Pluralistic: The whole economy pays the Amazon tax (25 Feb 2026)


Today's links


A giant pile of money bags; climbing out of it is the bear from the California state flag. The background is an Amazon box, with the smile logo pointing in the opposite direction to the bear's motion.

The whole economy pays the Amazon tax (permalink)

Selling on Amazon is a tough business. Sure, you can reach a lot of customers, but this comes at a very high price: the junk fees that Amazon extracts from its sellers amount to 50-60% of the price you pay.

That's a hell of a lot of money to hand over to a middleman, but it's not like vendors have much choice. The vast majority of America's affluent households are Prime subscribers (depending on how you define "affluent household" it's north of 90%). Prime households prepay for a year's worth of shipping, so it's only natural that they start their shopping on Amazon, where they've already paid the delivery costs. And because Amazon reliably meets or beats the prices you'd pay elsewhere, Prime subscribers who find a product on Amazon overwhelmingly stop their shopping at Amazon, too.

At this point you might be thinking a couple things:

I. Why not try to sell the non-affluent households, who are far less likely to subscribe to Prime? and

II. If Amazon has the lowest prices, what's the problem if everyone shops there?

The answers to these two questions are intimately related, as it happens.

Let's start with selling to non-affluent households – basically, the bottom 90% of American earners. The problem here is that everyone who isn't in that top 10% is pretty goddamned broke. It's not just decades of wage stagnation and hyperinflation in health, housing and education costs. It's also that every economic crisis of this century has resulted in a "K-shaped" recovery, in which "economic recovery" means that rich people are doing fine, while everyone else is worse off than they were before the crisis.

For decades, America papered over the K-shaped hole in its economy with debt. First it was credit cards. Then it was gimmicky mortgages – home equity lines of credit, second mortgages and reverse mortgages. Then it was payday lenders. Then it was "buy-now/pay-later" services that let you buy lunch at Chipotle on an installment plan that is nominally interest-free, but is designed to trap the unwary and unlucky with massive penalties if you miss a single payment.

This produced a median American who isn't just cash-poor – they are cash-negative, drowning in debt. And – with the exception of a brief Biden intercession – every presidential administration of the 21st century has enacted policies that favor creditors over debtors. Bankruptcy is harder to declare, and creditors can hit you with effectively unlimited penalties and confiscation of your property and wages once your cash is gone. Trump has erased all the small mercies of the Biden years – for example, he just forced 8,000,000 student borrowers back into repayment:

https://prospect.org/2025/12/16/gop-forcing-eight-million-student-loan-borrowers-into-repayment/

The average American worker has $955 saved for retirement:

https://finance.yahoo.com/news/955-saved-for-retirement-millions-are-in-that-boat-150003868.html

There's plenty to worry about in a K-shaped economy – big things like "political instability" and "cultural chaos" (the fact that most people are broke has a lot to do with the surging fortunes of gambling platforms). But from a seller's perspective, the most important impact of the K-shaped economy is that only rich people buy stuff. Selling to the bottom 90% is a losing proposition because they're increasingly too broke to buy anything:

https://pluralistic.net/2025/12/16/k-shaped-recovery/#disenshittification-nations

Combine the fact that the richest 10% of Americans all start their shopping on Amazon with the fact that no one else can afford to buy anything, and it's easy to see why merchants would stay on Amazon, even when junk fees hit 60%.

Which brings us to the second question: if Amazon has the best prices, what's the problem with everyone shopping there?

The answer is to be found in the California Attorney General's price-fixing lawsuit against Amazon:

https://oag.ca.gov/news/press-releases/attorney-general-bonta-exposes-amazon-price-fixing-scheme-driving-costs

The suit's been running for a long time, but the AG's office just celebrated a milestone – they've finished analyzing the internal memos they forced Amazon to disgorge through civil law's "discovery" process. These internal docs verify an open – and very dirty – secret about Amazon: the company uses its power to push up prices across the entire economy.

Here's how that works: sellers have to sell on Amazon, and that means they're losing $0.50-$0.60 on every dollar. The obvious way to handle this is by raising prices. But Amazon knows that its power comes from offering buyers prices that are as low or lower than the prices at all its competitors.

Amazon could ban its sellers from raising prices, but if they did that, they'd have to accept a smaller share of every sale (otherwise most of their sellers would go broke from selling at a loss on Amazon). So instead, Amazon imposes a business practice called "most favored nation" (MFN) pricing on its sellers.

