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Amazon's price war is 'good for consumers and bad for everyone else,' says NYU Professor

Amazon.com founder and CEO Jeff Bezos
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Amazon.com founder and CEO Jeff Bezos

Amazon's ceaseless effort to beat competitors on price is really good for the company and consumers — but ultimately bad for everyone else, NYU Stern Professor Scott Galloway, told CNBC on Wednesday.

"They are inspired with 500 million consumers, fanatical investors that fund this to declare war on brands," said Galloway.

Galloway says Amazon's move into pharmaceuticals is going to drive down prices, making it difficult for anyone else to compete. "Amazon has algorithms that go out and look for the lowest price per ounce ... then demand that their brands offer that same price or better per ounce in any package or within a nano second, or they will kick you off," said Galloway.

"I can't imagine they won't be in this $300 billion sector, and its going to be good for Amazon and shareholders, good for consumers and bad for everyone else in the ecosystem," he said.

This isn't the first time the company has offered pharmaceuticals. Amazon backed Drugstore.com back in the 1990s, the company later sold to Walgreens, which eventually shut it down. But there are still some potential challenges for Amazon as it jumps back into this arena.

"Complexity and regulation typically benefits the people who have figured out the incumbent players. This will be bad for the manufacturers brands of pharmaceuticals. When Amazon comes into a category, you see universal margin pressure across the entire ecosystem," said Galloway.

"Amazon is good at figuring out a complicated problem, and then making a small amount of money taking huge share, growing their share price and have everyone else take a beating," he said.