New House Bill Would Force Amazon To Sell Off Logistics Business
As the federal government continues efforts to reel in the tech giants, Amazon's logistics business has come in the crosshairs.
A new bill introduced by Rep. Pramila Jayapal, a Democrat representing Washington state, would likely force Amazon to sell off its Fulfilled by Amazon business, which packages and distributes items from third-party sellers purchased on its platform, The Seattle Times reports. The Ending Platform Monopolies Act, which also has Republican sponsors, is among four antitrust-focused bills up for a vote in the House of Representatives Judiciary Committee on Wednesday, Bloomberg reports.
Jayapal's bill comes in response to the Judiciary Committee's 16-month investigation into Amazon's practice of licensing its distribution network to third-party sellers who use its site, which found that Amazon gave sellers that use Fulfilled by Amazon preferential position among search results. The investigation, which concluded in the fall, followed a letter to legislators from sellers that accused Amazon of pressuring sellers to use its service while raising its price as much as 20% over four years, Bloomberg reports.
Amazon, the driving force behind the continued explosion of distribution center development, brought in $80B of revenue from the distribution services it offered third-party sellers last year, compared to $45B from its Amazon Web Services division. More than half of the products sold on Amazon come from third-party retailers that pay Amazon a commission on each sale, Bloomberg reports.
Since its launch in 2018, Fulfilled by Amazon has been a crucial part of the company's push to rely more on its own logistics infrastructure and less on industry mainstays like the U.S. Postal Service, FedEx and UPS. Over the course of the coronavirus pandemic, Amazon tripled its profits — and it plans to invest a significant portion of that windfall back into its logistics network.
Amazon, like Facebook and Google, is facing antitrust battles on multiple fronts. The Federal Trade Commission, led by longtime critic of big tech Lina Khan, is evaluating Amazon's planned acquisition of film studio MGM announced in May, The Wall Street Journal reports. The FTC is also investigating Facebook, while the Justice Department is overseeing investigations into Apple and Google parent company Alphabet Inc., the WSJ reports.
