NEW YORK (Reuters Breakingviews) – Amazon.com says the idea it’s illegally squeezing its merchants is “exactly backwards.” California Attorney General Rob Bonta oag.ca.gov/news/press-releases/attorney-general-bonta-announces-lawsuit-against-amazon-blocking-price last week accused the company started and chaired by Jeff Bezos of violating antitrust law, in the $1.3 trillion e-commerce giant’s biggest legal challenge yet. Whether California prevails or not, investors have already granted Amazon a market valuation fit for a monopoly.
The lawsuit filed on Sept. 14 blames Amazon for punishing retailers who list products for a cheaper price elsewhere, like Walmart or Target, saying this effectively sets a price floor for goods. Amazon, meanwhile, argues that forcing it to showcase products at higher prices would be antithetical to antitrust regulatory goals. That’s valid in that antitrust has tended to focus on consumer prices.
Amazon’s dominance in e-commerce www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf may attract foes, but it also confers a premium stock price. One way to value the retail part of Amazon is to strip away the more profitable cloud business, Amazon Web Services. Valued at the same 6 times revenue as Oracle, that division would have an enterprise value of $370 billion, leaving the retail business at close to $1 trillion.
www.nasdaq.com/articles/amazon-is-already-valued-like-a-monopoly-0