Under an MFN arrangement, sellers are allowed to raise their prices on Amazon, but when they do, they must raise their prices everywhere else, too: at Walmart, at Target, at mom and pop indie stores, and at their own factory outlet store. Remember: Amazon doesn't have to have low prices to win, it just needs to have the same prices as everyone else. So long as prices rise throughout the economy, Amazon is fine, and it can continue to hike its junk fees on sellers, knowing that they will pay those fees by raising prices on Amazon and everywhere else their products are sold.

Like I say, this isn't really a secret. MFN terms were the basis of DC Attorney General Ken Racine's case against Amazon, five years ago:

https://pluralistic.net/2021/06/01/you-are-here/#prime-facie

Amazon's not the only company that does this. Under the Biden administration, the FTC brought a lawsuit against Pepsi because Pepsi and Walmart had rigged the market so that when Walmart raised its prices, Pepsi would force everyone else who carried Pepsi products to raise their prices even more. Walmart still had the lowest prices, but everything everywhere got more expensive, both at Walmart and everywhere else:

https://www.thebignewsletter.com/p/secret-documents-show-pepsi-and-walmart

Trump's FTC dropped the Pepsi/Walmart case, and Amazon wriggled out of the DC case, but the California AG's office has a lot more resources than DC can muster. This is a timely reminder that America's antitrust laws can be enforced at the state level as well as by the federal authorities. Trump might be happy to let Amazon steal from Americans so long as Jeff Bezos neuters the Washington Post, writes a check for $1m to sit on the inaugural dais, and makes a garbage movie about Melania; but that doesn't stop California AG Rob Bonta from going after Amazon for ripping off Californians (and, in so doing, develop the evidentiary record and precedent that will allow every other state AG to go after Amazon).

The fact that Amazon's monopoly lets it control prices across the economy highlights the futility of trying to fix the Amazon problem by shopping elsewhere. A "boycott" isn't you shopping really hard, it's an organized movement with articulated demands, a theory of change, and a backbone of solidarity. "Conscious consumption" is a dead-end:

https://jacobin.com/2026/02/individual-boycotts-collective-action-ice/

Obviously, Californians have more to worry about than getting ripped off by Amazon (like getting murdered or kidnapped by ICE agents who want to send us all to a slave labor camp in El Salvador), but the billions that Amazon steals from American buyers and sellers are the source of the millions that Bezos uses to support Trump's fascist takeover of America. Without billionaires who would happily support concentration camps in their back yards if it means saving a dollar on their taxes, fascism would still be a fringe movement.

That's why, when we hold new Nuremberg trials for Trump and his collaborators, we should also unwind every merger that was approved under Trump:

https://pluralistic.net/2026/02/10/miller-in-the-dock/#denazification

The material support for Trump's ideology of hate, violence and terror comes from Trump's program of unregulated corporate banditry. A promise to claw back every stolen dime might cool the ardor of Trump's corporate supporters, and even if it doesn't, zeroing out their bank-balances after Trump is gone will be an important lesson for future would-be billionaire collaborators.

Hey look at this (permalink)


A shelf of leatherbound history books with a gilt-stamped series title, 'The World's Famous Events.'

Object permanence (permalink)

#20yrsago Princeton prof explains watermarks’ failures https://blog.citp.princeton.edu/2006/02/24/how-watermarks-fail/

#20yrsago Palm Beach County voting machines generated 100K anomalies in 2004 https://web.archive.org/web/20060225172632/https://www.bbvforums.org/cgi-bin/forums/board-auth.cgi?file=/1954/19421.html

#15yrsago Sharing the power in Tahrir Square https://www.flickr.com/photos/47421217@N08/5423296010/

#15yrsago 17-year-old Tim Burton’s rejection from Walt Disney Productions https://web.archive.org/web/20110226083118/http://www.lettersofnote.com/2011/02/giant-zlig.html

#15yrsago Rare Alan Turing papers bought by Bletchley Park Trust https://web.archive.org/web/20110225145556/https://www.bletchleypark.org.uk/news/docview.rhtm/635610

#15yrsago Sony considered harmful to makers, innovators and hackers https://web.archive.org/web/20151013140820/http://makezine.com/2011/02/24/sonys-war-on-makers-hackers-and-innovators/

#15yrsago MPAA: record-breaking box-office year is proof that piracy is killing movies https://arstechnica.com/tech-policy/2011/02/piracy-once-again-fails-to-get-in-way-of-record-box-office/

#15yrsago Super-wealthy clothes horses and their sartorial habits https://web.archive.org/web/20110217045201/http://online.wsj.com/article/SB10001424052748704409004576146420210142748.html

#15yrsago Visualizing the wealth of America’s super-rich ruling class https://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph/

#10yrsago Obama’s new Librarian of Congress nominee is a rip-snortin’, copyfightin’, surveillance-hatin’ no-foolin’ LIBRARIAN https://www.youtube.com/watch?v=iU8vXDoBB5s

