Monopolies in e-commerce

Three things e-commerce businesses need today

Monopolies                                   

The issue of monopolies has always been a huge consideration around the world. Monopolies have a bad reputation in the United States. In macroeconomics they have proven to stall innovation and economic development. Economic development depends a lot in innovation. However monopolies block this type of innovation through blocking smaller competitors in illegal means. This includes price fixing. In the United States monopolies became notorious in the twentieth century. The most well known monopolies in the United States exist in the commodities sector.

John D. Rockefeller started the oil conglomerate Standard Oil which dominated more than 80% of the oil industry. They did this by blocking any competition or buying out their competitors. This practice created a bad name for monopolies which later forced legislators to act on them. These monopolies were forced to break down into smaller entities in order to create competition in these sectors.

Monopolies in e-commerce

Many commentators have argued that modern tech companies are quickly becoming monopolies. Amazon has been one e-commerce business that has been placed in the spotlight. Many people have stated that the justice department should take action on Amazon’s monopolistic tendencies. However, the defense on Amazon’s side has been the fact that they control only 33% of the e-commerce sector. This means that they have other competitors, therefore, they are not a monopoly. So far they have not done anything illegal for lawmakers to come after them. Many business commentators have commented that Amazon faces huge challenges ahead due to more companies entering the e-commerce sector. Walmart is one of the largest competitors that Amazon has in the e-commerce sector. They have been steadily growing their e-commerce sales over the past couple of years. Walmart unlike many of Amazon’s competitors has huge investment backings and a larger revenue than Amazon.