The Flawed Analysis Underlying Calls for Antitrust Reform: An Assessment of Lina Khan’s Amazon’s Antitrust Paradox

Abstract

In her law journal article Amazon’s Antitrust Paradox, Lina Khan argued, using Amazon as an example, that current antitrust doctrine cannot identify certain types of anticompetitive conduct in platform and data-driven markets and, consequently, reforming antitrust is necessary to correct these deficiencies. Khan’s analysis of Amazon’s conduct and the conclusions she drew from it are flawed because she ignored or misapplied the economics of two-sided markets, mischaracterized competitive conditions, and did not consider the pro-competitive effects of Amazon’s conduct. In this article, we review the economics of two-sided markets and then assess Khan’s analysis of alleged predation in e-books and in the online sale of diapers, as well as alleged anticompetitive implications of Amazon’s vertical integration into logistics and its use of data. A careful assessment of Amazon’s conduct does not support Khan’s conclusion that antitrust reform is necessary because she has not demonstrated that Amazon’s conduct is anticompetitive.