If I understand him right, it's a monopoly of perfect competition. The barrier to entry is the big capital needed to start. Think of Airlines, although it requires a big seed capital, it's very competitive and this lower prices and increase quality.

The market is competitive, but it's kind of monopolized by the big guys.

Airlines are horrible. I would happily pay 33% more per ticket to fly on airline that removed 1/3 of the seats (middle aisle) and gave the patrons a little bit of room. I think there's a place for that kind of airline if they market things well and add in a few other accoutrements, even though I believe just giving business guys room to maneuver their laptops without jutting elbow-deep into the fat of their neighbor (or themselves, as the case may be), will win you all the business accounts by itself.

Airlines won't do that, and here's why. As you correctly point out, the seats in the back of the plane are horribly, awfully cramped, making it impossible for business guys to manoeuvre their laptops without elbowing each other. This is intentional, because it induces those businesspeople who are both sufficiently desperate and have the money to spend, to pay for the much higher-margin seats at the front of the plane.

That's the main reason why flying coach is such crap.

So, you might think that removing 1/3rd of the seats and charging 33% more would be a revenue-neutral proposition, but it wouldn't be. Passengers who currently fly at the front of the plane would look at the cosier seats in the back and think "hey, actually -- I can live with that". Business-class passengers won't pay for seats at the front of the plane unless the seats in the back are sufficiently awful. Because the seats at the front of the plane are much higher-margin, the airline would lose money as a result.

(This isn't my own home-brewed conspiracy theory; this is based on reading Harvard Business School case studies. The things one learns whilst studying price discrimination theory during an MBA...)

Have you been on an airline recently? Clumsily regulated oligopolies tend to cause races to the bottom in terms of service and hikes to the top in terms of taxes/fees. No, airlines and ecommerce do not share the same destiny. That said: amazon is just another middle man- it's a marketplace with better information/ reliability. extrapolating competition into the future, other equally trusted marketplaces will arise. Amazons benefits of scale are not infinite, and I don't think amazons competitors need to reach her total scale before having similar cost structures. Tl;dr- don't count out competition yet, I doubt ANYTHING on the Internet is "winner take all..forever".