when it comes to using these kinds of tactics? Yeah, in terms of the marketplace, you know, they have different ways of gaining power over suppliers. And my contention is that

Amazon's, you know, manufacturing of its own brands, and of course they now have thousands and thousands of products that they manufacture under different names, my feeling is that the reason that they do that, the goal isn't so much to one day make everything. The goal is that by making these products, they gain leverage and they can maximize the share of the sale that they get to get to take. So when they're negotiating with a supplier, for example, and I mean, this is very simplistic, but when they're negotiating with a supplier and they're able, the supplier says, you know, sorry, we're not going to sell to you.

We've got this great, you know, black dress that's the hot new thing and we're not going to sell it to you. And Amazon is able to say, you know what, guess what? We can make a dress that looks just like that. now the supplier is in a different position. And so you see them using different kinds of tactics to squeeze people. You know, in the case of shoes like Nike, it's very hard to successfully manufacture performance athletic wear.

So I can sort of see why that that's not something that they've gone into yet. You know, it's a tricky business to do right on, like, say, a laptop stand. But what we do see in that space is how they use counterfeits to gain leverage. And you think they're using the counterfeits. Yeah. I mean, it's hard for me to imagine as much as Amazon with a minute level of precision controls what goes on its platform, that it would allow its platform to be a wash in counterfeits if there wasn't some strategic advantage. And we've seen this play out with Birkenstock, with Nike and

visible ways, and I'm sure in ways that have not been reported with other companies, where they've said, you know, yeah, we know that our sites filled with knockoff Birkenstocks, and we're happy to clean that up for you, but you're going to sell to us on our terms. And so the chaos on the marketplace, I think, is a lot of the gives Amazon significant amount of leverage over suppliers. And that's why it exists. And I also think the Amazon brands, you know, again, in some cases, they like to have those because they might make margin, but it's also a way of gaining leverage. So let me, let me offer you the pushback here, because I think this critique is valid. It's been well thought out. It's certainly, we just interviewed David Cicelini from the House Judiciary Committee.

We've heard from other companies that have testified before Congress who said the second we showed up in the store, Amazon started calling and demanding different terms constantly. So I think I understand the shape of the critique. But let me offer you the pushback that we hear from Amazon and others, which is Amazon's ability to be the infrastructure, creates the opportunity for them to run the marketplace. But it actually expands the market for all kinds of other sellers. to reach consumers. Because Amazon exists, you can start all kinds of other businesses. You can start small stores and actually reach customers that you would never be able to reach otherwise because you don't have to build a store.

You don't have to build an e-commerce platform. You don't have to build ad targeting capabilities. You can just go on Amazon, find half of the market, as you said, and begin a business. Does that ring true to you? Yeah, I think that we have to be careful about separating out the technology. I mean, part of the challenge with e-commerce, is that Amazon is our only conception of how that works. And so we tend to conflate all of the advantages of e-commerce with Amazon.

And I think it's important to separate out the difference between those two things. You know, being able to sell online, being able to reach a wider market, all of the things you just said are entirely true. The question is, would we be better off if there was oversight, if Amazon, as an infrastructure operator, had to be neutral? had to have more less, you know, had to have more visibility into what it was doing, had to stick to rules of non-discrimination, the way that we've, you know, implemented in other parts of the economy that are also infrastructure, where they couldn't play sort of suppliers against

one another to their own advantage, but where the rules of the platform were neutral to all comers, and where they didn't have their own interest, where they, the part of Amazon that is a retailer and a manufacturer, for example, gets spun off and is separate from the platform, which of course is what we did with railroads, you know, back 100 and some years ago, wouldn't we all be better off? I mean, wouldn't the opportunities for small businesses to go out and compete, all of the things that you just said would be just as true, if not more so? I think the danger we face right now is not that we're going to give up all the advantages of e-commerce. The danger that we face is that one company is going to have such a stranglehold on that market that we're going to lose new innovations and new kinds

of companies that are going to come along and that won't be able to succeed because of Amazon's stranglehold. I think that's the real danger. So that danger, I'm sympathetic to the challenges with articulating that danger. That's also the danger. You know, the verge is very pro-net neutrality. That's the argument, right? New kinds of startups. Yeah. The platform should be neutral because you'll risk innovation somewhere else that you can't predict. The shape of that argument, I understand, particularly as it comes to broadband networks, but Amazon is a is a website. And it feels like with Amazon, with Google, with some of these consumer-facing web services, it is much harder to articulate that danger because what you're saying is someone else can't

