Actually we don't. We just need the bureaucracy and judiciary to overturn the last 50 years of subversion of the original intent of the antitrust acts. The appointment of Lina Khan was a good first step on that path. This case is a good second step.
But a new act would make the process a lot simpler. Judicial precedence is powerful and doesn't change quickly or easily. A new law would make precedence for the old law moot.
It does feel like some updating would be helpful. The existing language, for example recognizes that markets are sometimes restricted by geography, that you don't need market domination nationwide to be a monopoly. But it doesn't recognize modern day non-geo boundaries. Like, for example, poor people are mostly stuck in an Android "monopoly" because they can't afford an iPhone. It's a separate market. That's just one example. Captive app stores and their relationship with developers are another. I imagine there's more.
I'm gonna disagree - the original act from 1890, still used, had interpretation issues from the start, which all of the "subversion" you speak of comes from.
It is a difference in how the text is read for sure, but the text is badly written.
It says ""Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. . . ."
The immediate problem with this is easy.
he act does not define restraint of trade, either, so courts were left to define it.
This led, nearly instantly, to limiting the act to those contracts that "unduly" restrict trade using the rule of reason.
"To treat as condemned by the act all agreements under which, as a result, the cost of conducting an interstate commercial business may be increased would enlarge the application of the act far beyond the fair meaning of the language used. There must be some direct and immediate effect upon interstate commerce in order to come within the act."
Standard Oil, quoting Addyston Pipe & Steel Co. v. United States (1899).
Standard Oil also goes into the fact that restraint of trade is not defined anywhere in the act, etc, as further justification.
All that has happened since then is deciding what "unduly" means for this section
At this point, the sherman act is 133 years old. It would be good to update it and make the language less subject to interpretation.
Maybe if they weren't going after FAANG exclusively I could take this seriously and not think it is entirely politically motivated BS. ISP monopolies are 10x more harmful than anything they are going after. They have even taken subsidies and then refused to deliver what they promised to get the subsidy, and kept the money. But all I hear about is cases against Google and Amazon for things that sound to me like a real legal stretch.
Fair play to this reporter for shining a light on all this, especially in relation to the redactions. Hopefully the secret court restrictions are lifted.
This has been pretty obvious for a while. Whenever I do product searches on Amazon the prime eligible results are more expensive by exactly the shipping costs of the non prime vendors.
The only reason I keep it is for the video service which I'm guessing is the same for a lot of people.
Tangentially related, even in YouTube Premium you can still see ads if the content creator embeds ads as part of their content. This seems like double-dipping to me and I am seeing more and more of this.
I consider that stuff part of the content and weigh it appropriately. Creators who get too obnoxious with sponsored content are dropped from my subscriptions.
The creators I tend to watch the most these days either don’t have sponsorships or they only run their ad at the end of the video in which case I just stop watching or click to the next video.
I love the take that talking about a sponsor isn't an ad. <facepalm>
Even the lame concept of throwing up Pateron supporter's names on the video for mere frames scrolling by is just moronic to me. Do people really think they are special for having their username flashed on a screen? What value/meaning is derived from this?
They can say "thanks to all my supporters". it's just fallacy to think the creator actually cares. it's a simple copy&paste from a list from their patreon (or whatever) to the text editor of their editing software. it's even less if they aren't even the ones doing the editing. sure, they all say "we love our supporters". it's just like people that donate to NPR so they can have their names read out over the air.
how is their sincerity (more to the point, lack thereof) confusing to you?
> They can say "thanks to all my supporters". it's just fallacy to think the creator actually cares.
How deeply cynical and also, besides the point; even if you believe all creators don't give a shit (I believe many do), people still like being thanked.
what you call cynical, I call naive on your part. We clearly have different opinions on creators and their level of sincerity towards supporters. i hold them just this side of influencers. i understand that they may depend on the support, but it's not like adding someone's name on a screen for .5 seconds means "they care about me". it just means they're fulfilling some obligation they used to entice people to donate. people that decide "because my name will be on the video for .5s" is what pushes to donate is beyond silly.
Is Instacart an Amazon replacement for you? Generally, if I can buy something at a store within 15 minutes of me I'll usually just make the drive to buy it rather than going to Amazon. I use Amazon for the things that I generally can't get locally (such as heavy duty floating shelf brackets that I bought recently. No idea what store sells those near me).
But the idea of replacing Amazon with Instacart is definitely intriguing to me
Try a local hardware store, not a big-box like Home Depot or Lowes, though they’re likely to have it too! I’ve found that so long as I am patient, local hardware stores are happy to order things for me.
Amazon is great at instant gratification and that’s about it IMO.
The “hidden tax” described in the article is to sellers, not consumers. Free shipping is subsidy for consumers that costs Amazon billions of dollars. I have personally never seen what you’re describing.
Which products do you observe this for specifically? I buy from Amazon US all the time and I can’t say I’ve ever noticed that discrepancy, so I can only assume we’re looking at different products or from a different region.
While this varies by territory, I'm UK based, I find the main benefits of Prime to be the next-day (even weekend) delivery, Saturday (even if not next day) delivery, and sometimes the locker delivery option.
Even where prime price is the same as other+delivery this wins out. Though at each price rise or other change I have to rethink if I consider I'm getting a good deal.
Though, to be fair, the switching cost for a consumer to start using Target.com (for example) isn't that high. I go to vendors like Target.Com, HomeDepot.Com, BestBuy.com and AliExpress.com for most of the things I used to use Amazon for.
The issue here is that Amazon's behavior makes the switching cost higher than it would otherwise be. You are penalized for the existence of Amazon even if you don't use Amazon.
Sometimes things take a few days longer, but no real problems. Target and HomeDepot also both allow "third party sellers" so there's the same clutter issue, though it's not nearly as bad as Amazon.
The TL;DR is that the “hidden tax” is onerous advertising fees paid by third-party retailers to have their products appear high in search results.
I don’t really see the issue here, since this appears to be a win-win for both consumers and sellers. Consumers get the cheap stuff they want with free shipping, and sellers get access to hundreds of millions of customers and the volume of sales needed to survive in a low-margin business. The fact that sellers are willing to pay these fees suggests that’s it worth it for them to be on Amazon. If it wasn’t worth it, they would be somewhere else.
You pay these fees so the products aren't cheap. And Amazon (using its size) made it impossible for sellers to sell their products cheaper elsewhere.
This is anticompetitive.
> You pay these fees so the products aren't cheap.
Except they are, otherwise consumers wouldn't use Amazon. Whenever I want to buy anything, I check Amazon first. 9 times out of 10 it's the same price as every other retailer with the added benefit of free shipping and free returns. If that wasn't the case, I would have no reason to use Amazon.
> Whenever I want to buy anything, I check Amazon first. 9 times out of 10 it's the same price as every other retailer with the added benefit of free shipping and free returns.
That's the problem! The issue is that Amazon forces sellers to raise their prices elsewhere, so that Amazon is the best deal for a shopper. But if Amazon didn't have the power to do that (if it didn't have a monopoly as the gateway to online shopping) then other retailers would be able to lower their prices.
That's the "tax" referred to in the article. By inflating prices across the board, but still ensuring that they're the least expensive option, Amazon retains customers and increases profits. Individual consumers choose it because it's the best deal, but the system as a whole loses out because prices are higher than they "should" be.
I'm a consumer who uses Amazon for 90% of their online shopping and let me tell you: I'm not doing it because Amazon is cheap. In recent years more often than not, Amazon isn't actually the cheapest option except for the occasional deal for a subpar product they want to remove from their inventory (but these would be cheap in brick and mortar stores too). Even the deals are largely bogus: "Prime Day" largely exists to buy Amazon equipment at a more reasonable price point and the rest of the time the deals are either for "stocking fillers" (i.e. the kind of stuff you'd find in the discount bin at the supermarket) or noname white label dropshipping products you can barely tell apart from the real deal until they arrive.
I don't use Amazon because it's cheap. I use it because it's convenient. I can do 99% of my non-groceries shopping on Amazon and I get 30 day free returns on most products and next day delivery for some of them, not to mention free shipping on most things I buy (or near-free shipping if you consider the cost of Prime).
What's been pushing me away from Amazon recently is that they're not very good (or even increasingly worse) for some categories of products and in many cases search results are cluttered by Chinese dropshipping products to the point I can't find trustworthier brands at all or for categories I'm less familiar with have to do research to figure out which brands actually exist outside of Amazon's Chinese dropshipping hell. And again because of the free returns (and in the case of non-free returns the A-to-Z guarantee still often resulting in free returns or full refunds) this is not a cost issue but more about the reduction in convenience.
Mind you, I live in Germany and German Amazon is likely different. But Amazon is still the biggest online retailer here despite not being the cheapest. Arguably it still maintains the illusion of being the cheapest because of the free shipping (if you pay for Prime) and the constant barrage of "deals".
And that is why this case is being brought. Amazon are requiring that the price on Amazon is the cheapest price, even if the retailer would like to sell it on their own store (or eBay, Walmart, etc) for cheaper. If it’s sold on Amazon you won’t see it cheaper elsewhere.
did you read it all? it claims the prices are higher due to the hidden tax and that amazon is price fixing by threatening to block 3rd party sellers if they sell at a more reasonable price elsewhere. this doesnt necessarily mean that consumers will get a better deal elsewhere but it is probably unhealthy to put all that price setting behaviour in the hands of one company.
That doesn't really sound like price setting power. They are saying you can set whatever price you want, but it has to be the same as other sales channels.
"Other sales channels" being Amazon's competitors - suppose you sell a... cup that costs $1 to produce, and you sell it on Amazon and Bmazon. Amazon charges $2 in fees, and Bmazon charges $0.50 in fees.
In this hypothetical example with demonstration numbers for effect, you could sell your cup for a minimum of $1.50 on Bmazon and $3 on Amazon - everything above that is pure profit. In such a scenario, you would obviously much prefer selling at $2.50 on Bmazon over selling for $3.50 on Amazon, since you make 2x the profit, and the average customer would much prefer to buy the device at a ~30% discount! Unless the customer legitimately derives an extra $1 worth of value from using Amazon instead of Bmazon, in which case Amazon gets the sale anyway.
But, if 90% of your sales are on Amazon, then you can't offer this deal that both you and the customer are legitimately incentivized to do, because you'd lose 80% of your revenue.
In such a scenario, Amazon has no competitive incentive to reduce their fees! It suppresses market signals towards lower-overhead sales platforms, i.e. you have no way to signal to your customers that a sale on Bmazon benefits you twice as much as on Amazon.
Basically, Amazon is trying to abuse a network-effect instead of actually competing with their competition. They're deplatforming anyone who doesn't voluntarily price-fix for them. It's insane.