#10yrsago Math denialism: crypto backdoors and DRM are the alternative medicine of computer science https://www.theguardian.com/technology/2016/feb/24/the-fbi-wants-a-backdoor-only-it-can-use-but-wanting-it-doesnt-make-it-possible

#10yrsago Uganda’s corrupt president just stole another election, but he couldn’t steal the Internet https://web.archive.org/web/20160225095947/https://motherboard.vice.com/read/uganda-election-day-social-media-blackout-backlash-mobile-payments

#10yrsago Archbishop of St Louis says Girl Scout Cookies encourage sin https://www.theguardian.com/us-news/2016/feb/23/girl-scouts-cookies-missouri-catholics-st-louis-archbishop

#10yrsago After appointed city manager illegally jacked up prices, Flint paid the highest water rates in America https://eu.freep.com/story/news/local/michigan/flint-water-crisis/2016/02/16/study-flint-paid-highest-rate-us-water/80461288/

#10yrsago Baidu browser isn’t just a surveillance tool, it’s a remarkably sloppy one https://citizenlab.ca/research/privacy-security-issues-baidu-browser/

#5yrsago Why Brits can no longer order signed copies of my books https://pluralistic.net/2021/02/24/gwb-rumsfeld-monsters/#brexit-books

#5yrsago Court rejects TSA qualified immunity https://pluralistic.net/2021/02/24/gwb-rumsfeld-monsters/#junk-touching

#5yrsago The Mauritanian https://pluralistic.net/2021/02/24/gwb-rumsfeld-monsters/#gwb-and-gitmo

#5yrsago EVs as distributed storage grid https://pluralistic.net/2021/02/24/gwb-rumsfeld-monsters/#mobile-batteries

#5yrsago Bossware and the shitty tech adoption curve https://pluralistic.net/2021/02/24/gwb-rumsfeld-monsters/#bossware

#1yrsago How an obscure advisory board lets utilities steal $50b/year from ratepayers https://pluralistic.net/2025/02/24/surfa/#mark-ellis

Upcoming appearances (permalink)

A photo of me onstage, giving a speech, pounding the podium.


A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


A grid of my books with Will Stahle covers..

Latest books (permalink)


A cardboard book box with the Macmillan logo.

Upcoming books (permalink)

  • "The Reverse-Centaur's Guide to AI," a short book about being a better AI critic, Farrar, Straus and Giroux, June 2026

  • "Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2026

  • "The Post-American Internet," a geopolitical sequel of sorts to Enshittification, Farrar, Straus and Giroux, 2027

  • "Unauthorized Bread": a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2027

  • "The Memex Method," Farrar, Straus, Giroux, 2027


Colophon (permalink)

Today's top sources:

Currently writing: "The Post-American Internet," a sequel to "Enshittification," about the better world the rest of us get to have now that Trump has torched America (1020 words today, 37190 total)

  • "The Reverse Centaur's Guide to AI," a short book for Farrar, Straus and Giroux about being an effective AI critic. LEGAL REVIEW AND COPYEDIT COMPLETE.

  • "The Post-American Internet," a short book about internet policy in the age of Trumpism. PLANNING.

  • A Little Brother short story about DIY insulin PLANNING

This work – excluding any serialized fiction – is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

How to get Pluralistic:

Blog (no ads, tracking, or data-collection):

Pluralistic.net

Newsletter (no ads, tracking, or data-collection):

https://pluralistic.net/plura-list

Mastodon (no ads, tracking, or data-collection):

https://mamot.fr/@pluralistic

Medium (no ads, paywalled):

https://doctorow.medium.com/

Twitter (mass-scale, unrestricted, third-party surveillance and advertising):

https://twitter.com/doctorow

Tumblr (mass-scale, unrestricted, third-party surveillance and advertising):

https://mostlysignssomeportents.tumblr.com/tagged/pluralistic

"When life gives you SARS, you make sarsaparilla" -Joey "Accordion Guy" DeVilla

READ CAREFULLY: By reading this, you agree, on behalf of your employer, to release me from all obligations and waivers arising from any and all NON-NEGOTIATED agreements, licenses, terms-of-service, shrinkwrap, clickwrap, browsewrap, confidentiality, non-disclosure, non-compete and acceptable use policies ("BOGUS AGREEMENTS") that I have entered into with your employer, its partners, licensors, agents and assigns, in perpetuity, without prejudice to my ongoing rights and privileges. You further represent that you have the authority to release me from any BOGUS AGREEMENTS on behalf of your employer.

ISSN: 3066-764X

Join the Discussion at ChinWag