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126 Yale L. J. 710 (2016-2017)
Amazon's Antitrust Paradox

handle is hein.journals/ylr126 and id is 744 raw text is: LINA M. KHAN Amazon's Antitrust Paradox A B S T R A C T. Amazon is the titan of twenty-first century commerce. In addition to being a re- tailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and ex- pand widely instead. Through this strategy, the company has positioned itself at the center of e- commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm's structure and conduct pose anticompetitive concerns -yet it has escaped antitrust scrutiny. This Note argues that the current framework in antitrust -specifically its pegging competi- tion to consumer welfare, defined as short-term price effects -is unequipped to capture the ar- chitecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are height- ened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have re- warded. Under these conditions, predatory pricing becomes highly rational-even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors. This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential re- gimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties. A U T H O R. I am deeply grateful to David Singh Grewal for encouraging me to pursue this pro- ject and to Barry C. Lynn for introducing me to these issues in the first place. For thoughtful feedback at various stages of this project, I am also grateful to Christopher R. Leslie, Daniel Markovits, Stacy Mitchell, Frank Pasquale, George Priest, Maurice Stucke, and Sandeep Va- heesan. Lastly, many thanks to Juliana Brint, Urja Mittal, and the Yale Law Journal staff for in- sightful comments and careful editing. All errors are my own. 710

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