Amazon Is Bowing to Regulators. Here's What It Means for Investors
Like some other big tech companies, Amazon (NASDAQ: AMZN) has been in the antitrust hot seat for several years now. The company has a huge presence in U.S. e-commerce, controlling roughly 40% of a fast-growing market, and it's also the leading cloud infrastructure provider.
Amazon has no direct rival in e-commerce as no other company has more than single-digit market share in the category, and Amazon has used that dominant position to its advantage, launching businesses like its third-party marketplace and advertising embedded on its product pages. Both of those deliver high margins. In fact, Amazon's marketplace is so successful that it generates more in sales volume than the company's first-party business (that is, direct sales).
The online retail giant has taken note of the success of individual products in the marketplace, at times launching its own similar private-label products. Former Amazon CEO Jeff Bezos said Amazon policy forbids using third-party data in making first-party product decisions, but he also told a congressional panel that he couldn't guarantee that that policy had never been violated.
Source Fool.com
