Jeff Bezos, who you might also know as “the richest man in the world” or “that guy who ate a lizard one time,” is stepping down as the CEO of Amazon after twenty-seven years at the helm — or maybe it’s better to say he’s stepping to the side. Bezos will instead take on the title of executive chair, which means he’ll still have an influential role in company decisions, but will no longer be the face of Amazon. Yet there’s no reason to believe that means Amazon will become the friendly monopolist its smiling logo might suggest.
With Bezos at the helm, Amazon grew from an online bookseller started from a garage in Bellevue, Washington to one of the largest publicly traded companies in the world that not only controls key e-commerce and cloud platforms, but has extended its reach into a growing number of sectors. However, it’s important not to get distracted by the triumphalist historicizing of tech companies and their chief executives that’s become far too common since internet businesses exploded in the 1990s.
It’s often said that Amazon was started in Washington so it would be close to Microsoft and try to attract some of its talent, and while that’s partly true, it was hardly the deciding factor. Before founding the company in 1994, Bezos was the senior vice president of a hedge fund, and it’s said he made sure the first house he rented in Bellevue had a garage so he could spin the kind of founding story one would expect of a tech company. He was hardly poor, and he knew how to minimize his tax burden.
The real reason Bezos was drawn to Washington was because the state had no personal income tax and no corporate income tax, and at the time, Amazon only had to charge sales tax on purchases made in whichever state the company was headquartered in. With a population of just over five million in 1994, Washington was the perfect base from which to ship the other 260 million Americans all the books they could buy — not because Bezos had a particular love of books, but because they could be bought wholesale, were easy to ship, and independent bookstores had been decimated, leaving a market to be captured.
Building a Monopoly
As Amazon began to attract customers and expand its product offerings, it took a different approach to growth. Instead of seeking to turn a profit as quickly as possible, Bezos played the long game, reinvesting Amazon’s earnings in the business to such a degree that it didn’t turn its first quarterly profit until 2001 and its first annual profit until 2003. For years to follow, Amazon’s profit margins remained slim as it expanded its empire.
This was undoubtedly a great business strategy, but it came with consequences. By operating at a loss for a decade, Amazon was able to provide goods and services below cost to drive out its competitors and dominate the markets it operated in. This only became easier as it grew, as the case of Diapers.com shows.
In 2009, Bezos saw that Diapers.com was gaining popularity with parents, so Amazon set up a meeting with its founders. When they refused to sell, Amazon set its prices on diapers and other baby products 30 percent below those offered by its competitor, and when Diapers.com adjusted their prices, the ones on Amazon changed accordingly. Amazon was using the profits from its other products to sell baby products below cost so Diapers.com would have to sell itself to Amazon or go out of business. Amazon even launched a service called Amazon Mom to offer baby products at even steeper discounts until, on November 8, 2010, Diapers.com finally sold to Amazon. Not long after, Amazon Mom was terminated, and prices returned to normal.
The practice of offering products and services below cost to drive out competitors is called predatory pricing, and it’s an anticompetitive tactic. Over the years, Bezos has repeatedly abused the power Amazon amassed from underpricing its offerings to drive competitors out of business, squeeze third-party sellers on its platform, and extract public subsidies from state governments across the United States. Amazon is already under investigation for anticompetitive practices in the United States and the European Union, but there’s a much deeper consequence of its success.
The model of underpricing a service to drive out competitors and establish a monopoly position has become a core business model in Silicon Valley — one that venture capitalists will burn billions upon billions of dollars in bids to see to fruition. While consumers may see benefits in the period the company is driving out its competitors, like parents did for the brief period Amazon was trying to undercut Dispers.com, monopolists don’t tend to have much regard for their workers.
Exploiting a Growing Workforce
In Bezos’s letter announcing his new position, he asserted that “invention is the root of our success,” but some people might dispute that claim. It’s common to ascribe the growth of a company, especially in the tech sector, to its visionary leader and seeming technological prowess, but Amazon would be nothing without its 1.3 million workers, most of whom organize, fulfill, and even deliver the packages that are the company’s core business.
