Welcome to GAFA land—where the winner takes it all

By Susanne Wixforth – Amazon symbolizes the four platform giants, also known as GAFA (Google, Apple, Facebook and Amazon). The company is Europe’s largest platform retailer and its turnover is twice as high as that of its 20 largest competitors. While Amazon´s chief executive earned 2.16 million dollars per hour in 2017, its workers must be grateful if they receive the statutory minimum wage, which in the EU varies between €1.42 and €11.27 per hour.

In 2018, Amazon generated a turnover of about 210 billion euro worldwide, an increase of over 30 per cent on the previous year’s. The company has more than 600,000 employees across the globe. With a market capitalization of more than 730 billion euro, it is one of the most valuable listed companies. Its operating profit amounts to around 11 billion euro. Nevertheless, thanks to a ruling it had agreed on in advance with the tax authorities of Luxembourg, Amazon did not pay taxes on 75 per cent of its turnover between 2003 and 2014.

In the long run, the platform economy not only poses a risk to the stability and budgets of countries where the corporations earn their money but do not pay taxes—it also undermines social cohesion.

Amazon generates its turnover mainly through four channels: as one of the biggest online retailers, as the operator of by far the largest online marketplace for third-party suppliers, as one of the largest providers of online services and as the distributor of the ordered products.

Because of its large market power in some trading segments, independent traders depend on Amazon to reach their customers. There is evidence that Amazon is trying to force traders out through its sheer market power, for instance through copying products and undercutting prices. more>

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