How ruthless is Amazon, really?
I n 2009-10 Amazon went to war over nappies. The e-commerce giant, then worth about $50bn, identified a startup, Diapers.com, that had a devoted following among young mums. First it stalked it. Then it pounced, reaching out to buy the company on the same day that it slashed the price of its own baby products by 30%. Amazon’s price cuts almost crushed Diapers.com, forcing it to sell itself to its nemesis. Marc Lore, Diapers’ founder, has not forgiven Amazon. He later went on to lead the e-commerce division of Walmart, its biggest rival, partly to get his own back. “It’s still triggering,” he admitted at a recent event attended by your reviewer.
The story of Diapers.com is one of many damning narratives about Amazon that run through “The Everything War”, which relates how other well-known brands have felt its hot breath on their necks, from Allbirds, a shoemaker, to Trader Joe’s, a supermarket chain. At the Wall Street Journal, Dana Mattioli, the author, has doggedly pursued Amazon; her stories on its misuse of sellers’ data have caught Congress’s eye. She is on the antitrust warpath, and the book tries to portray the company’s supposed misuse of power.
The book starts by quoting an article in the Yale Law Journal in 2017 called “Amazon’s Antitrust Paradox”, written by a 27-year-old law student called Lina Khan. It ends with Ms Khan, now chair of the Federal Trade Commission (FTC), a trustbusting and consumer-welfare agency, throwing the book at Amazon. Last September the FTC and 17 state attorneys-general sued Amazon, accusing it of operating an illegal monopoly by using its power to raise prices and degrade service for shoppers and vendors, while stifling competition. Amazon calls the lawsuit misguided.
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