Fighting Monopoly Will Require Collective Power

Where independent producers are allowed to collaborate, they gain leverage. Rural organizations like the Farmers’ Alliance and the Grange formed producers’ cooperatives that enjoyed significant bargaining power in their dealings with railroads and agricultural middlemen. These efforts formed the basis for later co-op brands like Cabot Creamery and Land O’Lakes, as well as for the New Deal–era electric cooperatives that still bring electricity to 42 million Americans.

Collective power is even more relevant in the internet age. For some time, courts and public-policy makers have been wrestling with whether ride-hailing drivers, whom Uber and Lyft treat as independent contractors, should be reclassified as employees and gain the rights that come with that status. A California Supreme Court ruling has nudged the state’s legislature in that direction. Yet converting drivers into Uber employees isn’t the only option. An intriguing new bill proposed by the SEIU-affiliated United Healthcare Workers West puts forth another possible arrangement—establishing a new category of cooperative, worker-owned companies that would supply labor to gig-economy platforms. Drivers and other gig-economy workers would be employees of these cooperatives, which would negotiate with Uber, Lyft, and other platforms to set contract terms, such as wages and working conditions. (This approach may be aided by the fact that federal law allows state legislators to protect co-ops from antitrust enforcement, as long as legislatures authorize and supervise their activities.)

Another kind of collective power could transform the governance of the Amazon Marketplace in which 2.5 million third-party sellers participate. While the Marketplace offers new opportunities for small sellers around the world, it also leaves them subject to Amazon’s whims. Sellers of most products pay Amazon 15 percent of every sale and can be removed from the platform, or banished to the bottom of search results, for any reason at all. They are at the mercy of rules set by Amazon and, in the event of a legal dispute, forced into individual arbitration.

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Even while sellers are at the mercy of Amazon, they often resort to unfair and unethical practices against one another as a means of obtaining a competitive advantage, however fleeting. These tactics include submitting fake reviews of rivals’ products and making specious trademark-infringement allegations. Although Amazon does punish the worst of these tactics, it benefits immensely from pitting independent sellers against one another.

Organized sellers could build their own cooperative online commerce platform—or at least wield real power against Amazon. An association of sellers could negotiate a lower cut for Amazon, and members could keep 90 or 95 percent of their sales revenue, instead of the typical 85 percent. They could also establish dispute-resolution processes with more transparent rules. Much like what labor unions do with employers, collective power among sellers would transfer some power from Amazon’s executives and shareholders to the people whose daily exertions actually make the platform work.



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