Amazon won’t have enjoyed the party for long. The group caused a sensation on Monday with a colossal investment – up to $4 billion – in artificial intelligence (AI) specialist Anthropic, one of the big rivals of the start-up OpenAI. The promise of a bright tomorrow. With their data centers, cloud giants are best placed to explore generative AI and market it in the form of subscriptions to online tools. Microsoft had OpenAI (ChatGPT), Google, DeepMind. Amazon, which, alongside its e-commerce empire, is number one in the cloud with AWS, now has Anthropic.
By Tuesday, it was no longer time for euphoria. The Federal Trade Commission (FTC), the American competition watchdog, accompanied by 17 states, announced on September 26 that it was filing a complaint against Amazon for abuse of a dominant position. According to the FTC, Amazon discourages sellers from offering their products on other platforms at lower prices than on Amazon and “biases the listing of products on its platform in favor of those that it markets itself”. The Authority’s press release specifies: “Amazon is exploiting the power it derives from its monopoly to enrich itself, while raising prices and degrading service for the tens of millions of American families who shop on its website. platform and the hundreds of thousands of businesses that depend on Amazon to reach them.”
Amazon’s impact on consumers and businesses is complex to assess. The group speaks the truth when it points out – every time it has the opportunity – that it has considerably improved the customer experience. They can now find a myriad of products easily and have them delivered in a much shorter time than in the past. The interest is also economic since online, sellers strive to be ultra-competitive. Competitors from all over the world are just a click away from their potential customers. For merchants too, the platform has an obvious interest: it allows them to reach distant consumer groups. And the Amazon label helps customers who are hesitant to buy from little-known brands: if there is a problem, they know they will be refunded.
AI will revolutionize e-commerce
By developing its house brands, notably Amazon Basics, the group has, however, ventured onto slippery territory where it is becoming a competitor to the commercial side of its customer base. As revealed a Wall Street Journal investigation published last August, the group has been undertaking since 2022 to reduce the scale in this area. Officially, for commercial reasons only. According to the American media, it is above all a question of limiting its exposure to accusations of conflict of interest. More than its house brands, it is the power that Amazon has acquired in online sales which can generate an unbalanced balance of power between the group and its customers. Every quarter since 2019, notes the Bain firmits share of e-commerce spending in the United States is around 40%, which makes it essential.
With artificial intelligence, Amazon will be able to further widen the gap with competing platforms. Because AI will not only benefit its AWS branch, which is fond of new sophisticated digital tools to sell in the form of subscriptions to companies. It will certainly change the face of e-commerce. Amazon has not yet given details on the features it could add to its marketplace using generative AI. He just indicated, in August, that he was starting to deploy a tool summarizing customer reviews thanks to this technology. Instead of going through the comments which sometimes number in the hundreds, Amazon customers will consult a short text, condensing the most important information contained therein.
What artificial intelligence could bring to its platform, however, is easy to imagine. Generative AI is indeed capable of creating photos and even product advertising videos in just a few seconds, generating spectacular settings or larger-than-life virtual humans. They can also write product sheets in succession: you just have to make them swallow the technical sheet so that they can decline it, on the desired number of lines in a wide variety of styles – sustained, humorous, for a teenage target, etc. . The new generation of AI will undoubtedly also allow brand chatbots, these small conversational robots, to respond much more intelligently to customers with a question or complaint about a product. Enough to give Amazon an additional head start over its competitors.
The FTC against Gafam
Amazon has strongly denied the FTC’s accusations. “The complaint filed today demonstrates that the FTC has radically moved away from its mission to protect consumers and competition. The practices called into question by the FTC have allowed us to stimulate competition and innovation in the sector of retail trade, making it possible to broaden the scope of the offer, lower prices, and shorten delivery times for Amazon customers, and to offer greater opportunities to the many companies that sell on the store Amazon. […] The complaint filed by the FTC today is erroneous in fact and in law, and we are waiting to be able to present our arguments in court” indicates the group. Who will prevail? The American competition watchdog has started a lot of battles against Gafam since the arrival of its president Lina Khan in 2021. But it has also suffered several setbacks. Last February, the FTC failed to block the purchase of the virtual reality application publisher Within by Meta. Five months later, the courts rejected the FTC’s request to block another large-scale acquisition: that of Activision Blizzard by Microsoft.