If Amazon did that, sales would drop to zero and retailers would leave Amazon. eCommerce is a low-margin business. Sellers will only stay on Amazon as long it's profitable for them.
It seems the government's main issue is that they have problems with companies being large. If that's the issue they should lobby congress to simply enforce some maximum size/impact a company has.
My opinion on this is that e-commerce is extremely competitive and consumers are already highly motivated to pay the least amount of money. If it were cheaper for consumers to go elsewhere they would, and sellers would follow.
I agree with you. I quit using Amazon late last year and it's pretty easy to change to different vendors. Hopefully more consumers do this so that vendors don't have to use the Amazon price everywhere else on the internet.
Where do you shop online now for things that you used to buy on Amazon? Have you found any unexpected pros or cons from going to alternative online stores?
I’m not planning to leave Amazon, but I’d love to find good alternatives.
eBay, Walmart, Wix, Shopify stores, etc. You can use Google Shopping to find even more places. Amazon rarely has the best price for all items these days.
For smaller things I use Target. I rely more on Costco as well (versus Amazon's subscribe and save)
For more niche items I buy in bulk from different the manufacturer's site. To be honest it's a little more work but to help retailers it's worth it. Sometimes I have to pay for shipping but I do remember that I'm saving 130 dollars a year by not being Prime.
That's a very naive view of the free market. What has been happening is Amazon consolidated the market, creating artificial barriers to entry as they do so (e.g. any and all exclusivity deals). This was always their plan, and they operated in the red for a very long time to get there. Hardly fair competition.
A free market is where everyone can sell their products in the town square. Amazon isn't a seller on the town square, they are (a large part of) the town square. And that's not in the best interest of consumers long term.
There are other examples, such as Apple's app store that have this pattern too. It's true that there are other players, but when Amazon has the market share it has, it's often not feasible to ignore that customer group. And that means customers pay too much.
I think you're right that the government does have 'limit the size of companies' as a motivation, but I don't think that's their main motivation.
For one thing, how would you even right and enforce a law on maximum size/impact of a company? How would this even politically get through? There's already enough push-back against enforcing laws like "don't form cartels". The pushback on maximum size/impact of a company would be even more intense.
In any case, as the article states, "Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away.". In other words, e-commerce is not extremely competitive.
> In any case, as the article states, "Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away.". In other words, e-commerce is not extremely competitive.
This is a good thing, and those sellers can leave Amazon.
Amazon binds its sellers over to something called Most Favored Nation status. That means that sellers can't offer their goods more cheaply than they do on Amazon – even if it costs them (lots) less to sell in Target or direct from their websites. This means that every time a seller adds a dollar to their Amazon sale price, they have to add a dollar to the price of their goods everywhere else, too.
After a bunch of state AGs filed lawsuits against Amazon over this, the company promised to cut it out.
They lied.
A new filing in California's suit against Amazon reveals that sellers live "in constant fear" of retaliation from Amazon if they allow their goods to be sold more cheaply elsewhere.
I don't see the problem with this. They don't have to sell on Amazon to begin with. Amazon obviously wants their customers to have the best price available. Sellers can just go off Amazon if they don't like it. If sellers end up raising the price on other platforms as a result of this rule, then that says more about them than Amazon.
Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and others do the same thing. The result is the lowest price for a given product on all sites. This is unquestionably good for consumers.
If the price is higher then the fault is simply that of the seller for raising it. All e-commerce sites want the lowest price for their customers. Of course, people don't see nuance and just see BigCompany bad.
From what I understand, it’s not that simple. Sellers need the sheer volume of Amazon to compete. There is also the risk of Amazon duplicating their product and continuing to sell it on their platform… or their competitors filling the void.
So what? That's how e-commerce works. Why should Amazon be obligated to fill their store with higher priced items compared to their competitors? No one is going to visit a store where every item could be purchased cheaper somewhere else. This is exactly why price match is a thing, because they don't want their costumers soliciting different stores to begin with.
The move that Amazon's price be no higher than offered elsewhere is the most pro-consumer move possible. Hilarious people are complaining about it. Any second-order effects of this are on the actual seller, not Amazon.
Amazon is a product search engine and should be treated as such. Vendors must have the freedom to set pricing on any platform as they see fit. If all product search engines and ecommerce platforms
behaved in this anticompetitive behaviour then what would we have? A weird commercial landscape that lacks flexibility… in the end the consumer looses because free market forces are not in play.
Amazon is not a product search engine, so the rest of your post is irrelevant. They are a store and describe themselves as such. You cannot find products on Amazon that are not for sale by them or sellers who agree to their rules, an actual product search engine would allow this.
Good luck with that! Amazon is the most powerful product search engine available. I love it and use it almost every day. Amazon will spend a lot of money trying to convince the feds they are otherwise… no amount of lobbying, PR pieces, paid ops and persistent commenting on boards like this one will stop valid questions being asked in hearings. It’s only a matter of time sorry.
I don't even know where to begin with this comment. Do you know what anticompetitive behavior is? Do you know how markets are supposed to work? Amazon is leveraging their position in the market to unfairly disadvantage their competitors, thereby distorting the market, decreasing its efficiency, and increasing end prices for consumers everywhere. Market-distorting behavior like this is why antitrust regulation is necessary to keep markets functioning efficiently.
Everything you're stating is false. Amazon is trying to do right by its customers, and they are not obligated to let sellers not give their customers the best price available. Sellers are not obligated to sell on Amazon.
Your conclusion that this increases end pries for consumers has nothing to do with Amazon, but the sellers themselves.
Amazon was already told not to do this for anti-trust reasons, and they promised to oblige. Unless the government, Amazon, and the general public are all incorrect about what constitutes monopolistic behavior, you are. The idea that Amazon is openly defying pro-consumer laws to do right by its customers is absurd.
I'm not GP. I didn't make that argument. I agree that Amazon is not obliged to allow just anyone on their platform. Sellers must abide by the rules that Amazon sets in place. At the same time, Amazon must abide by the laws of the locations at which it wants to sell. So if a state says that they cannot force a seller to keep their lowest price on Amazon, then that's the way it is.
> So if a state says that they cannot force a seller to keep their lowest price on Amazon, then that's the way it is.
Yes, but at the end of the day Amazon to remove the seller for any reason, so even if the FTC succeeds here, Amazon will simply purge those sellers who are not offering the best price, even if not explicitly stated.
There is no reality where Amazon allows their site to be inundated with higher priced goods compared to competitors.
it would be sensible to require a reason for refusing to do business with someone. Normally it wouldn't be but if you are a repeat offender it seems a sensible requirement
certainly, you can write anything on the form. Any reason is not without? I do doubt you can refuse one foo for being fooish but not the other. Now multiply by 10 000 and pretend you are explaining it to the judge in a context where you've been convicted multiple times.
They are not dictating how they sell elsewhere. They are saying they need to offer the best price on their site. It is easy to detect whether or not they actually are, and sellers are simply being called out.
There is no obligation to sell on Amazon, nor a requirement for them to raise prices on other platforms. They could simply offer the lowest price everywhere. The result? Lower prices for Amazon customers. If they raise the price, then that's the seller's fault, not Amazon.
While true, this ignores the important point that Amazon is only able to do this anti-competitive practice due to their market dominance that effectively forces many sellers to sell on Amazon.
> nor a requirement for them to raise prices on other platforms.
That is what this whole thing is about. Sellers that sell on Amazon aren't allowed to sell for lower prices on other platforms that are cheaper to sell on.
If Amazon was able to offer lower prices for its customers by offering sellers a marketplace with lower costs compared to competitors that would be great. Instead, they abuse their market dominance to prevent any competitors from offering lower prices by being more cost efficient for sellers. This is extremely nasty as it effectively prevents any competitors to Amazon from building a market share since consumers will have no price incentive to switch and sellers will not want to switch due to the smaller market share on those competitors' platforms.
It could not be more clear that this is anti-competitive behavior achieved through abuse of a dominate market position.
The move that Amazon's price be no higher than offered elsewhere is the most pro-consumer move possible.
Yet here we are with sellers WANTING to sell their items at a lower price on places other than Amazon, but if they do, they'll go out of business. That doesn't sound pro-consumer.
I'm a consumer. I'd like to be able to buy items for the lowest price the seller wants to offer me. That's not happening in some cases because if they do, Amazon will exclude them and they'll go out of business. Yeah, definitely not pro-consumer. Pro-amazon, sure.
Would Amazon be obligated to list the items regardless? Otherwise just dropping pricing conditions would only help those sellers that Amazon has enough interest to list regardless - for some products the "equilibrium" might not be great.
If your product doesn’t have any value that can be protected by copyright, patent and you haven’t built any type of affinity with customers, isn’t it by definition just another commoditized product?
Well, here's a real example. About a decade ago there was a simple video conferencing system called Nautilus. A simple LCD screen that let you call other people with the device and talk to them, not having to bother with computers or smartphones. The sort of thing that is good for talking with elderly relatives who may not be very computer or phone savvy. I bought one (from Amazon) for myself and my elderly parents. It worked well, but a few years later Amazon came out with their Echo Show products which are basically the same thing, which killed the Nautilus. I'm sure it was covered by patents and what not, but you can't protect the idea. Amazon obviously saw that it sold reasonably well and used its power as both a marketplace and a technology company to undercut their own seller.
Really? That’s your example? Everyone and their mother has a video conferencing solution and the idea has been around as something to aspire to since the 60s with the Jetsons .
Do you agree with the look and feel lawsuit that Apple had against MS? Or think that Roku, Amazon, Google , etc did something untoward because they came after Apple with set top boxes?
Well, for historical accuracy, Roku was first in regard to streaming devices you hooked up to your TV. Apple and the rest copied them. And it is pretty much obvious that Microsoft copied Apple (and yes, you can argue that Apple in turn copied PARC). But what makes Amazon copying things different is that they are a marketplace for other people's products and a maker of products themselves. That has an intrinsic conflict of interest.
> thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company's largest growth markets.
Again have you heard of the Kirkland’s brand? Have you been to a CVS and seen the knockoffs? Literally every single major retailer has house brands that compete with third parties.
Your response shows that you did no read the article. They specifically show cases where Amazon copied sizes:
> Among the victims of the strategy: a popular shirt brand in India, John Miller, which is owned by a company whose chief executive is Kishore Biyani, known as the country's "retail king." Amazon decided to "follow the measurements of" John Miller shirts down to the neck circumference and sleeve length, the document states.
It’s not whataboutism at all. Only people that don’t know that housebrands have been a thing forever would think that the evil Amazon is doing something unique.
And CVS follows the formula of name brand OTC drugs down to the very ingrediant to make house brands. You can’t copyright a shirt measurement.
