How far can Amazon go? It has upended industries and changed the way the world shops. But it should beware of abusing its power

How far can Amazon go? It has upended industries and changed the way the world shops. But it should beware of abusing its power

Twenty years ago, Jeff Bezos left his job in finance and drove to Seattle to set up a new firm, which he named after a giant river to reflect the scale of his ambitions. Since then Amazon has changed the way that the world shops and upended industries. But, as our cover leader “How far can Amazon go?” warns, it must be careful not to become a bully

Perhaps the biggest concern about Amazon is, paradoxically, a consequence of its long-term vision. It is hard to compete with a company whose shareholders do not expect it to make a profit. Its vast scale and willingness to operate at zero or negative margins represent high barriers to entry for potential competitors. This cannot go on for ever. The concern is that Amazon is merely waiting for rivals to go out of business before raising its prices. If that happens, regulators should jump on it hard. That would provide an opportunity for another firm—China’s Alibaba, say—and some investors might rue the Amazon earnings that never came. But consumers would once again win, as indeed they generally have done as Mr Bezos’s scrappy startup has expanded its reach into so many aspects of everyday life.

http://www.economist.com/news/leaders/21604550-it-has-upended-industries-and-changed-way-world-shops-it-should-beware-abusing?fsrc=nlw|hig|20-06-2014|5356c450899249e1ccb3081a|

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