Disappointing earnings reports from Big Tech companies may complicate efforts in Congress to pass new restrictions on the digital giants.
Amazon stock fell to its lowest price in more than a decade on news that in the first quarter of the year, the online retailer, cloud computing giant, and digital streaming service saw its slowest growth rate since the dot-com bust of 2001. It also marked a second consecutive quarter of single-digit growth. Amazon estimated future growth rates at between 3% and 7%, missing analysts’ revenue targets by as much as $9.5 billion. Profits are down, too, with the company’s margin dropping to 3.
The traditional understanding of a monopolist includes certain behaviors, including artificially high profits. Amazon’s poor financial showing may make it harder for its foes to claim that the company is able to charge inflated prices without losing market share.Earlier this year, Facebook owner Meta saw its market capitalization value fall below $600 billion, the threshold for regulation in a leading House antitrust bill.
“On a practical level, it's often an arbitrary metric, but in this case, it's also bad policy to base these regulations on size alone and not behavior,” she said. “It's also inconsistent with economics since size or market capitalization is not necessarily correlated with market power.”
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