Jeff Bezos is number one on many lists. He is the richest man in the world. He is also simultaneously number one on the enemies list of a rising star on the left—Lina Khan—and a rising star on the right—Josh Hawley. The 32-year-old Khan became famous by publishing a widely cited and highly praised student Note titled: ”Amazon’s Antitrust Paradox,” in Yale Law Journal in 2017. She is now President Biden’s nominee to be a Commissioner on the Federal Trade Commission after making brief stops on the FTC Staff, the faculty of Columbia Law School, and the staff of the House Antitrust Subcommittee. The 40-year-old Hawley is a fellow Yale Law graduate who represents Missouri in the Senate, led the unsuccessful effort to block the Senate from certifying President Biden’s victory, and most recently wrote: “The Tyranny of Big Tech,”—a book in which he characterizes Amazon as “the gravest threat to America.” Ironically, you can buy Hawley’s new book online at Amazon for the bargain price of $18.22. On his way up, Hawley served as a law clerk to Chief Justice Roberts and as Missouri Attorney General.
The most important characteristic that explains Bezos’s remarkable success is his patience. At a time when most corporate CEO’s are criticized for short term thinking, Bezos has displayed remarkable patience. He started Amazon in 2006. Under Bezos’s leadership, Amazon persevered through several losing years, including 2010, before it became a consistently profitable company. Its recent performance has been remarkable. Its annual profits increased by 232% in 2017, 15% in 2018, 84% in 2019, and 38% in 2020.
The other characteristic that explains Bezos’s remarkable success is his ability to take advantage of the opportunities for increasing the size and profitability of a corporation while remaining within the boundaries of antitrust law. Both Khan and Hawley document hundreds of Amazon actions that they characterize as anticompetitive. Those actions fall into four general categories—driving smaller competitors out of business by charging prices so low that the competitors cannot match them; acquiring newly created firms that pose potential future threats to Amazon’s dominance; engaging in aggressive programs to grow by increasing its share of the retail market and by extending its reach vertically through acquisition of some of its most important suppliers; and, co-opting many of its competitors by providing them a more efficient way of marketing their products.
Khan and Hawley argue passionately that Amazon’s actions should be considered violations of antitrust law, but both recognize that they fall within the boundaries of antitrust law as those boundaries have been created by Congress and the Supreme Court. Khan and Hawley use Amazon’s conduct to explain why they believe that Congress and the courts should make major changes in antitrust law.
As Khan and Hawley explain, Amazon’s conduct does not violate U.S. antitrust law because the Supreme Court has long interpreted the antitrust statutes to maximize consumer welfare, and no one has yet been able to prove that any of Amazon’s patterns of behavior injure consumers. Khan and Hawley argue that Congress and the courts should change the goals of antitrust law to place a high value on protecting competition itself, protecting competitors of large firms, and protecting society from large firms. In both my capacity as a consumer and my capacity as an antitrust professor, I would add one more superlative to the long list of superlatives that characterize Jeff Bezos. He has done more to maximize consumer welfare than anyone else in history.
Richard J. Pierce, Jr. is the Lyle T. Alverson Professor of Law at George Washington University.