If AWS is spun off, then I don't believe retail would be able to survive. Online retail vs. brick and mortar still has a lot of growth left and it won't make sense to spin it off until it grabs an even bigger piece of the pie.
The Amazon retail business would struggle to compete effectively on its own, and would have to work on its weaknesses. As a whole, the economy would be better off.
The essence of US antitrust is consumer harm. If Amazon were broken up the retail arm might die, and consumers would arguably suffer -- they wouldn't receive the subsidies they currently get from AWS, they'd pay more for products and get slower shipping.
To argue that Amazon retail consumers would be better off without the subsidies from AWS takes some slightly more complex logic -- that increased Amazon prices would lead to more competition and so lead to lower prices (or better quality). IMO that argument is tenuous.
If Amazon, having killed off its competition, were to raise prices I think you'd have an argument, but at the "undercutting" stage I think (IANAL) they're safe.
This isn't necessarily a downside for consumers as you might get actual customized retail shops opening up again. This would enable you to get your stuff faster than delivery.
I would love to have a "technical bookstore" back again, for example. Amazon's retail arm imploding would enable that business to return.
Why do people think Amazon retail couldn't survive now without AWS, when it survived just fine before AWS? (And now has Prime, advertising, and 3PS/marketplace fees as a logical part of the Retail/non-AWS unit.)
Having an anchor tenant with "2014" problems in 2010, or "2020" problems in 2015, especially if they roll up to the same CEO as your org, gives the org a huge head start in making software and platforms that will, once 2020 actually rolls around be tremendously compelling to everyone else.
Without Amazon's innovation funnel, AWS will be Rackspace in 10 years (well, maybe Oracle in 5 years). Maybe they'd keep adding more hosted services (Announcing ClickTower, our columnar database as a service!) but that's not innovation.
AWS has the perfect large-scale lab to test things.
At a really high/overly-simplified level, how far off from probability is their retail section? Do they just need to semi-aggressively tweak some margins about 2-3% in maybe their shipping cost/subsidizing department, slow down on R&D/reinvestment into this sector by about 2-3%, and maybe swing their marketplace fees 1% and boom, they are in business?
Or is it more complicated?
I wonder how much fat there is to trim in this sector of their business, if any.
> For contracts with original terms that exceed one year, those commitments not yet recognized were $110.4 billion as of December 31, 2022. The weighted average remaining life of our long-term contracts is 3.7 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.
Even if new business stops, and that revenue extends beyond contracted terms, it should provide a nice cushion.
[1]: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7e... (10-K, page 49)