show up with a website and compete. Do you find that no one else has tried to compete with Amazon head-on or when the Wal-Mart of the world do it, they fail for some mysterious reason. When the best buys of the world show up, they get run out of town. What prevents another giant company from competing with Amazon head-on in this way? What we saw in the 2000s, as Amazon was growing and other companies in some cases were as well online, was that Amazon used predatory pricing to remove them as competitors. So we saw this pretty famously with Zappos, for example, diapers.com, where they sold shoes and they sold diapers well below cost until they essentially put those companies to the red

and were able to buy them. So that was the strategy they used then. Now we see them buying lots of tiny companies that have innovations and then removing those innovations from the market so that other people don't have access to those technologies. Their competitors don't have access to those technologies. You know, I think, you know, a world in which it's Walmart and Amazon and maybe eBay, you know, a world in which we picture something like that, I'm not sure that that's a world, you know, absent really good public oversight that is any better for particularly small and mid-sized companies that have new ideas. You know, one of the things, it's not just that someone can't come along and succeed in creating another e-commerce platform, which I think is just an

incredible uphill. I mean, if, you know, if Walmart has struggled as much as they have with all the resources that they have, like, you know, someone's just going to come out of nowhere and do that. That seems pretty far-fetched. But it's also, you know, because this is the interface for all of consumer goods, you know, just this vast, vast area of our economy, you know, one of the things that I like to do a lot of my research on Amazon has talked to, like, small and mid-sized manufacturers, you know, people who make performance footwear, for example, or toys or, you know, in these sort of inventive companies. And what they all consistently tell me is that it's incredibly difficult, if not impossible,

to actually introduce a new product on Amazon. You know, the way that they get, you know, someone who invents a new toy typically gets that toy to find an audience is that they're sold in a small brick and mortar toy stores. They build up a following. There's word of mouth, you know, and then maybe eventually they're sold in bigger toy chains and eventually they're on Amazon with, you know, placing in the search results such that someone would actually see them, right? And so if it's just an Amazon world, you know what these manufacturers say is, I have no idea how you introduce a new product in that and succeed unless you have just an enormous marketing budget unless you're a big company.

So again, it's like it's the whole diversity of the market that really that really worries me. Why do you think consumers keep choosing Amazon? I mean, there's the other pushback to this argument is the reason the Walmarts and the best buys and the targets all fail is because their websites aren't as good and people just keep picking. Amazon anyway. Yeah, yeah. And of course, it's reinforcing. You know, once you become a, I mean, it's super convenient. It's all the things that we know about Amazon. But once you become a prime member, your desire, you know, prime is such a psychological tool because your desire to maximize the value you get from that $129 you spent means that you want to default to getting more free shipping. And so, you know, there's lots of data on this. People who become prime members stop comparison shopping. And

as much. They tend to go to Amazon first and tend to just stay there. It's sort of the nature of how that works. So you start to have these kinds of effects that draw people in. And the more and more it becomes a mesh in our lives, you know, I think especially with Alexa, you know, it becomes the default option. It's the place that we all think of when we want to buy something online. And it's, you know, it's super, it's super easy. So that is the sort of the consumer's point of view. But in the end, you know, we're not just consumers. We're also people who need to earn a living, people who want to live in a vibrant economy where lots of different communities and businesses can succeed. You know, and ultimately, even as consumers, I think this is going to come back to haunt us if we

don't do something about it. So we do a survey. We wanted to do every year. We did it every 18 months. We did one 18 months ago, and we just did one in early March, which now feels like 500 years ago. And we asked people nationally representative sample, how do you feel about various brands? Amazon by far had the highest favorability rating. 91% favorable, 9% unfavorable, beating out Apple by a pretty significant margin. And beating out Twitter, I'll just give you the lowest ranked one was Twitter at 61% favorable. It's unsurprising. 39% of people in this sample didn't like Twitter.

But people love Amazon. So the thing you're asking for seems to be crystallizing in. We need to actually regulate some part of how Amazon operates to make it neutral, to make fair. That's a hard thing to do when people love Amazon, especially in the middle of a pandemic when people are relying on Amazon. Amazon has, I would say, with some bumps managed to weather the supply chain issues, how do you get traction to change something in Congress that people love right now? Yeah. I mean, I get a fair amount of email from people who write to me and say, I love Amazon, I shop there a lot. I think they have too much power and we need to regulate them. Like, I think people

it can entirely have hold all of those things in their minds at once because, you know, regulating them and having some neutrality and having some oversight in the service of the public interest doesn't mean that we're going to give up what we actually like about e-commerce. It does mean that we're going to create potentially a much more fair system, a system that's more open where there's more opportunities for companies to compete and so on. And in the long run, be better off, a more innovative economy. But I think Americans can easily hold both those things. They can both love what Amazon does and also be deeply frightened of the kind of power that this one company has.

