The news: Amazon is pushing back against proposed antitrust legislation it says would “cause serious and damaging unintended consequences” for its Amazon Prime loyalty program and the consumers and sellers who rely on the service, per a blog post from its vice president of public policy, Brian Huseman.
The proposed legislation: The law that Amazon objects to, the American Innovation and Choice Online Act (AICOA), would prevent Big Tech companies from giving their products favorable treatment over competitors.
Amazon’s objections: Naturally, Amazon is vigorously opposed to any bill that would limit its ability to fully monetize its various services, such as Fulfillment by Amazon, as well as reduce its capacity to control every aspect of the Prime experience.
On the other hand: There is no question that Amazon holds considerable market power. We put its share of total US retail ecommerce sales at 39.5%, while the next 14 biggest online retailers are collectively responsible for just 31.0%.
The big takeaway: The antitrust legislation would have a profound effect on Amazon’s ability to maintain its Prime program. As Andrew Lipsman, eMarketer principal analyst at Insider Intelligence, noted in our Era of Uncertainty report, Amazon Prime is the linchpin in the company’s strategy to maintain its ecommerce dominance even as online sales begin to soften.