Amazon (NASDAQ:AMZN) has done quite well for itself during this coronavirus lockdown. As one of the largest companies in the world and the reigning giant of the e-commerce world, Amazon’s investors have made a lot of money over the past few years. However, many people have started to become a little resentful of Amazon.
Earlier this year, Amazon slashed affiliate commissions for the millions of affiliate e-commerce businesses that had previously partnered with the giant for so long. While this has made even more people frustrated with the company, it turns out that Elon Musk has his own gripes with the e-commerce giant as well.
In particular, Musk went on to say that Amazon was effectively acting as a monopoly, exerting an overwhelming control over the free speech of its users and that it should be broken apart. What brought about this whole situation was an ebook written by an author on the subject of COVID-19 and the subsequent lockdowns. The book, which was to be self-published on Amazon’s Kindle Direct Publishing platform, was surprisingly rejected by Amazon. Although the company has since gone on to say that this was a mistake, it was a move that sparked a significant backlash among more vocal free speech activists.
This is insane,” Musk tweeted towards Jeff Bezos. “Time to break up Amazon. Monopolies are wrong!” Amazon is the dominant player in the book selling market, vastly outselling other traditional bookstores like Barnes & Noble. The e-commerce giant accounts for around 50% of all new book sales in the U.S, while also accounting 75% of all e-book sales. As such, the company has already become a major rival and threat to traditional publishing houses in some ways.
Amazon’s also drawn a lot of ire for paying seemingly very little income tax. Due to various deductions and incentives that are given to the company, the e-commerce giant ended up paying extraordinarily little in 2019 despite its size. A number of U.S. politicians have called for the company to potentially be broken up as well. In addition to all of this, Amazon has already fallen under the scrutiny of regulators for possible antitrust violations.
Other well-known financial pundits have gone on to criticize the e-commerce giant for harming and helping push small companies out of business as Amazon continues to grow. Jim Cramer went on to say earlier this month that Amazon had “drug the grave for small businesses” across America.
Shares of Amazon didn’t respond much to this little spat between Musk and Bezos, with share tumbling just 1% in a move that could just as much be attributed to normal market volatility.
Amazon Company Profile
Amazon is among the world’s highest-grossing online retailers, with $233 billion in net sales and roughly $311 billion in estimated physical/digital gross merchandise volume in 2018. Online product and digital media sales accounted for 53% of net revenue in 2018, followed by commissions, related fulfillment and shipping fees, and other third-party seller services (18%), Amazon Web Services’ cloud computing, storage, database, and other offerings (11%), Prime membership fees and other subscription-based services (6%), product sales at Whole Foods and other physical store retail formats (7%), and advertising services and cobranded credit cards (4%). International segments constituted 32% of Amazon’s non-AWS sales in 2018, led by Germany, the United Kingdom, and Japan. – Warrior Trading News