I think the more people understand about how Amazon operates, the more they experience in their own lives, the sort of sense of dependence on this company. You know, as you said, in the midst of the pandemic, we've, you know, as you said at the top, we've got a company that's essentially engaging in decision making that seems. quasi-governmental, you know, which I think, you know, as people who live in a democracy, that's really questionable because, you know, nobody elected Jeff Bezos. And yet, you know, he runs this empire that has just incredible, you know, implications in terms of the decisions that he, that he makes. I feel like that's, there's like a flip side to that, right? Which is, yeah, but look at our government. It almost seems like it's harder to make the case against Jeff Bezos running Amazon as a ruthless profit-seeking machine. But at the same time,

figuring out how to get things to people, even while like the United States Postal Service is collapsing, next to particularly a federal government that seems beset by chaos, doesn't it seem like a lot of people are just going to pick Jeff Bezos? Like, there's a part of me that's like, I'd pick Jeff. Right. Right. Yeah. No, and I think you've absolutely, you've totally hit upon what the central sort of issue is or the central kind of opportunity. I think most Americans would agree that we have a government that's dysfunctional. We have a government that is is unable to address in any form the most critical and life-threatening problems that we face, whether it's climate change, whether it's incredible inequality, whether it's sort of the corruption

within our government itself, inability to address the coronavirus in an effective way. I mean, I think we are, most of us are very deeply frustrated by the failures of government. But what I would suggest is that there is a relationship between the breakdown of government and the rise of corporate power, that those two things are very much interlinked and that as corporations have gained sway and have had more influence over Congress, it means fewer of the policies that we all support,

the majorities of American support are actually getting through. It means more corruption. It means more government dysfunction because it's in sort of the interests of corporate corporations and the wealthy to have that kind of dysfunction in terms of being able to serve as actual needs. You know, there's, you know, I don't want to go too far with this, But, you know, there was, you know, in the lead up to Nazi Germany, there's like incredible concentrations of corporate power.

They're very much interrelated with this sort of rise of fascism. There's a way in which you allow corporations to have that much power and you have an increasingly unequal society in which people really don't feel like they have a voice over their lives that start to head us down this path of a disintegrating democracy. And so to me, the effort that I'm engaged in around how do we, we rest control over, you know, democratic control over Amazon is very much this sort of this apart and parcel with how is it that we regain the idea of government that actually structures the economy in ways that work for ordinary people. Do you think that the growing antitrust sentiment that we've been covering, that we've been talking about, do you think it's reaching an inflection point inside the pandemic?

And if so, is that, is the effort to think that the, there are companies that are too big, is that growing in vigor or is it kind of declining because there's another thing to worry about? I think in the midst of the pandemic, the kind of power that these companies have is more exposed than ever. I mean, obviously our whole lives, how we interact with what another, how we engage in commerce, has now sort of all collapsed onto the web and you have a handful of gatekeepers in that context, including Amazon. So I do think it's really underscored some of the arguments that I've been making that others have been making about how Amazon serves as a kind of essential infrastructure and what the

dangers are of allowing that infrastructure to be entirely privately controlled without regulation. I mean, if we don't have any oversight over Amazon, we're effectively allowing it to regulate our economy as a private entity to decide which products succeed and fail, which companies succeed and fail, which communities succeed and fail. I mean, is that really the kind of future that we want to have. I think that the other thing that the pandemic is really exposing quite profoundly is how vulnerable our society is because of inequality. I mean, we see this, you know, in the numbers of people who have very little cushion or slack in their lives to fall back on during the economic stresses. We see this in, you know, who is a frontline worker and who is not,

who is more in danger. Just every aspect of how both the public health crisis and the economic economic crisis is playing out is underscoring the risks of inequality. And I would argue Amazon is really a central driver of rising inequality across the economy. And also just, you know, it's very notable to me that we're having these stories about the dangers of highly concentrated supply lines. You know, and we're seeing all these stories about how much of our pork, for example, is produced in like these incredibly small number of slaughterhouses out in the world. West or how a lot of our drugs come from, you know, one set of factories in China. And so the idea that we're going to come out of this pandemic, having shrunk the distribution

system to an even smaller number of players, it seems to me like not at all a good idea. And I do think that we're seeing, to some degree, at least on the margins within Congress and in the public discussion, some people who are saying, wait a second, maybe we need to really think about economic policy differently. And in particular, maybe we really need to tackle the issue of monopoly power. You know, there's a sort of common refrain that I hear in a sort of tech leader Twitter world that I live in for better or worse. The tech giants are going to come out of this even more powerful. The people are going to realize, hey, you know, I don't need to like live in a city.