And before you call me an “Amazon shill”. I got PIPed from Amazon less than two months ago. I’m the last person who has any love for Amazon. Honestly I don’t have any feeling either way. It was just my 8th job over 25 years, they gave me a nice check and I had a comparable offer within two weeks.
The major difference here is that Amazon has major market power as an online mall.
Like with the sears example, large 'mall' like organizations do outright steal designs and stonewall the original copyright holder.
A random housebrand does not have access to Amazon's statistics, logistics or reach. Amazon is looking at stats that they hide from their providers, to choose who to copy, then out-price the original seller. (Due to inhouse logistics)
And CVS doesn’t have major power when it comes to selling drugs and knowing which ones it should knock off with home brands? Every single store knows what to knock off based on what it sells.
And Walmart sells a lot more than Amazon.
You don’t think that every store knows how to undercut other products in its own store with house brands?
Yes, anyone here can go out and find an ODM from China to anufacturer them, send a custom version of AOSP to the ODM, slap their brand on it and sell it on Amazon.
It is none of Amazons business what prices they put when they list their wares on other services, the only reason they care is that they want to crush the competition.
Dictating how retailers can interact with your competitors is anti-competitive. Dictating what prices they can offer when they put up listings is a part of that, it is anti-competitive.
Yes, because there are not literally thousands of e-commerce stores out there. Amazon is the only one. UPS, USPS and FedEx don't exist either. You must use Prime to transport your stuff.
Look, with this reasoning there is literally no world in which Amazon can be implicated for monopoly abuse of power. Apparently, having any other option (even if it is damaged by monopoly abuse) is good enough for you.
Clearly the FTC disagrees with your logic, and I'm glad they do. FedEx, UPS and USPS should be sued too if they did what Amazon is doing.
How is Amazon forcing them to raise prices on other platforms pro consumer? The only one who benefits from this arrangement is Amazon, everyone else including the consumer just loses out.
Amazon is not forcing them to raise prices on other platforms? Amazon is telling their sellers that they must offer the best price on their platform. That does not necessarily mean they have to raise prices on other platforms.
If another ecommerce platform wants to compete on price to encourage customers to shop there, they cannot. Any discounts will only go to the seller's bottomline. How is that helping customers?
Clearly you are not a believer in free markets, because by the theory of free markets these prices would naturally arrive at the lowest possible price all on their own.
You are right that this policy is very simple, it's very clear both mathematically and logically. Companies cannot lower their prices lower than their costs. If costs are variable across platforms but prices are fixed to a single value than this will de-facto result in INCREASED prices. If this policy causes someone to leave a platform, that STILL doesn't result in prices any lower than they would absent the rule.
In fact, the sheer existence of the rule is a clear statement from Amazon that they believe they have significant and durable market pricing power, since if they didn't, this policy would clearly lead to sellers and buyers leaving their platform.
What you are advocating for here is the opposite of a free market. Two independent parties contracting with each other and agreeing to a most favored nation clause without government intervention is a free market: either party may choose to leave the relationship. The government stepping in restrict parties’ ability to contract as they see fit is a restraint on the market.
In a free market sellers will leave the Amazon ecosystem and move to a platform with less restrictive agreements, resulting in lower consumer prices (albeit with less availability). That’s exactly what GP is arguing. Obviously GP believes in a free market.
Amazon’s belief in their own market power is irrelevant.
> That does not necessarily mean they have to raise prices on other platforms.
It does, since losing sales on Amazon costs them more than raising the price on other platforms then that is what they will do, since companies are motivated by profit. Amazon knows this, that as a dominant market player if they add this rules the vendors will have to abide it since they will lose more from not using Amazon.
This is how anti-competitive practices works and why we have laws against them.
What you're saying doesn't make any sense. They could also just lower prices on other platforms - good for the customer. They can and should continue to lower prices, also good for the customer, until it is no longer profitable for them.
If they decide to raise prices, then that has more to do with the seller than Amazon.
It's not pro-consumer in any way. If the seller can profitably list it for a given price on a given platform, competition will almost certainly drive their price down to that level. The only time a policy like this becomes significant is if another platform, or the sellers own platform, can offer the product for cheaper than Amazon (eg. maybe they can ship straight from the factory), in which case this policy would force them to raise their prices, while simultaneously removing potential competitive pressure on Amazon.
Your assumption here is that they have to sell on Amazon to begin with, which they do not. There are plenty of products that you cannot buy on Amazon, so your entire post is ridiculous as it shows again, you don't need Amazon to succeed to begin with.
You are a seller. Amazon makes up 40% of your sales. You have your own first party website where you can profitably offer your product for 5% less and still make an additional 10% profit but it only makes up 5% of your sales currently.
What's your move in this position?
You can't just imagine all companies as perfect frictionless spherical interchangeable cows. In reality companies as large as Amazon can have significant market distorting effect, while much smaller companies might have to choose between their principles and going out of business.
You can lower the product for 5% on both your site and on Amazon. Since Amazon makes up the plurality of your sales you gain more sales both there and on your site. Everyone wins except for you, and such is the life of race-to-the-bottom e-commerce sales.
What I'm describing is already what happens, by the way. Look at Anker for an example.
Which is why your scenario here wont happen. Thanks for clarifying so well why your argument "there is no consumer harm" is bullshit, what you said here means you know that what Amazon does here increases prices.
The consumer is Amazon’s end customer, not the seller. Amazon sellers can and do take a loss to sell on Amazon, and ultimately the seller's fate is of no concern to Amazon. Again, they don't have to sell on Amazon to begin with. I buy plenty of bike parts, for example directly on their site and they're not even offered to Amazon to begin with.
What about taking out an ad to let people know where to buy your cheaper item? People didn't know walmart.com existed until a tv ad told them. Doesn't seem unreasonable to take some of the saving from not selling on Amazon and use it for services the platform was providing (discoverability).
You can repeat that comment here as many times as you want but it will not make it a valid one. Amazon is practically a monopoly, and they have reached that position by often selling goods below COG prices, incurring losses but outliving the competition. Now without a competitive marketplace for quite a lot of stuff they can dictate the prices at a loss for everyone except them.
If somebody was to challenge them with lower prices they can just repeat the cycle. They simply do not have proper competition for a lot of stuff and they are abusing it.
Amazon isn't a monopoly by any definition. There are plenty of places to buy things. Repeating it over and over again won't change reality. Feel free to bookmark this and come back to it 10 years from now. Amazon won't be broken up, either.
Customers are so lazy they want the government do everything for them. If you don't like Amazon, close the tab and go to eBay.com or Walmart.com. It's very easy, and can be done in seconds. This isn't like telecom monopolies where you can't actually switch.
For b2c monopolies matters, for b2b it is enough to be a dominant player to engage on a lot of harmful anti-competitive practices. This is a b2b situation that harms consumers, in that situation it doesn't matter that there are competitors, what matters is how much power Amazon has over vendors.
I disagree. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and others do the same thing. The result is the lowest price for a given product on all sites. This is unquestionably good for consumers.
> Most disagrees with you here, including those who makes the laws and the courts.
Downvotes don't mean anything. Most of the folks on here have no idea how e-commerce works. Amazon will win. It's simple to see - them losing would imply they are obligated to feature higher prices, which is clearly worse for customers and inherently at odds with what the FTC is supposedly trying to accomplish.
To be clear, you disagree because you fundamentally don't understand what's going on. I'll explain it to you.
A company makes a product - it costs $10 per unit to make. To list and sell with Amazon, they are charged $12 per unit. To make a profit the company adds and additional $1 per unit. They sell the product on Amazon for $23 per unit.
Online retailer Foo also has a store, and provide the same services that Amazon for their online shop at $5 per unit. The online retailer adds a profit of $2 per unit. Total price $17 per unit. Retailer Foo is more $ efficient for those services as a result customers price compare. Foo is rewarded for their effi with higher volume, manufacturer is rewarded with higher profit and consumer is rewarded with lower prices. Enforcing market competition led to all 3 parties involved being rewarded. Retailer Foo over time grows a larger customer base as people learn to price compare with them and forces Amazon to stop rent seeking.
But the above doesn't happen in the real world. Amazon enforces that the retailer lower their price on Amazon to $17, while still collecting $12 per unit. The company now can sell on foo, but only by selling on Amazon at a loss. They can't afford that amount of loss from Amazon and stay in business. So Amazon avoids competition. They can't pull their product from Amazon because not enough customers vist Foo retailer yet to make up the volume.
So in the end Foo retailer is more dollar efficient, but is prevented from growing and benefiting the marketplace. Amazon leverages its outside market size to avoid competition. Market participants preventing competition is against the benefits of capitalism and harms the consumer. So, it benefits the consumer to ensure Amazon has to actually compete with the more efficient competitor and stop rent selling behavior.
I do understand, but what you're describing is bad for Amazon's customers, as you note yourself.
Furthermore, again, no one is obligated to sell with Amazon. There are thousands, if not tens of thousands of sellers who do not sell their stuff on Amazon. It's not some requirement to do business in the 21st century.
In any case, we can come back to this case a year from now, and we can pretend to be shocked when nothing meaningful happens to Amazon.
I think you're looking at the short term and small scale instead of the long term and large / societal scale.
Yes I'm the short term Amazon's customers don't get the discount they could get om Foo retail. Bit then they become Foo retailer customers and they benefit. Too many things optimize for the small scale.
Similarly Amazon's upon losing customers to Foo retailer has to become more efficient overall (or reduce its rent seeking fee) to stop losing customers. So now all of Amazon's customers for that product benefit, even those that didn't move. And potentially even those customers for other Amazon products.
This is the purpose of capitalism - marker competition. Nobody wins with laisse-fair capitalism except rent seekers. Society benefits from market competition in capitalism and this is pushing for it.
You must be aware that producers can sell their own product and not be dependent on neither Amazon, nor any other middle man.
If I make light bulbs and sell them to customers through my own channels – exactly who is the rent seeker?
In my industry there are actors that are as dominant as Amazon are in retail, but there's also a huge part of the industry who just sell directly to the customer. It's your own choice. If you don't accept Amazon's terms, you don't have to do business with them. And vice versa.
That's a nasty way of arguing against his or her point. And "most" in this comment thread seem to have no idea of how sales and economics work. But go ahead, make a government Amazon like everybody is suggesting here. It's not like it's been done before? Government controlled production and distribution of goods, seems like a fresh new idea...
This is very short sighted. Lower prices inevitably come at a cost to quality. Normally this is corrected for in physical stores (you can see if something looks cheap), but it's not so easy with online shops. So yea, everything's cheap now because Amazon/Walmart/Temu and the like drove prices into the ground, but it's also all garbage. And the quality alternatives? Mostly gone because consumers flocked to cheap products.
