Amazon’s Imbalance
https://www.forbes.com/sites/brockblake/2019/09/23/amazon-friend-or-foe/#3776e84f7367
Networks and the connections between nodes in a growing internet marketplace are vital in growing small business. When the Amazon juggernaut stops all connections from your small business, the relative power of your company dwindles. This article touches upon Amazon’s responsibility in degrading small businesses that cannot compete against Amazon’s amassed connections. Amazon is encouraging small businesses to sell products through the online retail “to reach new customers and expand,” but when Amazon notices a flourishing company under the umbrella, Amazon begins selling the product itself. As a huge company, they can undercut the small business, take over the demand, and put the competition out of business. Amazon uses a few tactics to create a power imbalance, and most of these techniques revolve around the ability to take advantage of the website’s networks.
As discussed in class, power imbalances can be created when one node has more connections. Not only does Amazon have access to a competitor’s connections, the company also has connections to customers outside of the small business’s scope. Amazon can reel in customers who bought products from other areas of the online store. Because of the abundance of connections from Amazon’s node, a large power imbalance is seen between Amazon and its competition. The clear imbalance of network connections that Amazon has compared to the small businesses selling through the site is exacerbated by the company’s ability to offer better deals to the customers that may not be originally connected to the gigantic node. Furthermore, Amazon controls which products are most likely to be linked to. Unlike the VCG method described in class to determine the importance of links, the Amazon company has control over which links are weighted more heavily. This results in such a large power imbalance, it may be incredibly difficult for small businesses to stay afloat.