Digital monopolies like Amazon and Alibaba are the new empires because they don't just sell products; they own the digital infrastructure and data that the global economy runs on.

Just as historical empires controlled land and trade routes, these companies control the platforms, logistics, and data that other businesses need to survive. 

This gives them immense power to set the rules of commerce, dominate markets, and exert influence on a global scale.

The New Feudalism: Digital Landlords and Data Control 

The traditional model of a monopoly focused on a company's control over a single market. The new digital monopolies are different. They act as digital landlords, owning the platforms and infrastructure upon which entire economies are built.

• The Platform as the Empire: Companies like Amazon have evolved from online retailers to a sprawling empire of interconnected services. Amazon doesn't just sell books; it hosts millions of third-party sellers on its marketplace, runs a massive cloud computing service (Amazon Web Services or AWS), manages a global logistics and delivery network, and controls a significant part of the digital advertising market. This gives it a chokehold over the entire value chain, from a product's creation to its delivery to a customer's doorstep.

• The Data Monopoly: These companies collect vast amounts of proprietary data on their users' preferences, behaviors, and buying habits. This data is the most valuable commodity in the modern world. By leveraging this data, they can gain a competitive advantage that is nearly impossible for rivals to match. They can use it to create their own private-label products, which they then promote at the top of their search results, effectively pushing out smaller competitors. In a complaint filed against Amazon, the Federal Trade Commission (FTC) alleged that the company had used its market dominance to raise prices, reduce the quality of service, and unfairly punish third-party sellers.

The Gatekeeper's Power: Setting the Rules of Commerce 

Just as empires of the past imposed taxes and trade rules, digital monopolies act as gatekeepers, setting the terms for who can participate in their ecosystems.

• The "Buy Box" and Fees: Amazon's "Buy Box" is a perfect example of this. It's the button that allows a customer to purchase a product immediately, and it accounts for the vast majority of sales on the platform. Amazon's algorithms favor products that are sold through its own fulfillment service, forcing third-party sellers to use the company's costly logistics network if they want to succeed. This makes it difficult for sellers to compete and allows Amazon to extract a significant portion of their revenue in fees

• The Ecosystem Lock-in: Both Amazon and Alibaba have created massive, integrated ecosystems that are designed to "lock in" both consumers and businesses. Alibaba's ecosystem includes not just e-commerce platforms like Taobao and Tmall, but also a massive financial arm in Alipay, a cloud computing service in Alibaba Cloud, and a global logistics network. This makes it incredibly difficult for a user to leave the ecosystem, as they would have to transfer their financial data, customer reviews, and other valuable information to a new platform.

Global Reach and Lack of Accountability 

Unlike traditional corporations, digital monopolies operate on a global scale that often transcends national borders. This makes them difficult for individual governments to regulate or hold accountable.

• Global Footprint: Amazon's reach extends far beyond the U.S. It operates in dozens of countries, from Europe and Japan to India and Australia. This gives it the power to shape consumer habits and business practices in multiple nations. Similarly, Alibaba's influence is immense in China and across Asia, where its financial services and e-commerce platforms are deeply embedded in the economy.

• Regulatory Challenges: Regulators in the U.S. and Europe are only now beginning to catch up with the unique challenges posed by these companies. Traditional antitrust laws were designed for a different era, and they struggle to address the complex, interconnected nature of these digital empires.

In conclusion, digital monopolies are the new empires. They control not just a product or a service, but the underlying digital infrastructure, data, and platforms that are essential for the modern economy.