Local Schools Getting Ripped Off By Amazon, Part Infinity
A detailed investigation released Thursday reveals that the e-commerce behemoth Amazon is using its market dominance and political influence to gain a foothold in local governments' purchasing systems, locking school districts into contracts that let the corporation drive up prices for pens, sticky notes, and other basic supplies.
The new report by the Institute for Local Self-Reliance (ILSR), titled Turning Public Money Into Amazon’s Profits: The Hidden Cost of Ceding Government Procurement to a Monopoly Gatekeeper, is based on purchasing records from nearly 130 cities representing more than 50 million Americans.
ILSR found that "cities, counties, and school districts spent $2.2 billion with Amazon in 2023—a nearly fourfold increase since 2016."
"Through its Amazon Business platform, the company has maneuvered to become the default source for office products, classroom materials, cleaning supplies, and other routine goods," the report states. "Today, it is embedded in most local governments, making inroads into state agencies, and dominating a new program designed to reshape how federal agencies buy commercial products."
Unlike the fixed pricing that's typical for government contracts, the agreements that Amazon has secured with local governments across the US entail "algorithm-driven pricing" to "covertly raise prices and inflate costs for governments."