Independents try to cut Amazon down to size

A handful of small business groups seek a breakup of the internet giant.
a large building

Fifteen independent business associations, including the North American Paint and Hardware Association, have submitted a letter to President Biden urging him to appoint personnel who are committed to restoring competition, ensuring small businesses have a fair shot, and willing to use the full extent of their legal authority granted by Congress.

“In recent decades, the federal antitrust enforcement agencies have failed to stop dominant corporations from engaging in abusive and anticompetitive conduct at the expense of independent businesses, including our members,” reads the letter.

Those failures, the letter continues, include the failure “to address the tremendous power wielded by dominant digital platforms, such as Amazon, which functions as a gatekeeper to the online market, a position it has exploited to the detriment of competing independent businesses.”

A small business interest group called Small Business Rising this week promoted an effort to bring attention to what it believes are the monopoly-like powers of Amazon. The group pointed to research that shows Amazon captures about 50% of online shopping, and that more than 60% of Americans start their search at Amazon when they want to buy something online. “As a result, other retailers have little alternative but to sell on Amazon’s site,” the group said on its petition to break up Amazon.

Also this week, Small Business Rising promoted a video of an "Antimonopoly Town Hall" with Congressman David Cicilline (D-R.I.), chair of the House’s antitrust subcommittee. The town hall took place in February. [Watch the video below.]

Among the business owners who appeared in the video to ask a question to Cicilline was Gina Schaefer, the owner of A Few Cool Hardware Stores, a collection of 13 Ace stores in and around Washington, D.C.

"Amazon is infinitely more financially stable, stronger and they receive a lot of preferential treatment from government —just here in the D.C. region, billions of dollars in subsidies to relocate their headquarters to the suburbs of Washington," she said. "They have resources that they can ensure that they can be top of mind to the consumer, as well.

"How can we win the policy changes, when Amazon in particular has such strong political influence and reach?" she asked. 

His answer: "What we need to do is continue to elect people who are serious about this fight, and continue to make it politically impossible not to respond in the right way on behalf of innovators and small businesses and entrepreneurs."

Meanwhile, Amazon has promoted itself as an ally to small to medium-sized businesses (SMBs). For instance, in late 2020, it rolled out “Amazon Accelerate,” a free webinar series for SMBs selling products through Amazon.

“We are deeply invested in empowering small businesses, and now more than ever, it is critically important for us to bring our seller community together as we all navigate new economic realities," said Jeff Wilke, CEO worldwide consumer at Amazon, at the roll out of the program. “Amazon is privileged to partner with a large, vibrant community of small business sellers. Amazon Accelerate will help these entrepreneurial organizations find new ways to serve customers, grow, and expand."

Amazon says that in 2019 more than 15,000 American SMBs exceeded $1 million in sales in its stores worldwide, and nearly 25,000 surpassed $500,000 in sales. Products from SMBs make up more than half of all items sold in Amazon’s stores worldwide.

Amazon says it spent $15 billion during 2019 on logistics, tools, services, programs, and people to help SMBs around the globe succeed in its online stores.