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Walmart to Vendors: Get Off Amazon's Cloud (wsj.com)
Amazon vs. Walmart saga continues. It turns out, Walmart isn't thrilled about its partners using Amazon's cloud, and it's telling them to get off it (alternative source). From a report: Walmart is telling some technology companies that if they want its business, they can't run applications for the retailer on Amazon's leading cloud-computing service, Amazon Web Services, several tech companies say. [...] Walmart, loath to give any business to Amazon, said it keeps most of its data on its own servers and uses services from emerging AWS competitors, such as Microsoft's Azure.
vertical, where the company controls every aspect from beginning to end as much as possible and dictates all aspects of everything that the company deals with.
No. Horizontal integration can make you a monopoly. Vertical integration does not, unless you horizontally dominate at least one of the layers. Having dominating power over suppliers is not a monopoly, it is a monopsony.
Before anyone starts ranting that Walmart is not a monopoly, there are two kinds of monopolies. Horizontal where the company controls a particular step of the process across the entire market, and vertical, where the company controls every aspect from beginning to end as much as possible and dictates all aspects of everything that the company deals with.
Poppycock.
The notion of a vertical monopoly does exist, but it's used to describe a monopoly (controller of nearly 100% of a market) that achieved its monopoly status through vertical integration. It is not the case that any vertically-integrated company is a monopoly, even if they have achieved total vertical integration. As long as there is still substantial competition at each level in the supply chain, it isn't a monopoly in any of them. If competition has effectively been eliminated at any level in the supply chain, then the company is a monopoly at that level regardless of how integrated they are at other levels.
Wal-mart might well be a regional monopoly, in the sense that there are regions of the country where they have driven all competing retailers out of business, but they're not a monopoly in general. And it's further possible that they'll eventually leverage vertical integration to become a general monopoly. But they're not now.
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You've misunderstood what the article about.
Walmart isn't requiring their Vendors to use Walmarts data and services, they are telling supplies (say of plastic bins) that they can't use Amazon's AWS services for anything including internal server backups or anything else. They are trying to leverage their massive purchasing power to use it against Amazon in another market.
Even if Walmart isn't a monpoly they should not be legally able to require suppliers to avoid all Amazon services including those completely unrelated to retailing as they are using their massive purchasing power as a leverage in outside markets. This is the halmark of what the Sherman anti-trust law tried to prevent, companies with massive leverage using that leverage to displace rivals in unrelated markets. AWS is an unrelated market to Walmart, they do not offer services in the web services market.
Contract terms requiring suppliers not use AWS for internal company services should be illegal as it's an attempt to leverage market share to harm a rival in an orthogonal market. These kind of actions dramatically harm the free market.