Monopoly

CP's Partner: You've got that look in your eyes again.
CP: Which look?
CPP: The thousand yard stare. The one where you're either contemplating rearranging the shelves again, or you've struck on an idea for a post.
CP: The latter.
CPP: Okay. Let's flesh it out.
CP: What would happen if Amazon decided to purchase Visa?
CPP: They'd prefer all transactions take place with a Visa card.
CP: Right. First they'd tell Congress it is not a conflict of interest for a retailer to own a credit card company. Then, in practise, Amazon would offer discounts to buyers if they use a Visa card, probably in the form of a percentage or cash back. Eventually, as the novelty of the news fades, people will realise that Amazon no longer contracts with American Express or Discover. If you want to use those cards, Amazon's online shopping is unavailable to you; you'd have to shop at smaller online or terrestrial retailers. Now, in order to shop at Amazon, you are obligated to sign up for a Visa card. If you want to sell on Amazon, your other business outlets would be required to accept Visa. Amazon gets the credit card fees, the business sale, the transaction fees from the credit card, and the interest.
CPP: Sounds about right. . . and oddly familiar. Now where have we heard this story before? she asked sardonically.
CP: Any pharmacy company that owns an insurance company, a mail order facility, and a PBM. It's vertical monopolization. Patients have an insurance that dictates which pharmacy they may use. There is often a contract of which they are unaware that may mandate mail order, through their wholly-owned subsidiary. All of the money is ultimately collected by one company.
CPP: Well that hardly sounds phair. I can understand an in-network vs. an out-of-network hospital or provider, but didn't people voice these same complaints when the mergers and acquisitions were first proposed?, she asked rhetorically. . .
CP: Right you are, Ken! Indeed they did. And guess what happened?
CPP: Congress and the courts believed the companies when they were told "no, we'd never do that!"?
CP: Yes. As if they hadn't considered it before the courts mentioned it to them, this is precisely what happened.
CPP: So you foresee Amazon, in a theoretical phuture, acquiring its own credit card company, then, at some date in the phurther phuture, mandating that all businesses must go through that credit card company to get to Amazon?
CP: It's purely hypothetical. But there is a precedent for it.
CPP: A phunny thing happened on the way to the phorum.
CP: Oh Yeah?
CPP: The day after you wrote this, Amazon announced a new credit card for low-income customers. It's offered through Synchrony Bank. And they also offer a Visa card. Perhaps your postulations are a little too eerily prescient.
CP: Perhaps. We shall see. Let's just continue to be outraged by the vertical monopolization of pharmacy right now.
CPP: Right. So Amazon can crash that party soon too.
CP: Exactly.