I will say that I used to buy stuff from AMZN all the time and now I hardly ever do.
For me the last straw was when Amazon Prime deliveries stopped arriving in two days despite being claimed to arrive in two. It made a difference because in two days it could be a hassle to drive to the store but in five days I can easily find the time.
Not long after that, Prime service became officially five days at my location while Amazon was shouting to the rooftops that other people were getting one day. Around this time it seemed every other retailer was trying to impress me with fulfillment and often shipping is free if you buy $200 of camera equipment or $80 worth of games, even when it isn't it isn't very expensive but it is always faster than AMZN, I even get Ebay packages from Japan faster than AMZN gets me packages from the next state.
There was also the rising problem that the quality of the listings was going down on AMZN; I'm not so concerned that the $24 product is crowding out the $17 product but rather that there are so many junk products that crowd out good products. On top of that there are many product listings that make no sense at all and it all adds up to a stressful process of sifting through a lot of junk and then not knowing if some absolute garbage is going to show up at my door.
So I went from buying something on AMZN probably several times a week to now less than once a month... I canceled my Prime subscription because I couldn't have any self respect if I was paying a subscription for something that was worse than average as opposed to better than average. And boy is it annoying to shop on AMZN now. The only thing you have to click more times than to cancel AMZN Prime is to order something from AMZN without signing up for a free trial of Prime.
https://www.law.cornell.edu/wex/monopoly "For instance, the term monopoly may be referring to instances where: [...] There are many buyers or sellers, but one actor has enough market share to dictate prices (near monopolies)"
---
I'm not replying to anything you might reply with because the rest of your comments in this thread have clearly been in bad faith. But this was one of the few smoking gun comments betraying either a biased position you hold or your lack of background on the topic, so it was easy enough to just post a link to an authoritative source + definition and just move on.
No, it's an extremely valid point. Government antitrust policy has been heavily shaped by Robert Bork's "The Antitrust Paradox" which proposes that antitrust law should only focus on consumer welfare rather than market structure or number of competitors.
> It is none of Amazons business what prices they put when they list their wares on other services…
It is literally Amazon’s business to offer pricing at equal to or better than their competitors.
> …the only reason they care is that they want to crush the competition.
Every company wants to beat their competition, and many (most?) want to “crush” their competition. Don’t you think Target wants to crush Amazon? Don’t you think Google wants to crush Apple in smartphone sales? Don’t you think a local retailer would love to crush Amazon for products in their niche?
The only question here is whether Amazon is doing this in an abusive way and/or a way that negatively impacts consumers.
Overstock & Wayfair scan + compare identical & similar listings at Amazon and other sites, and will message sellers if their price is not the better price.
It's annoyingly a pretty standard practice. And they will see through the "different SKU" trick simply by comparing the product images.
I think that's a good solution in this case (ban it for everyone), but remember that there are different rules for companies who are found to have monopolies in a specific market. Something a monopolist does could be illegal while being completely legal for their competitors (who don't have a monopoly).
To be fair, every single wholesaler operates this way.
I have personalky spoken to wholesalers who sell widgets X (lighters etc) to retail stores.
If the retail stores undercut everyone else and drop the price below MSRP, they will exclude them in the future. There is centralized price control even though the retailers are free to do what they want.
That is done by auto dealers and anyone else who does MSRP. The difference is that they are still competing in that product category. Amazon on the other hand is a platform that stands BEHIND them. This leads to an emergent price cartel, just like in the propu lica piece on NYC real estate:
It's exactly their business. Amazon is going to use the limited "shelf space" to promote and highlight those products which are most likely to sell (and to generate best margins). If a product is for sale for less elsewhere, it's less likely to do so, so why should Amazon waste the "shelf space"?
This is no different than what non-e-commerce stores (such as Walmart) have been doing for years.
Amazon doesn’t need to promote every single item they sell and it would be meaningless for them to do so. They have a long tail of items which rarely sell and only show up on very specific queries disproving any kind of limited shelf space argument.
As a simple practical manner a small manufacturer can more cheaply sell products at their factory than the overhead of selling through Amazon or anywhere else. You often see this where mid sized brewery offers beer kegs more cheaply on location.
Amazon’s policy simply increases prices without any benefit to consumers or the overall economy.
So, to be clear, you have no problem with Amazon writing their own laws and collecting their own taxes? Because that is what they are effectively doing.
If sellers were obligated to sell on Amazon that would be the case, but it's not, is it? Ironically, people complaining about this are exacerbating the issue. If sellers who actually cared left Amazon it would loosen Amazon's dominance in e-commerce.
They're obligated to by the grip Amazon already has on the e-commerce market. Letting Amazon make anti-competitive moves that increase their grip will only worsen the situation.
This grip you're describing only exists because they don't leave, and nothing is stopping them. Again, no one is forcing people to sell on Amazon. They could use Shopify or sell on eBay.
People act as if you have to sell on Amazon. You don't. That assumption and expectation is why Amazon is dominant to begin with. Sellers should leave if they don't like it, and that will naturally soften Amazon dominance.
Imminent collapse and bankruptcy when they leave due to Amazon's dominant market position. That you can set up a shop anywhere does not mean anything when all of your potential customers are only going to the Amazon digital strip mall.
Listen, maybe you've never heard about antitrust law, but using one's dominant market position to maintain dominance in the market to the injury of consumers is pretty much the exact definition of an antitrust violation in the US. So write your local congressman complaining that antitrust law is restricting your ability to lick Jeff Bezo's boots, or run away to the Rockies somewhere and start a radically laissez faire community where everyone's asking about John Galt, but as the law stands in this country, it's illegal, and that's a good thing.
What possible complaint could you have about government overreach that doesn't equally apply to corporations? Antitrust law is the only thing standing between us and a corpohellscape "America, an Alphabet Company".
Government has the power of the state to force their wills on people. Please tell me a scenario where an adtech company will gain the ability to take away my rights and property the way the government can?
The government has a “monopoly on the legal use of force”.
Look no further than Florida to see what an overzealous government can do when you disagree with them or the police that raided a newspaper office because they reported on police corruption.
I’m much more worried about when the police are behind me because “I don’t look like I belong” in my own neighborhood than the Google car mapping my street.
Companies can use anti-competitive behavior to curtail your rights in all sorts of ways. Look at America's storied history with company towns. Free speech doesn't get you very far when being blacklisted from the company store means you starve, or your company scrip that you've been being paid in is no longer accepted to keep you housed, or they pay the Pinkertons to beat you senseless for using the word "Union". The reason we don't have that anymore (well, except for that last one Amazon) is government regulation.
The government at least has the obligation to appear as if it's beholden to your will and rights. Corporations have no such qualms.
So please tell me a realistic scenario where Google goes from an adtech company to one that can take away my freedoms and shoot me with impunity?
Also please tell me a scenario where Amazon takes over all retail?
If you haven’t been paying attention, the justice system and political parties gerrymandering hasn’t even been trying to act like they are behaving fairly.
The governor of Florida has actively been punishing companies both big and small that have been speaking out against him.
There are numerous examples of private corporations or non-governmental actors engaging in violence, with or without state support or sanction. There are the 100 million souls lost, respectively, to the British East India Company's occupation and administration (as a private entity, with military powers) of India, of the transatlantic slave trade by numerous private commercial operators, and of the genocide against the indigenous populations of the Americas, again much by privately-chartered corporations (as the original British colonies were). There are extant mercenary forces such as Constellis (formerly Academi, formerly Xe, formerly Blackwater) in the US, or the Wagner Group presently transacting genocide in Ukraine. There are oil companies who have initiated coups, paramilitary actions, and assassinations throughout the world. There is the Pinkerton Agency, still extant, and with a storied role in violence against labour and civil rights movements. There are railroads, with their own (private) police forces, which are in fact registered as law enforcement despite being nongovernmental.
The truth is that there is no clean distinction between State and Private use of force, lethal or otherwise. What there is in government is, one hopes, legitimacy and accountability to the citizenry rather than to creditors and investors.
I've often seen the complaint that developers think the law is purely strategic, like a computer, and if they can find a technicality then the law must follow through.
But that's not how this works.
It's technically true that fiber has competition if another ISP is offering dialup in the same area. No one in their right mind would agree that's actually a competitor in anything but name.
And so it is here.
If not selling on Amazon is an existential risk for your company, Amazon is effectively a monopoly, and THAT is what the law cares about.
Sellers are in effect obligated to sell on Amazon, because the alternative is “go out of business”. That’s the whole goddamn point of FTC intervention.
Every company has the right to set the terms and fees to use them. A “tax” is something you are mandated to pay. I get plenty of crap advertised to me on FB that you can’t find on Amazon.
Because Amazon is a retail company and the amount that Amazon charges is not much different than the cost overhead of getting any product through the channel.
Sure, if all you care about is money, then you can already go on Amazon and choose alternate vendors that are available at a lower price with slower shipping.
I happen to know exactly what I’m talking about - you right now can look for an item on Amazon and see “this product is available at a lower price with <slower shipping>”
You right now can set up a site on Shopify and sell your goods.
If you are selling a differentiate product instead of cheap crap imported (or drop shipped) from China, you can create demand without going through Amazon.
For instance, I was specifically looking for Samsonite zipper less luggage because I trusted that brand and it wasn’t available on Amazon. They chose not to sell on Amazon and I bought it directly
-- I happen to know exactly what I’m talking about - you right now can look for an item on Amazon and see “this product is available at a lower price with <slower shipping>”
Sure, on Amazon. Not other platforms.
I'm not going to bother explaining further, but thanks for confirming you don't understand the issue.
It's not my job to educate you.
I'll take the charitable interpretation and assume you just don't understand the mechanics of the policy.
Amazon is saying that sellers cannot offer a fair low price to customers on other platforms if the seller can't also offer it on Amazon. This is 1) anticompetitive, 2) anticonsumer, and 3) insane.
Consider this test:
- Seller buys a crappy LED bulb from China for $0.80
- Seller is happy to list the bulb on Walmart, Target, etc, for $2.00. Net of fees and shipping and stuff they make enough money
- Amazon charges $3 in fees. Obviously the seller can't afford to sell for $2 on Amazon. They sell for $5 instead.
- However, now the seller also can't sell for $2 on competing sites. Amazon, leveraging its market share, has dictated that the seller must price Amazon's fees into pricing on non-Amazon sites, so consumers pay $5 to Target for something the seller would have been happy getting $2 for.