I can just stay home. And I'm using all these tools provided by big tech companies. And I can do my job just as effectively if you're a knowledge worker or some kind. that Google did a reasonably good job of delivering COVID-19 information and deleting disinformation from YouTube. Arguable, sure, you can make that argument. That Amazon is, you can just live somewhere, and Amazon will deliver stuff to you. There is a pretty reasonable set of arguments that tech giants come out of this.

Oh, not to mention Apple and Google are going to build a contact tracing system and put it on every phone. There's a reasonable argument that tech giants come out of this more powerful than before. do you think that's an inevitable outcome absent some government intervention, or is that still on the margin 50-50? It's very much a policy decision, I think. You know, how we, you know, structure the various bailouts and economic decisions that are made right now, how we decide to deal with different issues that we're seeing in terms of sort of the expansion of the power of these companies. that's what's going to shape the economy down the road. That's what's going to shape society down the road. These are policy decisions and we should recognize, you know, very much that they're in our hands. You know, I mean, in the CARES Act, for example, the big, you know, bailout bill, you know, we put it, we put something like over $4 trillion of cash available to the largest corporations and a much smaller amount of money available to small businesses and through a very rickety system that has now proven to be, you know, not really, great at delivering the aid that was put there and has been used by big companies and so on. They're just incredibly disparate way in which we decided to treat those two different sets of

companies. That's a policy decision. So, you know, I worry that we are doubling down on concentration, even at a moment when it seems so abundantly evident that that concentration has real consequences during a crisis, but, you know, all the time as well. these are policy decisions and yeah. Yeah, the reason I ask is before the pandemic hit, you know, I would talk to some members of Congress. Representative Cicillini was on the verge casting. He's like, we're going to have a bill out, a set of recommendations out soon. You see Josh Hawley, who's a Republican

center for Missouri. Josh Hawley hates Google with the truest of passions. And it seems very clear that he would be supportive of some effort to break up or limit or regulate Google in some way. So you had this bipartisan energy around regulating these big tech giants around saying, hey, maybe this kind of concentration of power, particularly as it comes to digital companies, is bad. The specifics of the policy proposals are all over the place. Elizabeth Warren, you know, I talked to her last year at South by Southwest, and she was proposing a plan much like yours, where if you run a marketplace, you cannot be a seller on that marketplace, which she would have imposed all the way to saying Apple could make its own apps on the app store, which seems like

the farthest point you could go with that rule. There was a lot of energy here. I'm just wondering if that, you see that energy coming to something tangible soon. And in particular, if you see that energy being as bipartisan as it somehow felt maybe five months ago. Yeah, I do. I mean, it's hard to, you know, we don't know how this election's going to play out. We don't know how the economic situation is going to play out. But I do think we're at this sort of heightened moment of people focusing in various ways on how we've structured our economy and what the consequences of it are. And so in that sense, it does seem like it's the kind of moment where people can do big things, right? You know, and this is true in every crisis. You know, if you go back to the, to the Great Depression,

it would have seemed impossible to someone in 1928 that several years later we were going to have Social Security, we were going to have labor law, we're going to have all the things that came out of the New Deal. Like it just would have seen like that can't possibly be the country that I'm living in. And likewise, you can see bad examples, or in my opinion, bad examples of how governments have handled crises in terms of the decisions that they made. I mean, we made a lot of bad decisions, I think, coming out of the financial crisis where we exacerbated inequality. We didn't take big Wall Street banks down to size. We, you know, ended up allowing millions of people to lose their homes and their assets. And I think there have been lots of ramifications of those decisions, both in our economy but also in our politics.

