News & Analysis

Amazon Prime Day bonanza thwarted as US Government unleashes antitrust probe

Andrew Saks, Wednesday, 23 June 2021

Today, as Amazon Prime Day draws to a close, it would be reasonable to assume that the company's stock would now be booming, as per previous years as the clever marketing coup pulled off by Jeff Bezos' e-commerce giant has resulted in more and more sales every year since its introduction in 2015.

This, unfortunately, is far from reality as Amazon's stock has crashed by 21.82 points which equates to 0.82% during the course of the day since the opening session in New York this morning.

This could well be as a result of the United States House Judiciary Committee having begun work today on a series of six antitrust bills, many aimed at reining in Big Tech, in what is expected to be a lengthy, contentious session.

Amazon is one of the large internet companies in the government's view, as US Congress takes on Jeff Bezos' giant alongside Facebook and Google.

Amazon CEO Jeff Bezos will make his first-ever appearance before Congress on July 29 this year. In recent years, Mr Bezos has granted few extended interviews to journalists and has seldom faced the kind of adversarial questions he is likely to get from lawmakers on the House Antitrust Subcommittee.

According to a report by Reuters, as Apple and Amazon worked toward a high-profile distribution deal at least two years ago, one proposal on the table was for Apple to have “competing ads removed from search” results on Amazon, according to documents released from a U.S. House of Representatives investigation.

The question that is being raised is whether large Silicon Valley giants such as Amazon, Apple, Facebook, Alphabet’s Google, along with Microsoft have become too powerful or do they maintain anti-competitive practices?

The first day of Amazon’s 48-hour Prime Day event is expected to have driven the most online sales over a 24-hour period so far this year.

Sales during the first 24 hours of Amazon’s mega sale, which began at 3. ooam ET on Monday, are set to surpass $5.6 billion, representing 8.7% growth year over year, according to an index tracked by Adobe Analytics.

The online bonanza has been so massive in terms of scale that Walmart, Target, Best Buy and Kohls have been marking down their goods in an attempt to remain competitive whilst all eyes are on Amazon, yet the antitrust wrangling instigated by the US government is enough to overshadow even that level of success and as a result, investors appear to be exercising caution.

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