Let's use your example. The sellers should stop selling that item on Amazon, and sell their light bulb on Walmart, or where-ever. Customers who really need that will go find it at Walmart, or where-ever. This strengthens the competitors to Amazon, which is bad for Amazon and good for the consumer. The consumer also find the lower price that they wanted. Alternatively, they buy the alternate product on Amazon which would be cheaper than the inflated price (per your example). Again, good for the customer. Everyone wins in every scenario except for the seller, which is how Amazon
and every wholesaler operates.
Suppose the FTC wins this case and sellers can put whatever price on whatever site. Amazon, like any store wants the lowest price. Not to mention there are only some many items you can show on the first page of results. They will find some other reason to remove these sellers and/or their items.
Now maybe there's another case to stop that behavior too. The result is that companies are not obligated to let sellers on their site. That is insane.
In summary, there will never be a scenario where Amazon allows sellers to sell the exact same item for more than Amazon's competitors, unless the government forces Amazon to let sellers sell whatever on their site.
You’re just wrong, Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers. The second largest is Walmart and it’s closer to 7%. Walmart, target, whatever, don’t add up to Amazons market.
> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers
Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin?
Sellers should stop using Amazon if they don't like their policies, and the issues will correct themselves.
Or, hear me out here, The Federal Trade Commission orders a study done and the study corroborates the general sentiment here that Amazon is abusing their power in the marketplace. So, the FTC then sues Amazon.
Your 'feelings' about how this works only matters to you. The US branch of oversight for trade has declared (with a lawsuit) that this behavior is unconscionable and either is or will be illegal by the time this suit is finished.
You're welcome to dispute the FTC and the crowd here on HN, but you need to provide some sort of data to back up your claim of: Sellers should just stop using Amazon...the issues will correct themselves.
The FTC's suit alleges the exact opposite of what you allege. The FTC states that there is harm to the entire economy if Amazon is allowed to continue this practice.
Please cite the studies, data, or metrics you used to claim '...will correct themselves."
And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $29,400
See the issue? The problem is that one seller on Amazon moving to another platform won't change the fact that Amazon has the majority market share. That's how market momentum works and it's why we have antitrust laws.
Even with exorbitant fees, they are still where sellers need to be. And they are using this market share to force sellers into overpricing on other platforms so that they maintain this unfair position.
If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share.
Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.
There are two reasons why that 65% number is wildly unrealistic:
1. We're ignoring fixed costs associated with onboarding with an ecommerce platform. Selling on one website has significantly lower fixed costs than it is to sell on every ecommerce site on the internet minus one. We're talking thousands upon thousands of retailers, not a handful. If what you were thinking is that they could sell across the next 5 to 10 most popular ecommerce marketplaces, you're somewhere between 15% and 20% marketshare.
2. Not all ecommerce sites represented in that 65% permit third party sellers. You can't just sign up and sell your stuff. You may have to convince their buyers to stock your product. This is not easy or cheap.
> Not to mention that if sellers stopped selling on Amazon they wouldn't control so much.
This is a problem in terms of organisation. If lots of people stop selling on Amazon this would be true. The problem is individually each seller is motivated to deal with Amazon so long as lots of other sellers are. A mass exodus from Amazon would in short order make the Amazon store far less relevant, but nobody wants to leave before everyone else is doing it because until then it costs them
And if lots of items became available on other sites, but not Amazon (as per the theory being propounded), then Amazon would no longer control 35% of all US e-commerce.
This is a classic coordination problem: you need all the sellers to leave together so that individual merchants don't take a loss. And coordination problems like this are one of the main areas government action can help!
Also, I'd imagine that coordination would probably leave them vulnerable to their own set of anticompetitive allegations (i.e., some variant of cartel behavior/price-fixing). To the extent anyone acts, it would probably have to be government.
There are companies that do not sell on Amazon. I seek them out. They will tell you that if their product appears on Amazon, it's counterfeit.
It's probably an impossiblity if your business model is selling cheap imported Chinese garbage at a profit, but that's the businesess you chose. Others have chosen to sell quality items on their own terms. Those are the businesses I want to reward.
> Customers who really need that will go find it at Walmart, or where-ever.
So here's a weird externality. As a decently well off tech-worker, I don't care if I'm paying 5$ or 2$ for lightbulbs, even if I'm re-lighting my whole house. The seller will sell on Amazon, because it is the largest market and will set their prices on other markets to match Amazon. I'll buy on Amazon, because it isn't worth my time to check multiple websites to get the best price (especially when SKUs differ and I have multiple other items I'm buying, etc). And now people who do need to save money, can't also find this lightbulb at a cheaper price on competing marketplaces, even if this lightbulb is actually the best quality.
> And now people who do need to save money, can't also find this lightbulb at a cheaper price on competing marketplaces, even if this lightbulb is actually the best quality
It's the opposite of what you're saying. Sellers not selling particular items on Amazon is good for consumers who are price conscious, because if they need that particular item they will search for it and find it cheaper on another store, strengthening that one and hurting Amazon.
And if they don't care they will find cheaper items on Amazon. Everyone wins except for the seller, which is Amazon's MO.
> It's the opposite of what you're saying. Sellers not selling particular items on Amazon is good for consumers who are price conscious,
Sellers don't just 'not sell this item on Amazon', because it is the largest single market. This is like, the whole issue in question.
> because if they need that particular item they will search for it and find it cheaper on another store, strengthening that one and hurting Amazon.
This is the exact thing that isn't happening, because Amazon is abusing its market position.
But, even if this was the case and the seller chose to sell on a different marketplace and take the Amazon ban, then it still wouldn't be as good as having just having the item listed on both marketplaces at two different prices. Because then I wouldn't be able to buy the best lightbulbs in one convenient location.
A company makes a product - it costs $10 per unit to make. To list and sell with Amazon, they are charged $12 per unit. To make a profit the company adds and additional $1 per unit. They sell the product on Amazon for $23 per unit.
Online retailer Foo also has a store, and provide the same services that Amazon for their online shop at $5 per unit. The online retailer adds a profit of $2 per unit. Total price $17 per unit. Retailer Foo is more $ efficient for those services as a result customers price compare. Foo is rewarded for their effi with higher volume, manufacturer is rewarded with higher profit and consumer is rewarded with lower prices. Enforcing market competition led to all 3 parties involved being rewarded. Retailer Foo over time grows a larger customer base as people learn to price compare with them and forces Amazon to stop rent seeking.
But the above doesn't happen in the real world. Amazon enforces that the retailer lower their price on Amazon to $17, while still collecting $12 per unit. The company now can sell on foo, but only by selling on Amazon at a loss. They can't afford that amount of loss from Amazon and stay in business. So Amazon avoids competition. They can't pull their product from Amazon because not enough customers vist Foo retailer yet to make up the volume.
So in the end Foo retailer is more dollar efficient, but is prevented from growing and benefiting the marketplace. Amazon leverages its outside market size to avoid competition. Market participants preventing competition is against the benefits of capitalism and harms the consumer. So, it benefits the consumer to ensure Amazon has to actually compete with the more efficient competitor and stop rent selling behavior.
> They will find some other reason to remove these sellers.
I think this speaks to the nut of the problem. Unless there is an incentive upstream of the misalignment of parties, then any number of lawsuits after the fact will have a "war on drugs" level of futility.
What to do then? In an alternative universe perhaps the FTC was implemented to improve trade by promoting standards, ontologies and authenticity verification that lead to greater freedom of trade and less gatekeeping.
which is easy to compete with for a government platform.
in a lot of countries it would save a lot of money if the tax office had direct access to the product and purchase database. Thousands of people could move to more useful jobs.
That's the same trap that TikTok influencers and others fall into.
You are sold "the dream" by showing top sellers / influencers / etc. and told you can be like them. Kevin O'Leary became a meme for promoting this bullshit: https://www.youtube.com/watch?v=AuqemytQ5QA
In fact, even the top influencers can be deplatformed in an instant, and their speech is controlled. And same with Amazon. But the thing is that the people you never hear about, the "middle class", are far more controlled and the "long tail" produces all that free content that basically gets almost new views / buys but all that free sharecropper content is then used to train AI models or provide proof of large available inventory / product / content BY THE PLATFORM that pits them all against each other in a zero-sum game.
> Kevin O'Leary became a meme for promoting this bullshit:
The women is Amanda Lang,[1] and the two were a 'duo' for many years with a business/finance reporting show. I'm not sure how she managed to put up with him for so long. :)
That's the thing people don't get about making competitors to Facebook, Twitter, and other centralized platforms as well.
You don't need to boil the ocean in order to serve a single community. For example, Facebook started in Harvard and its value to everyone in Harvard was based on how many people in Harvard used it, not how many people in the world used it.
Similarly, if a single product vendor and their customers form a community, then a free market of fulfillment companies can spring up to stock that specific product, and then partner with the delivery companies (who have their own networks) to deliver the package. You might say that the delivery infrastructure is a cartel, but they're open to everyone and Amazon has been relying on them until finally spinning out their own. Same goes for CPU chips that Apple relies on etc.
Look at IPFS for example, competing with AWS for storage. It is growing every year and now powers 1% of all storage worldwide! And there is a free market.
Whereas these platforms are all centrally controlled by some billionaire (Zuck, Musk, Bezos) and his crew. You don't need to have their scale because you don't need to serve ALL COMMUNITIES IN THE WORLD on day one. If you have an open source software like Wordpress or Magento, you can serve your customers with web hosting instead of Shopify or Amazon. Now the only question is, who would do fulfilment.
yes, but the bar for better was much lower back then. if you released the original Facebook today it would be so obviously so much worse than the competitors it wouldn't get any traction.
and many other small examples. There was still AOL, MSN, etc. There was a time when they ruled.
The only reason that FB, Google and yes Amazon were even able to launch, is because the open permissionless web disrupted AOL, MSN etc. Imagine them allowing Amazon to launch on top of them. They’d cannibalize them just like Amazon cannibalizes sellers.
> Similarly, if a single product vendor and their customers form a community, then a free market of fulfillment companies can spring up to stock that specific product, and then partner with the delivery companies (who have their own networks) to deliver the package.
One thing that gets overlooked in this is returns.
One of the big draws of Amazon is easy returns.
Whenever you have decentralized fulfillment centers, returns become a huge pain, because the fulfillment center that is happy to take your money and ship you the product, doesn't want the liability of dealing with returns.
Amazon has also optimized returns (for itself) by making its sellers eat the cost of those returns, one way or another. That's not all that controversial, but when you consider what Amazon recommends people buy, it becomes obvious that they have no problem recommending garbage because they don't care if it gets returned. They won't eat that cost. They get the profit from the sale, then let everyone else work it out.
