Amazon as Antitrust Monopoly and Permanent Temporary Workplace

[posted by Alice]

In the June 18, 2012 issue of The Nation, Steve Wasserman wrote, “The bookstore wars are over. Independents are battered, Borders is dead, Barnes & Noble weakened but still standing and Amazon triumphant. Yet still there is no peace; a new war rages for the future of publishing. The recent Justice Department lawsuit accusing five of the country’s biggest publishers of illegally colluding with Apple to fix the price of e-books is, arguably, publishing’s Alamo.” Wasserman also called this suit “an antitrust travesty, a failure to go after the ‘monopolistic monolith’ that is, as the Times put it, ‘publishing’s real nemesis.’”

A little over a year later Amazon is the major beneficiary of a July 10 court ruling which says Apple and major publishers may not collude to maintain higher e-book prices. Yet this ruling, which helps assure Amazon’s place as “monopolistic monolith,” in effect rewards the online bookseller for keeping prices artificially low. As Michael Bourne at The Millions has said, “Often, Amazon was actually losing money on its per-unit sales, but that was fine with Amazon, because what Amazon really wants to sell is not so much e-books as the delivery system of those e-books, called a Kindle.” What’s more, this ruling was made during a year in which Barnes & Noble took huge losses on its Nook e-reader, and Penguin and Random House officially merged so the Big Six publishers are now the Big Five. Amazon, which ranked 49th in the 2013 Fortune 500 list, has handily won “publishing’s Alamo.”

But as Amazon changes the world of publishing, it also makes noteworthy changes to the retailing landscape, contributing to a downward spiral in wages and the increase in the permanent temporary workforce. In a July 15 Harvard Business Review blog network post Michael Schrage noted that the fastest growing segment of America’s job market involves part-time and temporary jobs. Shrage cites, as one of the contributors to that trend, Amazon’s “below the radar” crowdsourcing Internet marketplace, Mechanical Turk. This questionably named site (the name refers to a chess-playing automaton from the 18th century) was launched in 2005.  According to Julian Dobson at the Huffington Post Business Blog, the work on offer ranges from transcribing business cards to correcting someone’s English, but the rate of pay is usually well below the U.S. minimum wage of $7.50/hour. For writing a ‘unique 150-word article about self-building your own home’, you might earn as little as 50 cents, yet according to Panos Ipeirotis, associate professor at New York University’s Leonard N. Stern business school, between $10 million and $150 million of transactions go through Mechanical Turk each year, with Amazon taking between 10 and 20 percent. Dobson says,“Mechanical Turk is a tiny niche of the global labor market, but it’s a niche worth watching as it’s being used by some big players, including the U.S. Army Research Lab. And Amazon is well worth watching, as a corporation that aspires to be the world’s number one intermediary between buyers and sellers.”

Amazon’s operation of its fulfillment centers also contributes to the trend toward a permanent temporary workforce. Recently at Fast Company Photographer Ben Roberts showcased his photos of the Amazon warehouse in the former coal-mining town of Rugeley, England. Rugeley suffered hard times after the closure in 1990 of the coal mine that was its main employer. In 2011 Amazon announced that it would set up a fulfillment center for packaging and delivery that would hire a “significant number of locals, some of whom had been out of work for 20 years.” The jobs themselves don’t provide “fulfillment” — workers in the huge facility must work in silence, their motions dictated by a computer that “tracks and commands every worker’s movements throughout the day.” But according to Roberts, workers are glad to have the jobs. He says, “Mines aren’t by any stretch of the imagination utopias. Any kind of mining is a dirty, dangerous, high-risk job. But what the mining industry did offer workers was a job for life. If you started working for the mine at 18, you could be the head of an entire team of miners by the time you were 35.” By contrast, the jobs in the Rugeley fulfillment center are almost always temporary positions that aren’t guaranteed and can disappear from one day to the next.

That Amazon can be described as an antitrust monopoly and permanent temporary workplace is oxymoronic at best, but more likely it’s an indicator of serious trouble in the publishing industry and the economy. Readers and writers might benefit from a more cautious view of this problematic corporate giant.