Amazon's marketplace looks like a competitive bazaar. It isn't. The company has built a fee structure that functions as a price floor for the entire US e-commerce market, and the mechanism is remarkably simple: charge sellers so much they must raise prices, then forbid them from charging less anywhere else. The fee stack has ballooned. In 2014, Amazon took roughly 19% of each sale. Today, many sellers hand over close to half. The baseline 15% referral commission is comparable to eBay and Walmart. What pushes the total toward 50% are the fees that are technically optional but functionally mandatory: fulfillment through Amazon's warehouses (required for Prime eligibility, which the FTC calls "a virtual necessity for doing business on Amazon") and advertising (the sponsored slots that dominate search results). Sellers who skip these services don't save money — they disappear. The critical lever is Amazon's Fair Pricing Policy. If a seller lists a product cheaper on their own website, on Target, on Walmart, or anywhere else, Amazon can strip the Buy Box — the "Add to Cart" button — or suspend the seller entirely. This has been documented repeatedly: in 2024, sellers told CNBC they lost the Buy Box after Target discounted their products. California's attorney general alleges Amazon pressured brands to get Walmart and Target to raise prices. One seller was suspended over a one-cent price gap with Target. The economic logic is airtight and ugly. Sellers must cover Amazon's ~50% take plus their own costs (manufacturing, shipping to warehouses, staff). They raise prices on Amazon. The Fair Pricing Policy forces them to raise prices everywhere else to match. The referral fee is a percentage of the sale price, so when prices go up, Amazon's cut goes up too — a self-reinforcing extraction loop. Market competition should discipline this. It can't. Amazon controls roughly 40% of all US online retail sales. For most sellers, leaving Amazon means abandoning their largest sales channel. And because prices are forced to parity across all channels, consumers have nowhere cheaper to go even if they never visit Amazon. The company has effectively set a price floor for the internet. The FTC and 17 US states sued Amazon in 2023, alleging illegal monopoly maintenance through exactly these mechanisms: punishing sellers who offer lower prices elsewhere, compelling use of Amazon's warehouses, and charging ever-escalating fees. The trial is set for next year. In Europe, Germany has ordered Amazon to stop controlling seller pricing, though the decision isn't final. Amazon denies wrongdoing. This is the textbook endgame Cory Doctorow calls enshittification: a platform that once served users now extracts from everyone in its ecosystem — sellers, consumers, and competing retailers — while using its scale to make exit nearly impossible. The question isn't whether this is happening. It's whether any institution has the power and will to stop it.