The stories of terrible working conditions at Amazon are nothing new. Back in 2011, workers exposed the company for failing to install air conditioning at many of its warehouses, causing workers to overheat and faint on the job. In recent years, it’s also become clear that Amazon workers are expected to meet almost impossible production targets, feel pressured to skip bathroom breaks, and are overworked to the point that worker injuries are nearly double the industry standard in the United States. Whenever workers tried to push back, Amazon fought them vigorously. The company is known for its union-busting tactics, and during the pandemic, it was exposed for hiring operatives from the notorious Pinkerton agency to spy on workers, environmental groups, and labor unions. It was also found to track internal listservs and private Facebook groups for worker organizing.
In recent years, Amazon has also built out one of the most expansive shipping networks in the United States, but unlike the United States Postal Service (USPS), it relies on nonunionized labor and even a series of subcontractors and independent contractors to make deliveries. Amazon already in communities where it sets up fulfillment centers, and shifting more delivery jobs to its nonunionized delivery network not only lowers wages in that sector, it also threatens a public institution that’s been for black Americans.
Bezos presents himself as someone who cares about workers, writing in his letter that Amazon used its “scale and scope to lead on important social issues,” including “our $15 minimum wage and the Climate Pledge,” yet that’s nothing but corporate spin. The $15 minimum wage was a response to from workers and lawmakers over the fact many of its employees relied on food stamps. Raising wages took some negative attention off the company, even as some workers said they were actually worse off as Amazon .
The growing worker organizing at Amazon is all the evidence one should need to see Bezos wasn’t a good boss. The company has to its climate goals and even fired . During the pandemic, it failed to keep workers safe to such a degree that workers took action . It even tried to smear one worker who was fired for organizing, but it when their meeting notes leaked. Workers at a warehouse in Bessemer, Alabama will even begin later this month — and the company is fighting it tooth and nail.
Rehabilitating a Tarnished Image
In the next few years, Amazon will likely face more challenges than it ever has. Worker militancy across the tech sector is increasing, and there will surely be more attempts to unionize its warehouses in the future, especially if the workers in Bessemer are successful. The company will also likely face anti-monopoly lawsuits in the United States, if not in the European Union as well, and Bezos is getting out of the spotlight before that happens.
Near the end of his letter, Bezos explained that taking the executive chair position will give him “the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.” As Amazon continues with the relentless ethos imbued in it by Bezos, he may now bring it to other ventures while trying to soften his image.
In 2018, Bezos was asked what he’d do with his billions, and : ‘The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel. That is basically it.” With a net worth of $130 billion, which dropped after his in 2019 and soared through the pandemic to close to $200 billion, his eyes were trained not on the escalating climate crisis, the growing crisis of inequality, or the homelessness crisis gripping Amazon’s home city of Seattle, but on the stars.
This shouldn’t come as a surprise. Amazon was established in Washington to reduce its tax burden and has been deemed the for its tax avoidance strategies. It vigorously fought attempts to make it on purchases outside Washington, only , and more recently in Seattle to fund programs to help the homeless, even as it frequently pays in the United States.
Bezos seems to have learned a lesson from Bill Gates after having his name dragged through the mud in recent years. Gates was after the Microsoft antitrust case and took to philanthropy to . Years later, and after giving millions to media companies, Gates is about how he’s saving the world by giving away his money, distorting of how he deploys his vast wealth.
Bezos seems likely to follow a similar playbook. He’s already distributed money to through his Day 1 Fund and through his Earth Fund. But this giving hides the fundamental problem.
Fighting for the Future
As the richest man in the world, Bezos has immense power, and ultimately he is going to use his wealth to defend and advance his interests, as his comments about space suggested. After decades of tax cuts, governments around the world have been starved of the revenue required to address the cascading crises of the twenty-first century, and billionaires cannot fill the gap no matter how much their public relations teams and a sycophantic corporate media system tell us otherwise.
The power and wealth that Bezos wields is the direct product of the brutal exploitation of more than a million workers that are treated not like human beings, but cogs in a great machine that will not stop until there’s no escape from its all-encompassing network of platforms and services. We must reject not only his attempts to use his ill-gotten gains to rewrite his personal story, but also his inevitable desire to set our horizons on a future that puts the interests of billionaires before those of the rest of humanity.
As he steps away from the position of CEO, we should recognize just how obscene it is for one man to have gained an during a global health crisis where US unemployment soared to