Updated: Oct 31, 2022
Image credits: technology review
The Era of the Pandemic wreaked havoc on the global economy and the Global supply chain mechanism. One company grew even more powerful than it was before the Pandemic. Amazon is not a small company that just provides you with easy shopping and deliveries. Amazon is a hyperpower when it comes to the scale of its business and economics. The business orbit of Amazon is spread across e-commerce, cloud computing, digital streaming, and artificial intelligence. All these areas are considered to be strategic in the 21st century. Many nations strive to achieve success in these fields to modernise and get a share of the new economic order in the World. Amazon is more powerful than many nations in the world when it comes to its artificial intelligence, cloud and digital capabilities.
This means that Amazon is ready for the 21st-century market and will have a considerable influence over the nation-states. Amazon is worth more than 92% of the world’s countries. The power of Amazon can be weighted by the fact that their official clients are the World’s most powerful military and department of defence - the Pentagon. Amazon has many contracts with government agencies, too and is being considered for many other lucrative deals. Amazon’s web service cloud is one of its biggest arms, about which you don't hear much. This cloud service has a vast capacity which the military and government desperately need in an increasingly digital atmosphere. There are many rivals that Amazon faces like Microsoft, IBM and Google, but its dominance and size only keeps increasing. In today’s piece, we take up the case of Amazon - power and influence.
THE POWER OF DELIVERY
We know how smooth Amazon's delivery system is even in developing countries like India, which have an underdeveloped infrastructure. This shows that Amazon has created a reliable delivery system and is more responsible than the delivery system of many nation’s postage services. Amazon’s model is simple yet powerful - local market integration of the delivery system with international market and services. This has made Amazon a global supply chain company too. All in all, this makes Amazon a delivery power, and that has consequences. Amazon’s powerful delivery system and local integration have led to local markets, and companies lose a lot in competition. Take, for example, Flipkart in India.
The battle between the two is of rabbit and turtle, but in this case, slow and steady doesn’t win. However, Flipkart has maintained itself in the market. It still is facing a colossal power push from Amazon. Amazon has huge global ambitions. They have killed many local businesses and set up huge headquarters in nations like India. This shows Amazon’s ambitions lie right here in one of the world’s biggest markets. Domestic players are facing the heat due to the huge capital power of Amazon. Amazon does benefit the local players in some form by providing a marketplace for selling products online, but Amazon’s delivery system and capital power monopolise the market. This can have severe implications for local market economics and the global market as a whole. This also makes the system more dependent upon one single company whose interests lie in boardrooms rather than cabinet rooms. This power of delivery increased in recent years, especially after the pandemic when home delivery was the preferred mode of intake.
THE POWER OF CLOUD
Amazon’s annual consumption of electricity is more than in many African countries, and Amazon has a greater carbon footprint than oil and gas companies and nears the footprint of Chevron. This energy consumption is because of Amazon’s technological cloud dominance through Amazon Web Services. Cloud is the 21st century’s Oil. The simplest example of it is - Google Drive, on which we upload documents to be kept sorted and free up the storage in the device. AWS owns about half of the world’s public-cloud infrastructure business, growing by about 30% per year. In 2020, AWS revenue totalled $45.4 billion. AWS is a behemoth when it comes to the platform it provides. AWS provides the world’s majority of cloud computing services. There are 100% chances that the Netflix movie you are watching is stored on AWS right now. From Netflix, NFL, Department of Defense and the CIA. AWS has enormous power over corporations. It can decide what to keep and what not to on its servers. Recently AWS removed Parler - a conservative news site from its servers. This shows that AWS gives Amazon huge authority over what content can be posted on the internet and what is allowed and what is not. The power of the cloud has given Amazon Authority over the internet. This power can be misused against a set of groups or companies.
This monopoly is deadly for innovation, free speech and small corporations. The Internet is getting increasingly controlled by fewer than many. Amazon’s AWS got a metric tonne push during the time of Pandemic when the whole world got inside their homes. Many companies that were not online and were using limited cloud services had to go up on the cloud, and the ready to go, provider, was AWS. This gave Amazon more revenue and influence on the internet and in the world. Cloud is military-level strategic in the 21st century, and hence the controller of data through the cloud is a behemoth.
There is no company with substantial size and interests in the Western world and the Orient that does not have an office for political lobbying in the capital of the world’s most powerful country - the Washington D.C. Amazon has an army of political lobbyists who garner favours and positive repo for the conglomerate. This lobbying leads to donations for the political parties and candidates that speak pro-Amazon and strive to protect the company’s interest through policies and regulations. At the same time, it provides more power to the company and does not go against monopolisation.
Politicians receive loads of cash to fund their election runs and campaigns and positive coverage on influential newspapers like the Washington Post, which Jeff Bezos owns - the founder of Amazon. Although on paper claimed to be unbiased, this elite newspaper and media addition to Amazon gives them leverage over the politicians. Amazon can shape the public narrative by contributing more to a politicians campaign and providing positive coverage. Washington D.C. is the centre of power of American politics, this place shapes policies and has many civil servants, military generals, think tanks and politicians residing, which raises the stakes in the game of lobbying in D.C. there’s an undeclared battle between the big tech companies for political lobbying in D.C. and Amazon is flooding Washington D.C. with money and muscle.
One of Amazon’s priorities is to persuade federal agencies to rent Amazon’s vast cloud computing services rather than maintain their own. (Amazon then bids for the work through the federal procurement process.)
The company also wants to power a planned, governmentwide e-commerce portal for official purchases of everything from office furniture to paper clips in a $50 billion market. Amazon has spent more than 14.2 million dollars in the year 2018 on lobbying - a record. This lobbying pressures the politicians to favour the company and sometimes choose the company over the country. Amazon’s political influence is on the rise as it is courting politicians and think tanks. This remains a big reason why Amazon’s malpractices are mostly avoided.
TAMING THE BRAWLER
Amazon may have expansionist ambitions and a monopolistic market structure. Still, one thing is true of it that it has given a platform to many to grow from it. Still, the problem remains that this growth is limited and follows a hierarchy system where Amazon is the parent and the others are its subsidiaries. Amazon has also provided much-needed employment opportunities and development of market infrastructure in many nations, but this alone cannot justify Amazon’s malpractices. Amazon evades taxes, indulges in lower working condition practices for workers of its groundwork, and often avoids policy changes and regulations.
The Brawler can only be tamed within - there has to be awareness made among the company individuals about the rights of others. The other way which remains tough to execute but a potent weapon is to regulate Amazon federally. Put up quotes and through Startup protections provide a safe haven to new budding companies to face the giant of Amazon. Politicians should also be asked to provide for their donation details and the agreements made, if any. This will lead to transparency, and citizens can see for the politicians who are not compromised. Amazon’s influence and power will keep on rising in the post-pandemic era. This power has to be checked and balanced for the benefit of all.
BY HARSH SURI
CO-FOUNDER THE GEOSTRATA