And so we're in another one of those moments right now where big things are possible and where the decisions that we make, right now are going to shape our society for years and maybe even decades to come. So I don't know how that's going to play out, but I think that there, you know, I think we would be, it would be a mistake to be complacent about that. I think it would be a mistake to sort of put on our kind of consumer hats, if you, you know, if you will and just decide that, okay, well, I like Google and I'm fine with that and they seem to have a better plan than Trump for contact tracing, you know? Like, I think that's pretty short-sighted. Yeah, they do, though. Oh, they do have a better, yeah, I mean, absolutely, this is true. But there's all sorts of surveillance issues. And it's like, are the choices really

only between letting Google run things and letting Trump run things? You know, like, are those really our only choices? It's like, is that what democracy I come down to? In which case, God, that's on us, you know? I mean, I know being a citizen is hard work. But, you know, at some point, what kind of country do we want to live in, what kind of country do you want to leave for our kids? And I, you know, I just think there's a lot of evidence that most of us are not happy with the one we have right now. Do you think this is like a particularly hard issue because it is like inherently digital? I feel like you brought up railroads earlier. And I, I just feel like it was easy to be like, look, standard oil owns the oil. They're buying the railroads. They're making it more expensive

for other oil producers to use the, like, you could just show people the thing. Whereas here, you have to be like, well, okay, the Amazon search results are algorithmically driven. Amazon's in control of the algorithm. They can price their own thing. By the way, this random brand is not just a random brand. Amazon made it. It's a subsidiary 15 LLCs deep, but they get preferential. Like, it's so much harder to just explain what is happening.

Do you think that it just made this conversation harder in some way? In some respects, I do. I mean, I think, yeah, it's a little more complicated than railroads. it also, you know, sort of, I mean, but that's like, railroads are really complicated. Right. Like, that's what I mean. Like, it's exponentially more complex than a very complex thing. Yeah.

It's true. You know, and some of it lives in algorithms, which are sort of hidden and mysterious to people and sort of how the power is actually exercised that way, what that, how that makes marketplace sellers behave, you know, it's certainly true. The fact that, you know, sort of Amazon's stickiness with consumers, you know, is this sort of how they've built up prime and sort of built built up these sort of self-reinforcing cycles. Yeah, it's definitely more complex, but it's not, you know, it's fundamentally quite similar. And, you know, we've, we've been here before. I mean, back in the day, you know, railroads,

you know, were probably the biggest sort of technological change. I mean, much bigger than the car in terms of how they reorganize the country and reorganize the economy. I mean, for the first time, we had like standardized time because of railroads, you know, before that, we really did. and all these really fundamental changes in how we operate it. You know, so that was a major technological change. It was easy at that time for people to look at it and confuse sort of the technology from the power, you know, which I think is one of the problems we, as I keep saying, that I think we face with Amazon. And yet we were able to see that for what it was and to put in a smart, you know, sort of a smart approach to how we dealt with that.

And I think we can, you know, draw on those older models, but also, you know, update them, you know, in mind to the particular circumstances that we face today. Can you think, are there other, I can't think of this. This might be a trick question. But can you think of any other consumer-facing monopolies like Amazon that the government has taken action on? Steel was not consumer-facing. Real roads are not consumer-facing.

AT&T to a certain extent, but AT&T was granted a government monopoly and given a universal service fund. There are a few, I cannot think of any company that, one, by being the thing people liked to the point where the government had to step in and say people like it too much? The A&P grocery chain would be a good example. You know, they, this huge, you know, sort of the Walmart of its day, though it was actually considerably smaller in groceries than Walmart's market share in groceries is right now. But they were the Walmart of its day back in the, you know, teens and 20s.

They were really growing a lot and had a lot of supply chain power. So they had a lot of power to rest concessions from. suppliers who would then end up having to charge competing grocery stores, you know, inflated prices to make up the discounts they had to give to A&P. So, you know, AMP sort of, it just sort of continued to snowball that way in terms of their of their market power. And in 1936, Congress passed a law that said, you know, if you're a big buyer, if you're a big retailer, you can't use your power to rest discounts that you don't deserve. Like you can get discounts based on volume that are legit based on real efficiencies.

But you can't just say, I'm super huge and I'm going to strong arm you into giving me a discount because there was a recognition that a big retailer could do that as a way of undermining smaller competitors who would have to pay higher prices. And, you know, that law and the sort of subsequent, you know, antitrust actions that the government engaged in against A&P, it's a longer story over a number of years. But the result was that A&P continued to be a grocery chain, you know, and operated for decades longer. but it stopped really being the kind of dominant chain that it was. It was no longer, it didn't have the same sort of market share. It was now in a mixed and more competitive economy as a result.

So that's one example that was, you know, popular and worked out pretty well for consumers. We didn't give up A&P, but we had a more open and more competitive grocery market. And there are lots of smaller ones like that. There are lots of examples like that from that period of like the 40s, 50s and 60s when antitrust was very robust. and was also proactive. And so instead of waiting until you got to the point where you had these big showdown cases with, you know, with U.S. Steel or with Microsoft or whatever, they were more like nipping things in the bud earlier on.