You are correct, but note that one very key edge that Amazon used to as a competitive edge is no longer available to new entrants in the business. For the first 15 to 20 years of Amazon, they were able to be cheaper than their competitors due to the fact that sales tax only had to be collected in states where they had a nexus.
This gave them a pricing advantage which drove more customers to them which they intelligently plowed back into the business in building out their own network, no small feat of course.
A newer competitor would no longer have access to that simple sales tax advantage, and so would have to find something else to compel customers with. Barring that, Amazon/Walmart/Costco/Target/Home Depot/Lowes/Best Buy are tough to compete with because they already offer rock bottom pricing and they don’t have to invest in a ton of new infrastructure for logistics.
Not to mention the advantage of having investors willing to burn billions for a decade+ until you got into a dominant market position to finally become profitable. Not always easy to get access to that.
Magento was badly designed- infinite levels of directories. Good luck on upgrade. There’s plenty of self hosted online stores. That’s hardly the problem.
I did a single contract for a Magento site and decided never again.
It was like a group of Java developers decided to write PHP code and it was horrific. I would estimate 80% of the classes in that codebase didn't have any implementing code in them.
Literally the only thing I liked about Magento was it's ability to outline everything that was being rendered to make it easier for you to identify the changes to templates you needed to make.
This is a classic programmer response. The problem is not Amazon's software, it's their marketing, distribution network, huge audience that searches for products exclusively via Amazon, "free" and very fast Prime deliveries, etc. That doesn't all happen via simply open sourcing some code.
It's trivial to create a website (frontend and backend) that offers similar functionality to Amazon. There's nothing special about their software platform.
You can't open-source marketing and the insane delivery network Amazon has. Those, among other things, are the reason they are successful. They could release all of their software completely open source and literally nothing would change.
You can’t open source it but the government could nationalize it and make it a benefit to small businesses everywhere without the anti competitive profit seeking motives of a private business controlling it.
Expropriation is the first step to destroying the thing. There no reason for unbelievably good customer service if you get paid by taxpayers regardless of outcome.
The original commented suggested that an open source Amazon was the “real solution.” Open sourcing Amazon’s software and then nationalizing their distribution network is a very different suggestion!
You're talking about the infrastructure for a specific seller, which in itself is by no means trivial.
What you want here is an open source replacement for Amazon's product search that will find products from multiple independent sellers. The hard part is probably how to curate it; you want to allow legitimate small sellers without allowing the thing to be filled with scams. But Amazon hasn't done a very good job here either, so maybe it's not a high bar.
And then a payments system which is something in the nature of GNU Taler.
Amazon's logistics is an advantage, but is it an advantage that can overcome the need to pay them a vig instead of having the product shipped directly from the manufacturer? Lots of people willing to wait a week for shipping if the price is 10% lower.
No need to open source. Just to pick some examples to build something similar to Amazon's fulfillment part as it was like 6 years ago:
Shopify as the front end
CargoWise for transportation, warehousing and everything logistics
Which leaves some of the more sophistiticated stuff like demand ballancing across the network, but that is doable by either developing something in-house or throwing an ERP system into tue mix.
All available off the shelf as we speak. There are other reason why nobody manages to seriously challenge Amazon.
The basis of this entire case is that you can open your own shop and Amazon disallows you form competing with their monopoly. There are plenty of open source options to open a web shop. That part is almost laughably easy.
I find most of your content here to not have any good follow-through.
Amazon isn't just some software on a few servers. It's a whole vertical enterprise. Suggesting that some front-end and back-end servers can take the place of warehouses, delivery people, fleets of machines (served by AWS no less), payment companies, 3rd party billing is just laughable, and shows the naivete of a sw engineer.
However, that last paragraph is terrible and absolutely true...
> Otherwise, at best, you are just reduced to begging Daddy Government to force these corporations to break up. How well did that work for Ma Bell? The pieces were still a cartel, still charged $3 a minute. What the government couldn't do in a decade, open source technology and open protocols did in a few short years ... VoIP dropped the price to practically nothing. Now we have videoconferencing all over the world. Because once we decoupled the software (AOL, MSN, etc.) from the infrastructure via open protocols, the infra providers became a dumb pipes competing in a free market.
I remember Ma Bell. Charged stupid prices for long distance, but was a good service. And then, the splitup happened. Did we get better services? Nope. We just got dozens of smaller monopolies all engaging in the EXACT SAME SCAMS that Ma Bell was broken up for.
It was when we started pushing data around and got away from POTS lines did we finally break the stranglehold of the baby bells. Even DSL has been basically thrown away, given how little the RBOCs dont want to advance and grow. Monopolies are like that.
Thanks for un-flagging. How does one become an admin on this site, anyway? I've been active since 2008 but still get dinged for stuff, not sure for what in advance.
Yep, I think we are in agreement. My point is that for many decades, the government was barely able to make the prices drop. And then open protocols like VoIP did it in a couple years.
I am a libertarian and believe that good open-source software and open protocols cause the centralized services to face a free market of incumbents. Much of the vertically integrated systems can be unbundled.
Another great example is how the Web (HTTP was the open protocol) disrupted AOL, MSN, CompuServe etc. Or how Wikipedia disrupted Britannica and Encarta. How Apache and NGiNX disrupted IIS. And so on.
Basically, we need standardized, open protocols. Maybe one day OpenStreetMap and Mastodon and BlueSky will disrupt their centralized alternatives. In any case, the first step is to have open source software and federation. I'm not saying it's the only thing that needs to happen, but FBA and many other services can be done "sharded" per-product. We can do the same for other marketplaces, like Uber, Fiverr, etc.
Thanks but I'm no admin. Anybody with some minimum amount of karma can "vouch" for a flagged post. You just click on a flagged post in the "$time ago", and a vouch should show up there.
Youve got 7k karma so you should also be able to vouch. Just make sure "showdead" is on in your settings.
As to the subject matter:
> Yep, I think we are in agreement. My point is that for many decades, the government was barely able to make the prices drop. And then open protocols like VoIP did it in a couple years.
Mostly, but probably not on the actual mechanisms. I do agree that government's breakup of Ma Bell really made everything worse. And how it was broken up went from 1 monopoly to 20+ monopolies. The end user really just saw stuff stay bad or worse. Now, myself being an anti-capitalist, would have looked at this situation, and go "Well, communication networks are an integral part of national security, and should be nationalized, since this company was abusing the people", and would have federalized it under a nonprofit charter.
As to claiming that VoIP helped supplant - nah. People got their taste with dialup of the internet, and at a whole 4.3KB/s , and wanted faster. A 3 minute (3MB) song was 11 minutes to download... and Napster. Dialup was stagnating, and the telcos were being slow about DSL. I saw DSL eventually, cable networks, and WISPs pop up like weeds everywhere, because more and more killer apps were showing up. And frankly, at the time, Piracy was the killer app. Bittorrent, Kazaa, Gnutella, Napster.
> I am a libertarian and believe that good open-source software and open protocols cause the centralized services to face a free market of incumbents. Much of the vertically integrated systems can be unbundled.
That's the problem with the unbundling. That's not a software or code issue. That's a money issue, primarily with folks who have piles of money can force things others dont want.
And with vertical industries, it's never been a user-level experience in unbundling. To really force the issue, it goes back to the government to force it. And the US doesnt have a good track history in doing that well. This problem is always been a coordination issue, where larger monoliths can do well from a dictatorial governance (companies).
> Another great example is how the Web (HTTP was the open protocol) disrupted AOL, MSN, CompuServe etc. Or how Wikipedia disrupted Britannica and Encarta. How Apache and NGiNX disrupted IIS. And so on.
It's disingenuous to lump all those together.
The "Web" was a group of academics and governments, that finally agreed to let capitalist and commercial groups in on 1993. And those groups also included corporate private networks like the ones you listed.
Wikipedia was the first real test of anonymous and user-level editing across a website, under newly created Wiki software. Sure, the 2 encyclopedias were killed by Wikipedia, but Wikipedia only hastened their death. Bulk books like encyclopedias were already declining. However, we learned a great deal about the ills of letting users edit webpages like encyclopedias realtime. And we're still fighting with those problems. (for example, you'd never see the "lists of Jews", aside a few high profile people in a proper encyclopedia, but here it is.. https://en.wikipedia.org/wiki/Lists_of_Jews )
You mention "disrupt IIS"... and I'm here on my work laptop with 2 IIS consoles open. Free is going to win out cost-wise, for things like startups and hobbists. But there's lots of industries who've developed and maintain in IIS. And in my industry, I'm not permitted to use NGiNX.
> Basically, we need standardized, open protocols. Maybe one day OpenStreetMap and Mastodon and BlueSky will disrupt their centralized alternatives. In any case, the first step is to ha...
While it may not be as simple as changing a SKU, Amazon is chock full of products made in the same factory, many with identical product images, sold under different brands at different prices, and many of the "brands" are the output of name-generators.
That actually adds to the problem: If you put effort and money into brand recognition you need to provide best prices on amazon, but Amazon is easier to game if your brand is xyxxy12345.
The weekly sales flyers that stores offer was/is another way around this as well. Some of them have coupons to specific items that are not allowed to have sales prices lower than the MSRP. Very few people are as draconian about their prices as Apple, but others sure wannabe.
> Some of them have coupons to specific items that are not allowed to have sales prices lower than the MSRP.
That's actually kinda disappointing. I'd always assumed those flyers were pieces of trash (at best, something I'd need to put in a recycling bin) which I don't want but now I'll be more tempted to take them when offered on the chance that I otherwise accidentally avoid the sales price.
It's still good to know that such coupons are likely just attempts by the retailer to circumvent the manufacturer's... ahem suggested price.
Coupons are a longstanding price discrimination technique. If somebody doesn't want to pay full price, you might still get their custom with a voucher. You don't want to make the discount too easy to find though, as you will miss out on revenue from people who were willing to pay full price.
ProTip: at some stores, employees are allowed to give discounts as well. i have 2 anecdotes from HomeDepot:
Since none of their lumber should ever be in the same building as the word "straight", I made a joke to a nearby employee that we should get a discount at how warped the wood was. He very seriously told me to separate the warped wood on my cart, and he'd mark them down. Got to the register, and they were marked down 40%.
Second instance was after spending time chatting with an employee in the appliances department, he pulled out a pre-printed, handcut piece of paper from his apron pocket, wrote 10% on it with his sharpie, and i got 10% off at the register.
Oh, and of course the Guitar Center stories of "you're a cool dude, and since I like you, let me knock of X%" are infamous
Big box stores have a lot more leverage than a small seller on Amazon, who'll just get the "that violates our policies, we're nuking your business, no appeals" treatment.
Yes, which is why searching "most favored nation clause" turns up legal advice on how to set that up in a good way.
