Interplay Between Amazon Store and Logistics

28 Pages Posted: 3 Oct 2023

See all articles by Patrick Andreoli Versbach

Patrick Andreoli Versbach

Charles River Associates

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Date Written: September 11, 2023

Abstract

This paper examines the antitrust investigations and allegations by the European Commission (AT.40703 – Amazon Buy Box) and Italian Competition Authority (A528-FBA AMAZON), and the regulatory proceeding by the Italian Authority for Communications and Postal Services (AGCom’s resolution 94/22/CONS), surrounding Amazon's Store, and the interplay with its logistics and delivery services. While some commentators and these authorities have raised concerns about Amazon's alleged “self-preferencing”, rapid growth, and its alleged ability to leverage its (upstream) e-commerce market power to strengthen its position in (downstream) logistics services, this paper highlights alternative perspectives that are often overlooked or neglected. To achieve a comprehensive understanding of Amazon's conduct related to the above-mentioned investigations, we consider its business model, monetisation strategy, and underlying incentives. Amazon's stated focus has been on innovation and customer satisfaction, with the long-term goal of enhancing the value of its Store by offering low prices, a broad selection of available products, and fast delivery. This approach aims to build customer trust and encourage repeat business. Amazon's logistics services have generated significant value by bridging the gap between the online and physical worlds. Customers benefit from fast and reliable deliveries, while third-party sellers have gained another option to expand their businesses without investing in their own logistic networks. By delving deeper into the Amazon Store and its connection to logistics services, we argue that the theories presented by these agency investigations do not fully capture the factual and complete evidence surrounding Amazon's practices.

Keywords: vertical integration, open systems, online retailing, logistics, competition

JEL Classification: L50

Suggested Citation

Andreoli Versbach, Patrick and Gans, Joshua S., Interplay Between Amazon Store and Logistics (September 11, 2023). Available at SSRN: https://ssrn.com/abstract=4568024 or http://dx.doi.org/10.2139/ssrn.4568024

Patrick Andreoli Versbach

Charles River Associates ( email )

81 Avenue Louise
B-1050 Brussels
Belgium

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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