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You're part of a group called Athena that's supporting workers and warehouses. Tell me what Athena is and why Institute for Local Self-Reliance is a part of it. Athena is a coalition of about 50 organizations that represent workers and other kinds of labor groups, small businesses, community organizations. Essentially, it's a pretty broad base of constituents. And Athena's goal is really to have some sort of democratic oversight over Amazon. Really, the coalition believes that this company, no company should have the kind of power that Amazon has and that Amazon often operates outside the law or above the law, and that that should

change, that that's fundamentally undemocratic. And so, you know, especially in this moment, because Amazon warehouse workers are under lots of strain and exposed to, you know, to COVID-19 and in many cases not working with basic protections. This has been a really important moment for the coalition in terms of making sure those workers' voices are heard in the media and with policymakers. But the coalition is broader than that. It includes the organizations that fought against the subsidies for HQ2 in New York and in Washington, D.C., includes folks in cities where Amazon has expanded in different ways that have caused displacement. And it includes a growing contingent of small and mid-sized businesses who feel like they

don't have a fair chance to compete. Do you think the worker issue is growing in... It seems like Amazon is doing a very bad job of talking about its own workers. I mean, their lawyer was quoted saying one of their workers who was protesting was not articulate and they needed to walk it back. Like, their bluster in terms of how they talk about themselves, how they engage with groups like yours, how they engage with the press, how they engage with Congress. It seems like they know they're winning and they can just keep blustering. But if I had to say, their number one sort of weakness is that many of their own warehouse workers are extremely unhappy with Amazon.

And that's bleeding over to their white collar workers and engineering and finance and sales. Is the worker issue growing for you? Is that becoming more of a focus or is that next to sort of the antitrust issue? I think they're part of the same thing, actually, because, you know, Amazon employs directly or indirectly about one out of every four warehouse workers. So part of the reason it's able to treat people so poorly and have so, you know, doesn't really have to answer to its workers in any particular way is because it has an enormous market power in this labor market.

You know, if you're a low-wage worker, particularly if you're in places like New Jersey, the inland empire, you know, these hubs of warehouse activity, Amazon is the dominant employer. You're undoubtedly going to work for them at some point. They effectively set the going rage weight, and there is no alternative. So the worker issues are very much tied up in the monopoly issues. And part of the reason I think workers have, you know, working people have done so poorly over the last 30, 40 years. and we've seen such a decline in wages has to do with corporate concentration. And the fact that there is not competition for labor the way that there used to be and that those dominant corporations have outsized political power. And so they're able to reshape labor law in ways that undermine the ability of workers to push back. And so that's very much interconnected.

What's happening right now is we're seeing like wildcat strikes. We're seeing people who are self-organizing and walking out on their own. with no support from any kind of, you know, labor organizations at all. And for workers who, you know, Amazon warehouses have very high turnover. These are low-paid workers, many immigrants, we're in an economy where there are no other jobs. You know, people who are in really tenuous positions to be doing that, to be walking out, it's a really, I mean, it really underscores how upset they are about the conditions that they're being forced to work under.

And I think, you know, the statements that Amazon has been making, you know, it's just only sort of revealed this company that doesn't think they have to answer to anyone. You know, they just sort of operate in this world where, you know, they don't have any obligation to the people who work for them at all, apparently, in their minds. They don't have any obligation to the broader society in terms of, you know, addressing the public health impacts, you know, the potential public health risks inside their warehouses. I mean, they just seem to, it's a sort of hubris that I'm. I think really speaks to how they see themselves in the world and why a lot of us should have a problem with them. Do you think the unionization efforts that are sort of happening in warehouses sporadically, they're happening in Whole Foods sporadically, do you think those efforts will have a meaningful change on how Amazon operates? I think so, yeah. I mean, I think when you see, I think hearing

from workers helps more people understand the nature of Amazon and recognize some of the hidden costs of the way that this company operates and the kind of power it has. So that visibility is really important. And your warehouses traditionally have been very invisible. You know, I mean, Amazon, part of the reason it grew to be so powerful is because it operates kind of invisibly. I mean, we all knew about it, but of course, you know, the packages just sort of show up on our doorsteps magically. And in the last few years, we've gotten much more of a view into what goes on behind the scenes. And I think that that's really helpful for people understanding the company. And And then also, you know, everyone's reading and seeing how the company is responding to these