Note, there is still a valid question on whether or not companies with enough exposure should be held to higher standards. Consider, we hold pro players to tighter requirements than we do local leagues. They both have basically the same rules, of course, but not fully identical. And enforcement is, of course, largely at the discretion of the agencies enforcing them.
The last is obnoxious, if you view the entire field as a homogeneous thing. And I do get the impression that there is something more going on in this case. That said, it is not abnormal to rank ROI on what gets enforced. I wish it was framed directly in those terms, though.
The US is strong on the doctrine that the law applies equally to people (legal entities) regardless of size / market cap. I don't think we'll ever see something like the EU's law that targets only large internet companies. It might even not fly on equal protection grounds.
I think that in either Finland or Iceland people receive traffic fines that are a percentage of their income. They would never fly in the US.
That is why I didn't say it applies differently. I said it is enforced on a ranking that is based on ROI. And... it really has to be.
There are almost certainly low key levels of bad practices in small shops. But it would cost more and take more out of the economy to enforce them than it is to just not care.
Now, that bar is rising, of course. Things that used to not matter years ago are easily enforced today.
So your view is that we should enforce extremely strict laws arbitrarily and capriciously based on however the particular regulator or prosecutor feels about a given entity?
If you've ever been on the interstate system, then you are basically with me. Literally it would be trivial in today's world to have a hookup on your car to check your speed against the local signage on a somewhat real time basis. Sounds absurd, but there is a pretty good chance every long haul truck you see out there is doing exactly that.
Similarly, mens rea is a thing. Such that statutory enforcement of rules is often a regressive policy that isn't necessarily a good idea.
I think most people who have driven on the interstate are quite aware that police arbitrarily pull people over for many things given the vast number of laws that are continuously broken by all drivers. I do not think a regime where you’re always breaking a law and can be pulled over just for driving while black is a good example when advocating for prosecutorial discretion. I’d prefer a system that doesn’t result in being subject to a regulatory action or prosecution because I was doing business while black.
Ah, agreed. And if you take the worst possible interpretation of my post I can see how you get there.
My point was that many rules get enforced on a cost benefit based system. Especially in business where enforcement is necessarily an expensive undertaking. Ideally, part of enforcement will include evolution of the rules so that people don't grow into a situation where what they are doing is suddenly illegal. That said, many of the rules we are looking at here are more along the lines of "you left interstate driving and are now in a city." That is, the landscape and situation pretty much has to factor into the rules. Is why you would be an asshole for worrying about the kid's lemonade stand down the corner. Any grandstanding on how the rules apply universally is... well, just not useful.
My interpretation isn’t the worst possible interpretation, it’s the realistic interpretation based on how permitting discretionary application of the law actually works in practice. Your view is fine in theory but fails (and not just fails theoretically - it has failed and continues to fail actually) in practice. Advocating for your theoretical ideal when we know it fails in practice is… well, just not useful.
I'm largely acknowledging that that is where we are. And not too concerned about that for many rules. But, and I said so in the initial post, expect that more and more will get enforced both as you get bigger, and as we get better at enforcing them.
That is to say, I also expect clarification and evolution of the rules during this enforcement action. Such that I would be most happy to have some of these arrangement flat out illegal. That said, https://www.ftc.gov/advice-guidance/competition-guidance/gui... was linked on Matt Levine's email today. And... "Our company monitors competitors' ads, and we sometimes offer to match special discounts or sales incentives for consumers. Is this a problem?" is answered with a no. Such that, this is a tough field to litigate right now.
And, what is it you are advocating for? That we only have rules that we can universally enforce? That would require that we know all of the ways that they can be broken from the beginning, so that we can encode those in law.
I'm curious... how far does Amazon's MFN policy extend?
For example, let's say I independently decide to import an item from company X and sell it only on a Shopify site for a lower price than company X's items listed on Amazon. Will Amazon exert pressure on company X to stop shipments to me or impose a minimum sale price policy simply because company X's products are available elsewhere cheaper than on Amazon?
Isn’t this very common among all resellers? For example if you own a hotel and want other websites to sell your availability they will only list you if you don’t list the same availability for less money. They do this in part because people use the service to search for hotels and even they find one they want they go to other places to see if it’s cheaper.
This is an antitrust lawsuit filed by the FTC, not an accusation of specifically illegal conduct.
They're not saying amazon committed a crime by doing this, they're saying that it's evidence of amazon abusing their market position to create a monopoly. "most favoured nation" status is legal, creating a monopoly isn't.
You have that backwards. Monopolies are perfectly legal, it is only establishing and maintaining monopolies by improper conduct (ie specific anti-competitive practices) that is illegal. MFNs are not per se anticompetitive, but by the rule of reason they might be under certain circumstances. The FTC would have to prove that this is one such instance where MFNs are illegal conduct.
It is interesting to note that the US government often requires the same kinds of MFN terms, even though it is usually much more expensive to do business with the government than the private sector. There are many ways of constructively working around MFN requirements but it creates collateral damage. For example, the practice of having very high prices that are steeply discounted for most customers is often an artifact of having the US government as one of your customers. For software, it is common to create a new product/service that is trivially different in some way so that you can justify a new SKU that is only sold to the government.
Amazon's practice is bad because it anchors pricing to their mandated cost structure. That the US government engages in similar practices should at least raise questions, because it has the same effect on the marketplace.
It isn't "whataboutism". If the government's position is that MFN terms for vendors are fundamentally anti-competitive and bad for consumers, which I agree with, then it raises questions about any organization or sector of the economy that widely requires MFN terms. It discredits the FTC when the US government routinely engages in the same market malpractice that they are accusing Amazon of but are disinterested in changing their own contracting behavior. It doesn't become less bad because it is the government doing it to vendors instead of Amazon.
This "rules for thee but not for me" behavior is why trust in government institutions has been eroding. It is difficult to give good and necessary actions the aura of legitimacy required for democratic institutions to function when the hypocrisy is obvious.
Common law is basically whataboutism. Whataboutism isn't inherently bad, it's not always a deflection. It is reasonable to expect similar treatment for similar actions.
If anything, reciprocity is one of the very foundations of society and of our justice system. You can't really discuss a lawsuits without talking about precedent, it's inherent to the discussion
(In a way it's amazing how shouting whataboutism is now more often used to deflect or excuse double standards and unfairness than whatboutism itself.)
It's true that the US government does make those demands, but it's very important to note that the US government organization is not a reseller of goods. It is almost exclusively a consumer. It is not in direct competition in the same marketplace with private industry outside of a few select industries (e.g., USPS, limited healthcare).
Next, MFN tariffs kind of by definition only affect international commerce. For Amazon, a 100% domestic manufacturer producing goods would need to comply.
Finally, MFN is something defined by WTO treaty. If you have to abide by MFN when importing goods into the US, it's almost certainly because your nation is also a WTO member. Because almost all of them are. The General Agreement on Tariffs and Trade requires WTO members to extend MFN treatment to like products of other WTO members. It's literally the the first article of the treaty agreement. [0]
You are confusing unrelated things. As used here, "MFN" refers to a common type of term found in standard business contracts that have nothing to do with the WTO or the government. This discussion is about Amazon's use of MFN terms when contracting with ordinary domestic businesses.
Nothing I wrote suggests your interpretation. The US government uses MFN terms in domestic vendor contracts in the same way Amazon does. This was plainly obvious in context, since the term was introduced in relation to Amazon. It has nothing to do with international trade and nothing I wrote implied that, "MFN" is a standard term if art in ordinary vendor contracts.
You are the only person that introduced the notion that this had anything to do with the WTO, international treaties, etc.
> the practice of having very high prices that are steeply discounted for most customers is often an artifact of having the US government as one of your customers
That's one of the main cases of sticker shock in the healthcare industrial complex. Price a cancer treatment that would still be profitable at $10k/month at $125k/mo and offer sweetheart discounts to insurance companies (and treat self-pay patients as charity case writeoffs).
I suppose if ABC LLC makes the devices, and someone sets up ABD LLC to sell them on Amazon and ABE LLC to sell them on Target.com, ABE LLC and ABC LLC aren't bound to ABD LLC's "most favored nation" agreement.
Shell companies are for more than just tax evasion!
DC AG Karl Racine filed a lawsuit over this in May 2021. The judge threw it out, supposedly for lack of evidence that it actually raised prices: https://www.jurist.org/news/2022/03/dc-trial-court-dismisses... I can't find details; it's unclear what the evidence or lack thereof was.
I know that sometimes these lawsuits can take awhile but scheduling something 3 years away seems excessive. It feels like discovery can take months, but years feels like a very long time here especially since this is something that is actively still ongoing and damaging to the victims
According to the FTC's lawsuit, Amazon no longer binds its sellers with a Most Favored Nation clause. Instead, Amazon now will refuse to promote an offer in its "buy box" space if it detects a lower price for that good on another website.
The FTC alleges that this simply reconstitutes the MFA since most sales on Amazon take place from the buy box. Amazon responds that it is within its rights to not promote uncompetitive offers that make its site look bad for not having the lowest available price.
Does anyone have examples of popular / name brand products that are pushed down in ranking due to this? I would love to see for myself how this looks in practice
You'll see that in the FTC's example, you need to click to see more buying details and that at the time of this comment the lowest price is $14.28 with free shipping (on October 12th for my location).
In the other example, the "buy box" highlights the best offer of $9.99 with free shipping (on October 5th for my location).
As a consumer I definitely avoid products with no buy box. I thought it was only related to Amazon fulfillment (which in turn I use as a proxy for being likely to receive the product on time and undamaged)
That's funny. I _only_ buy things from Amazon that are not shipped by Amazon.
Their logistics are utter garbage for me - part of it is an urban setting with nowhere to leave things, part of it is that they don't give a shit, and leave things.
That first example is eye-opening for me. I always thought that when Amazon doesn't show a buy button on the product page, it's because that product is not currently available to be shipped from Amazon.
That's one possibility! But Amazon also hides the buy box when the only offers are not what Amazon considers "competitive" because it hurts their brand if consumers see shitty deals.
In this example, the pens with the buy box are 50% cheaper and have much faster shipping.
They're not the same pens though (extra fine v. ultra fine).
I can understand why the FTC is concerned. This has the potential to be worse for competition than MFN agreements, because it forces any supplier whose products might end up on Amazon to police its entire distribution network for minimum pricing.* It also forces suppliers to crack down on (legal, authentic) grey market imports, even if those are never sold on Amazon, or risk losing the ability to effectively sell on Amazon.
* Moreover, that minimum pricing has to be sufficiently high to account for Amazon's cost structure, even if other competing vendors are more efficient.
