"The Everything War" describes how Amazon causes price inflation

The big picture: The book echoes the allegations in the antitrust lawsuit the Federal Trade Commission filed against the retail giant last year, and offers an inside look at how that price inflation happens. (Amazon disputes the portrayal.)

Flashback: For a long time, Amazon was a source of disinflation, a place where you could get the lowest prices around, per the book.

• For years, the company undercut the competition to build market share — it didn't need to make money in its retail business thanks to the steady stream of profits coming from its cloud computing arm.
• FTC commissioner Lina Khan criticized this strategy as "predatory pricing," in a now-famous paper she wrote when she was a student at Yale Law School.

Once it achieved scale — Amazon now makes up about 40% of all online retail — the company started raising prices on the products it sells directly.

• It also started charging the businesses that sell products on the site's marketplace "monopoly rent," says Mattioli, who spoke to Axios ahead of the book's publication.

The fine print: Amazon charges sellers fees, and they've gotten more onerous over the years, she writes.

• Nearly 50% of sellers' revenue goes to Amazon in fees, she reports — the FTC lawsuit has a similar number. They pass those charges on to customers through higher prices.
• The fees include a commission to Amazon, as well as fees for advertising on the platform and to use the company's logistics service.
• Though the latter two services are technically optional, sellers told Mattioli that if they don't pay, they'll see lower sales. That's an allegation the FTC also makes in its lawsuit.

The intrigue: For years, Amazon contractually required that sellers list on Amazon at their lowest price, Mattioli writes.

• It's not clear if the company still does this, but sellers told Mattioli that if they raise prices on Amazon, they also set them higher on Walmart.com and other sites.
• The company also used Project Nessie, an algorithm that the FTC alleges it used to identify specific products it could charge more for — that would drive other retailers to follow. The suit says Amazon has stopped using it.

For the record: "Amazon selling fees are 15% or less in most product categories," a spokesperson tells Axios, and they provide sellers with "powerful capabilities and services."

• Other services are optional and less expensive than other options. Amazon says its fulfillment services are 70% less expensive than two-day shipping methods offered by other logistics providers.
• The idea that Amazon is now charging higher prices is "not true," a spokesperson told Axios in an email. Amazon "always has and always will continue to work hard every day to offer low prices."
• The spokesperson pointed to a study that found Amazon has the lowest prices across online retail.
• The company also says it fundamentally disagrees with the FTC's allegations, "which are in many cases wrong or misleading."

The bottom line: Amazon isn't just an online retailer. It's a huge company with its hands in cloud computing and AI, logistics, and media, with the kind of pricing power that businesses envy and trustbusters abhor.