Amazon, faced with hostile state and federal government entities suspicious of its business model and pretty much convinced that Amazon is engaged in anti-competitive behavior, plans to spend $15 billion to prove them wrong.

According to a story in the Seattle Times, Amazon will spend the money this year “on a range of initiatives to better support small-business sellers, and touted scores of tools and services it has released this year to help them compete in its complex, automated marketplace and fulfillment system.”

Bloomberg reports that the money “includes spending on portions of the company’s warehouse network dedicated to storing and shipping sellers’ items as well as salaries for the engineers, managers and support staff who operate the digital marketplace and deal with individual merchants. It also includes the cost of developing new services, such as a dashboard that helps sellers decide what new products to carry, and a revamped training program.”

The move, according to the Times, “serves to highlight what has become a fast-growing business for Amazon. Third-party sellers paid the company $23.1 billion in commissions, shipping and fulfillment fees and for other services through the first half of 2019. That’s up 21.8% from the same period in 2018.” CEO/founder Jeff Bezos has said that “sales of physical merchandise on Amazon by third parties, mostly small and mid-sized businesses, reached 58% of the company’s total last year, amounting to $160 billion.”

KC's View: It makes a lot of sense for Amazon to spend this money - which isn’t even that much by Amazon standards, though that’s easy for me to say since it ain’t my money - making moves that can be interpreted as being pro-competition. The idea, I suppose, is to take a little of the starch out of the accusations that are going to be leveled at it by politicians from both sides of the aisle.

But beyond that, I think that the more Amazon can help third-party vendors use its site effectively, the better it is for everyone. We know that the courts have ruled that Amazon is culpable for products sold on its site even by third parties, and so it behooves the company to strengthen its controls and transparency - it needs to have systems in place that will track where products are from and what is in them and that the claims vendors make are rooted in fact. To eliminate counterfeits, $15 billion is probably just a good start.

But you have to start somewhere.