concerns, you know, and again, it's sort of underscoring the fact that this is a company that doesn't have to answer to anyone and really is operating, you know, by its own rules. And that, I think, is a problem. You know, when workers don't have any say, when businesses are, you know, sort of like serfs on the, you know, medieval serfs on the platform and kind of have to just, you know, they, they can, you know, farm their little plot, but like, there's no, they have no power. Amazon holds all the cards. You know, at some point you start to add this all up, and it, it becomes clear that this is a company that's not really serving our best interests, if left,

to continue to operate the way it is right now. What kind, when you see, when you hear from the workers, I get sort of mixed signals, right? The workers aren't happy about their conditions. They're very worried about the virus. Josh Sheza has done a bunch of reporting on our side about this stuff. But they're also saying, we know we're essential. We want to do this job. We just want to be taken care of. Is there a way forward from that position that strengthens that, because what you see is Amazon could make working conditions for its employees way better, particularly in warehouses.

It could save the United States Postal Service, right? Jeff Aces could just cut the USPS a check and save it. And they would actually gain more power, even if there's not more oversight. Is that an outcome that you see as likely? I think to address the issues that workers raise would require them actually seating a certain amount of power because the problem isn't just, you know, the particular issues around wage rates or this particular safety measure, lack of safety measure. It's really about how much of a voice on the job do you have. And to what degree do you feel like you have some agency in your day-to-day work life?

And what you hear over and over from Amazon workers is, I'm treated like a robot. You know, it's a dehumanizing experience. There's an incredible amount of turnover. It's a grueling situation. And, you know, I think the vision that Amazon really has is actually to have it all be mechanized as much as possible. And so this is not a company that ever seems to want to cede any bit of power. But that's what actually would be required to, you know, to actually have. acceptable working conditions for people is that they would need to have some sort of say over their,

over their jobs, either through a union or just having more of a voice within the company. And I think that's, you know, when you look at what warehouse workers are demanding, that's in a sense, you know, what is underlying those demands and also speaks to, to me, the kind of underlying issue, which is, again, going back to the structural issue. This is partly about Amazon's bad behavior, you know, we can say, you know, how Amazon treats sellers or how Amazon treats workers and so on. But the more fundamental issue is why is it that Amazon gets to decide all on its own, these big questions that affect so many people and that nobody else has any say over? And that's, I think, really what we're trying to change.

I think especially in a context of, well, if you hate Amazon's decisions, there might not be another employer for you to go to. That's right. Right. I think that the rise of corporate power and this sort of newfound push towards unionization, they're linked because people can't just quit and go. And I think it's, Amazon has a lot of very smart people and the fact that they don't see that relationship. The easiest thing they could do would be to create some competition. But they don't want to do that either.

You know, I come from this from having done a lot of work with independent businesses and having a lot of my research focused on, you know, the declining, the decline of independent businesses and the ways in which market power and policy really undermines them. But I think is interesting about what's possible right now is we're beginning to see around this issue of monopoly and corporate power, we're beginning to see these new alliances between small business groups and labor groups. And that, you know, to our ears right now, you know, in recent times, that seems really discordant.

It seems strange. Like we tend to think of like business on one side and labor on the other. But the coalition that created the New Deal, you know, was very much a coalition of small-scale enterprise and labor. I mean, that was the backbone of the New Deal. And to that way of thinking, the central issue was that we needed to decentralize economic power. And that forming a union or having the ability to start a business and being your own boss were like two sides of, you know, there were two tools in the same toolbox for achieving a more democratic distribution of economic power.

And so it's interesting, you know, and I think we kind of abandoned that in the beginning in the 1970s. You know, we just moved into both parties for different reasons, abandoned small businesses, became much more friendly with the idea of bigger is better and so on. And in the sort of 40 years since that happened, working people have seen their wages stagnate. We've seen declining numbers of small businesses. We've seen a shrinking middle class. And so it's interesting to me to think about, well, what is, you know, how is it that monopoly power? now is recreating this kind of alliance around decentralizing power. And could that really be the key to kind of the politics of, you know, how we, how we address concentration and actually be able to pass some policies that would do a lot of good for people? What is Amazon like when you talk to them? Do they have an approach to you? Do they just ignore you? Do they engage?

