How Do Consumers Feel About Antitrust Legislation?
Amidst recent efforts by Congress to enact strict antitrust measures on just five technology companies, including Amazon, survey data from a new report challenges the narrative that consumers are unhappy with large online retailers and desire federal intervention.
The report, The Online Shopping Paradox, asked 1,012 consumers about their online shopping experience, the extent to which they use Amazon services, their satisfaction with those services, and whether they would agree with legislative and regulatory efforts to restrict Amazon’s online retail presence.
The empirical results of the online survey are telling.
In stark contrast to the supposed harms big tech has inflicted on online shoppers, the survey found a remarkably high level of consumer satisfaction with Amazon services. For example, 88% of respondents said they had used Amazon online services in the past year, followed by 66% for Walmart and 43% for Target. The average survey respondent also reported using on average five different online shopping websites in the last year, an indication of their propensity to shop and choose between various competitors.
Among Amazon customers, 97% said they were either somewhat satisfied or very satisfied with Amazon Prime services. Only 1% of respondents reported being dissatisfied. In contrast, Ballotpedia’s Polling Index reports the average approval rating of Congress is at a 21% low.
77% of Amazon users said they strongly agreed or somewhat agreed with the statement that “I benefit from shopping at Amazon.” Just 3% strongly disagreed. Similarly, a majority of respondents said that Amazon had “good customer service” and that they “trust Amazon.” Most said they like having “one company” offer multiple services and believed that Amazon Prime, in particular, “saves people money.” Respondents routinely cited affordable prices, free delivery, generous return policies, and a wide variety of other services, as reasons why they choose to use services like Amazon Prime.
The survey also found that consumers are deeply skeptical of efforts to regulate large technology companies if doing so risks jeopardizing Amazon Prime. While the survey found that 22% of respondents strongly agreed that “Amazon is too big,” 52% of Amazon users either opposed or strongly opposed efforts to break up Amazon into smaller companies and 67% of Prime users opposed or strongly opposed legislation that would potentially eliminate Prime services. Only 25% of respondents favored or strongly favored such action.
Based on these consumer responses, it is clear that consumers are weary of the potential for government intervention and attempts to regulate the industry. They rightly worry that antitrust legislation may inadvertently undermine access to benefits and services that they care about.
Consumers should be concerned. There is a high likelihood that Amazon Prime services will be curtailed or eliminated under current proposals by Senator Klobuchar and other fellow co-signers. In order to meet its free 2-day delivery guarantee, Amazon delivers its own products and the products of qualified vendors that meet its standards. Because some vendors cannot meet these standards and because the legislative proposal would require Amazon to provide the same fulfillment services to all vendors, its free 2-day delivery guarantee would be lost. If that leads to the demise of Prime services, its member customers will lose out on tens of billions of dollars in consumer benefits.
Under the proposed rules, Amazon might be viewed as discriminating against certain vendors when it gives better page placement to vendors with lower prices and higher customer rankings, which may push consumers to buy more expensive and risky products. Other provisions may require Amazon to share consumer data with vendors. For instance, these provisions could require Amazon to give consumer credit card and contact information to third-parties without any privacy protections, including to Chinese vendors.
As the survey results show, consumer attitudes are not aligned with the congressional focus on antitrust legislation, especially during high inflation. A new poll released by the Pew Research Center found that 93% of Americans consider inflation to be a “very big problem” or a “moderately big problem,” yet Congress is focused elsewhere. If consumers believe that Prime services save them money, as the survey finds, then putting these services in jeopardy would put upward pressure on consumer prices.
Yes, consumers think Amazon is big; but based on statistically significant empirical evidence, consumers do not want Washington to do something about it. As elections approach, Congress should pay careful attention to issues that consumers and voters care about, like inflation, and not destroy the competitive online marketplace that offers consumers more options at lower prices.
Fixing big tech should not be a consumer priority for Washington.
Steve Pociask and Nate Scherer are with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us on www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.
