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Amazon.com Inc (AMZN)’s Rubber-Baron-Type Market Power

Economics is quite an insensitive science as it does not give weight to immaterial values. This was depicted en masse when the Industrial Revolution raised a bourgeois generation that got to enjoy material wealth without much affinity to class or culture. In literature, the memory of this shift is called Decadence. As the name suggests, relying strictly on economic incentives is very unhealthy for the society. Amazon.com, Inc. (NASDAQ:AMZN)’s power over the books is at a dangerous level and can be described as prone to monopsonistic tendencies and is highly criticized, according to Bloomberg.

Amazon Video Streaming Deal

“So, focusing on what the consumer wants maybe reasonably sensible, even though you have at least for a while a monopsony. But, ultimately monopsony is dangerous, because you can rig competitive pressures and change things,” informed Stephen D. King, chief economist at HSBC.

Amazon.com, Inc. (NASDAQ:AMZN) isn’t exploiting its favorable position in the detriment of other companies or consumers, but if the company begins to employ such shifty strategies on most of its products, the economic implications will be devastating. In fact, it would be enough to exploit only part of Amazon.com, Inc. (NASDAQ:AMZN)’s more than 200 million products to create immense misbalance in the competitive power of suppliers. On the other side, investors love to see economic power in a company, so if the current situation does not evolve into a serious problem, then we can say that the company’s doing fairly well.

“Anything that creates stability in the cash flow stream, like having control, is something you can price and analyze and make an investment case […] There’s two parts to Amazon. One is what they’re currently doing and Amazon says ‘if we stop growing we’re actually making lots and lots of money’,” said David Hero.

This lust for influence at Amazon.com, Inc. (NASDAQ:AMZN) is actually the way the company’s planning its expansion into profitability. It is trying desperately to capture as much coverage of the markets and the consumer base and it seems a very fruitful plan, but Amazon.com, Inc. (NASDAQ:AMZN) will have to show some promising values to investors this Thursday, otherwise the stock price might take a dive at least for a short while.

Disclosure: none

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