They engage a little bit. You know, sometimes when we do research, we have like a report coming out about something that we've, you know, been investigating about them, we'll call them for a comment and they will sometimes respond to us and engage quite a bit more on background than anything else. It's interesting. I mean, I think mostly they're just sort of interested in, you know, trying to get ahead of whatever it is that we're going to publish in those cases. You know, Jay Carney, who's there, you know, used to be Obama's spokesperson and is there, is now Amazon spokesperson, you know, he's got a reputation, I think, have fairly well deserved to being kind of nasty on Twitter. And, you know, he will

occasionally, you know, poke at me and that sort of thing. But, you know, which I always think is kind of odd, but, you know, he does. But, you know, mostly they, they respond, you know, by, you know, giving statements to media along the lines of, you know, we're really tiny. We don't really matter. You know, it's a big competitive world. It's like, you think it does anyone believe that? You know, but they keep saying it. Their line is always like, we're only like four percent of worldwide total retail. And it's like, well, that, okay. That's fine, but that's a, that's not the market we were talking about. Jay Carney does have a reputation of being pretty spiky on Twitter. And I wonder how much that carries through from Bezos. I wonder how much of that is his own

creation. And I, I honestly, and I've come back to this a few times now, people love Amazon. And I think there's an element where they can play for better or worse. They can play the dual role of both essential beloved service provider and underdog all at the same time, especially when the president hates Jeff Bezos so much because of the Washington Post that Amazon gets to play this role of sort of doing the job even, like there's a nobility to it. That is a potent combination of elements for Amazon to play into. And I wonder, I continue to wonder, if the bipartisan energy around monopoly broadly can be brought. to bear on something that people love so, so much. They have played that very well for many years

and have, you know, wrangled a lot of government favors from doing that. You know, I think, you know, as we see them kind of rising, their presence rising in Washington, D.C. and, you know, northern Virginia, I'm kind of curious how that's going to alter people's perception of who they are. You know, they're building out and they've become one of the top corporations in terms of lobbying. They do a lot of campaign donations, but they also have like a lot of sort of soft power, soft relationships in D.C. And increasingly so as they build out a headquarters there and start to have, you know, tens of thousands of employees who are going to, you know, going to the same school with, you know, top political people as their kids, you know, and so on, those kinds of, you know,

social networks and the power that comes from that. And I, I just, you know, that, I find that that makes me very uneasy. And I wonder to what extent people are going to be seeing that. sort of increasing relationship between this huge private company and the federal government in ways that possibly change how they view Amazon? Well, I don't think under this administration. That's the other moment that we're in is this president in particular hates them. And so it seems like the most cynical and callous of opportunities to exploit, but it's certainly there.

Is that on your mind? What do you mean? The soft social networks between Amazon executive. and the federal government seems somewhat impossible right now because the federal government is controlled by a man who despises them. Oh, but I think that's very, I don't think that's actually an accurate assessment of what's happening. Yeah, so Trump, you know, you know, bitches sort of publicly about Bezos. But, you know, he goes off about a lot of different things that have absolutely nothing to do with what his administration actually does. I mean, his administration, you know, has,

you know, not aggressively pursued antitrust action. You know, there's some real questions around, you know, some of the contracting with the Defense Department and so on. I mean, I, you know, I don't see that at all. I mean, I think this is an administration that has, you know, Amazon, you know, did not pay effectively really much in the way of federal taxes in recent years because of Trump policies. You know, you go talk to your, like, local bookstore or, you know, running shoe store or whatever and ask them what their effective federal tax rate is, and it's many times, you know, what Amazon is actually paying. I mean, that's just a gross disparity, and that's a Trump administration creation. So I think, you know, I think this idea that what his sort of bluster around Bezos

and what his administration actually does are really, really different. I mean, this is an administration that is, you know, is deeply linked to sort of furthering the interests of the wealthy of corporations. And Amazon has benefited from that enormously. All right. Well, Stacey, we are sadly out of time. Tell people where they can find you and find your work. Sure.

The Institute for Local Self-Reliance. which is ILSR.org. And if you go to ILSR.org slash Amazon, you'll catch up with all of our Amazon work and research. And if you're interested in getting involved with Athena, I encourage you to look that up as well. You can join the coalition online. Great.

Well, Stacey, it's been wonderful to have you. We'll have to have you back soon. Thank you for joining us. Thanks so much. It was great to be here. All right. My thanks to Stacey Mitchell, co-director of the Institute for Local Self Reliance.

It was a great conversation. Love to hear what you think about it. You can treat me. I'm at Reckless. Love knowing what you want me to cover, who you want me to talk to. Love those suggestions. Keep them coming. I take them seriously.

We'll be back later this week with a chat show. I'll talk to you soon.