I was offering the comparison because those two pens should be priced within a few cents of eachother (the difference is the tip width and ironically "extra fine" is more expensive). If the products were the same then there would only be one product page and the $9.99 offer would be the highlighted deal.
The fact that one product has the buy box at $9.99 and 1-day shipping and the other product does not have the buy box at $14.28 and 8-day shipping lets us infer that $14.28 is not a competitive price for these pens and there may be a cheaper price elsewhere (likely closer to $9.99).
You seem to be thinking that manufacturing costs alone dictate the product cost. Demand and volume in circulation are also part of what determines costs, though. That is, your first assertion that they should be within cents of each other is clearly wrong.
It doesn't let us infer that there is a cheaper cost somewhere, it lets us infer that Amazon has a low confidence that someone will buy it. That or they have such a low inventory of it that they are not confident showing it on the buy box without more engagement from the users.
To be clear, I'm ok with the idea that this is getting investigated. I have low confidence of finding smoking gun reasons to punish sellers on this. I am far more confident that Amazon is optimizing to convert sales.
Actually, in this case I am cheating because I already know that this SKU is offered for a lower price with faster shipping from Walmart. I suspect that listing is what triggered the loss of the buy box.
But that is a non-sequitur. Literally, in that that doesn't necessarily follow. We literally don't know why the buy box doesn't have it here and I could guess at a few other reasons. Most likely, I'd guess that the cheapest option not being Prime factors in to it more so than external offers being cheaper.
You're right, shipping speed likely also factors into it in addition to cost (that's why I also mentioned the shipping speed). If Amazon can't deliver within its 2-day Prime guarantee it is less likely to promote the offer.
Of course, without access to Amazon's systems I can't say for sure why any individual listing is or is not promoted. I'm just making an educated guess based on what the FTC put in its complaint.
Amazon is not a neutral entity or a public space. It's a private platform with its own interests that are very often in conflict with sellers.
There is this weird cultural expectation of platforms and platform-like applications (social media, multiplayer video games, online stores, proprietary libraries/engines, even entertainment media "universes" and franchises etc.). Participants and consumers seem to think that these platforms are somehow public spaces that they partially own, or at least they act that way.
But you only own what you actually own.
There are legal instruments and structures that actually let you partially own things and/or grant you rights so you can act on these kinds of expectations: coops, open source and other such licenses etc.
When internet culture and commerce wants to mature, then maybe we should start focusing more on building on _legally_ trustworthy foundations.
That's nice, but the reality is that Amazon has almost 90% control of e-commerce.
They have huge monopoly power, and laws exist to protect consumers from that.
Is it the ideal way to build a society? No,
But the government should still step in when it happens.
I actually misread fig. 14 from the article which was the set of top market participants.
So it has a 90% share of the ecommerce of those top 5, not the whole market.
Honestly feel the article intended that misreading
> Amazon responds that it is within its rights to not promote uncompetitive offers
Sounds to me like Amazon has found a loophole in the law. It agrees to list anything for sale, with no anti competitive conditions, but then only recommends customers buy things that it believes are in the customers best interests.
The FTC will struggle to argue that is illegal. Amazon can't be compelled to recommend stuff. (free speech etc). Also, what they recommend is in the consumers immediate best interests.
It will be hard for the court to argue that amazon should start recommending more expensive items to consumers, just to push consumers into looking for a cheaper platform.
Amazons fees are making the offer uncompetitive thus Amazon is actually not competitive meaning that they’re relying on their monopoly position to maintain market dominance instead of competition which they evidently cannot do.
I haven't studied antitrust policy in ages, but IIRC one aspect of this in the past has been to forbid the monopolist from peeking at their competitors' prices.
>It will be hard for the court to argue that amazon should start recommending more expensive items to consumers, just to push consumers into looking for a cheaper platform.
Yes, 100% this. That's why I said that this lawsuit has a major remedy problem. Even if the court agrees this is anticompetitive, how do you fix it?
The insurmountable problem is that the practical interests of "consumers shopping on Amazon" don't actually align with the abstract interests of "consumers in general" that the government is purporting to defend. On Amazon we want to find the right item (search, description, reviews), have strong confidence in the inventory and shipping promises (fulfilled by Amazon) and have reasonable confidence we're not getting screwed on price including shipping (Buybox, Prime eligible etc). If you chop those things apart it becomes essentially impossible to offer the overall experience that consumers clearly prefer.
The cause of this is that it should be an anti-trust violation for any wholesaler or manufacturer to dictate retail prices to the retailer. They agree on the wholesale price because that's what they're negotiating with one another, then the retailer chooses the retail price in their store.
Now if Amazon wants the MFN clause, no problem -- but it's the wholesale price they can't sell to someone else below, not the retail price. If Amazon wants the lowest retail price, that's up to them.
Amazon isn’t recommending “more expensive” items to consumers, it’s offering different products.
It should be recommending the best product for the user at the price it can offer the product at.
The fact that the product exists $1 cheaper on another site does not make it not the best recommendation for the customer’s need. If I search “tablet” are you saying I should be recommended a cheap off brand tablet promoted to me because Amazon has the cheapest price or an iPad even though I can buy an iPad on apple.com for $10 cheaper?
>The fact that the product exists $1 cheaper on another site does not make it not the best recommendation for the customer’s need. If I search “tablet” are you saying I should be recommended a cheap off brand tablet promoted to me because Amazon has the cheapest price or an iPad even though I can buy an iPad on apple.com for $10 cheaper?
I think you are misunderstanding the issue. Amazon is selectively determining to show the "buy box" on a specific product page based on whether the prices for that SKU on Amazon are competitive with prices for the same SKU on other websites.
In your example, Amazon might not have a buy box for a given iPad model if the same model was available on apple.com for less. The presence of cheaper non-iPad tablets would not impact the iPad buy box.
I was referencing the article which seems to indicate it’s more than just a buy box issue.
> Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away. The net effect, as Amazon itself wrote, is that "prices will go up."
> Sounds to me like Amazon has found a loophole in the law.
No, not necessarily. This is just what companies always do. As long as it looks like they're "trying" to comply, they don't get in big trouble. In the meantime, they get to make microadjustments to their policy and find out exactly how far they have to comply until they're legally in the clear.
Say Amazon offers three items all equivalent: one is priced at $9 and two are priced at $9.50 all are Prime.
If the vendor for the $9 offers it for $8.50 elsewhere and Amazon starts focusing on a $9.50 offer is that "better for the consumer"?
If the $9 doesn't exist and there are two vendors at the $9.50 price and one has a higher review history but offers it lower elsewhere is Amazon making things better by focusing on the other one?
The "buy box" is a product-level feature, not a seller-level feature. On any given product page, there may be multiple sellers with offers (one for $9, two for $9.50). The $9 offer would be prominently displayed in the buy box and the other two would be in the "other offers" section.
If another site starts selling the same product for $8.50 (regardless of who the seller is), Amazon may hide the buy box and put all the offers in the "other offers" section to avoid advertising an offer that isn't the best price available online.
Consumers price compare across sites, and Amazon wants to maintain its reputation for low prices (and in truly egregious cases prevent sellers on Amazon from price gouging).
Except they do the same for non-new products which muddles things tremendously.
If I don't see a price I assume it is out or they only have used ones. Certainly occasionally I have seen scalpers when I double checked anyway to see what the price would be if it returned but generally Amazon caught maybe half the scalpers in my experience.
Having a signal that means "you could get it less elsewhere" be the same signal as "I only have scalpers" isn't exactly good for consumers.
Also this implies that Prime shipping is worthless given they exclude it from the calculation...
The max price filter in the left margin is worth the effort to find the same product selling cheaper but only displayed a few pages later than than the primary search results.
Is buying from the buy box ever to the customers advantage?
> what they recommend is in the consumers immediate best interests.
How? Amazon routinely recommends products to me that are objectively inferior compared to other products. For example, I just searched for "peak design travel tripod" and the number one result, which is also marked with "Overall Pick", is a tripod made by a company with the name of KINGJUEEQUESTER that looks like it's made out of cardboard tubes, but at least comes with a free 21 piece lens filter set and selfie stick for $18.99. And it has 3000+ 5 star reviews that are almost nearly identical. "Edward Von McTavish: The KINGJUEEQUESTER tripod arrived. It is of the most impressive quality. The Leg Lock feature fulfills my needs. I recommend for you."
The thing I'm actually searching for isn't even on the first page of results. It's on page two, under "More Results" and has a title of "Peak Design Travel Tripod (Carbon Fiber)" and is priced at $599.95 (the same price you'll find on Peak Design's site).
How is it that showing me anything other than what I searched for supports me as a consumer?
It’s product placement. Happens in retail and grocery all the time. Sellers pay to have their products at eye level, stores optimize placement to boost spending.
Now that it’s digital it’s illegal?
This is a good point and your comment below ( https://news.ycombinator.com/item?id=37768419 ) highlights it well. What people don't realize is that this is in the interest of the consumer. I used to work at Amazon (although not on any of these teams) so that's probably why I know that "see all buying options" means the price is not competitive. As a consumer I value this.
Amazon scours the web to make sure their products are competitively priced. So if a Western Digital external hard drive is $99 on NewEgg, then Amazon wants to sell it for $99 or lower. If it's a 1P product (i.e., Amazon is the seller), they can easily price match in real time. But if it is a 3P (third party seller) product then Amazon cannot take that action unilaterally take that action since it is the seller setting the price. So the best they can do to protect their customer in real time when their crawlers detect a lower price elsewhere is to hide the buy box behind the "see all buying options" button.
I'm sure when this feature was rolled out, Amazon's sales must have dropped. They are taking that short term hit in order to protect customer trust in the long term.
How does an extra click help the customer? Unless the customer used to work at Amazon and specifically knows that "see all buying options" means "scour the internet to find a better price, it should be easy this time".
They aren't hiding the better priced items behind an extra click, they are hiding the worse priced items. If you buy something listed in the "see all buying options" it means that you are spending more than you have to, as you will likely be able to find it for less elsewhere, whereas the normally presented items are the ones Amazon is selling for the same or less than elsewhere.
This sort of practice is not as uncommon as one might assume.
It is extremely common for manufacturers to set a minimum advertised price (MAP) on the products they sell to retailers. This is done to keep the cost of, say, luxury goods above a certain value, or to ensure that even if demand falls off for a product, the product is sold from official channels at a price point that covers the raw-materials-plus-labor cost so the manufacturer isn't fundamentally selling at a loss. These agreements are generally enforced by both contract and tit-for-tat... Sometimes there are contractually-encoded penalties for going under-MAP, but sometimes the agreement is more "off the books..." If Amazon decides those Gucci purses are just taking up warehouse space and slashes their price to clear them, they can do that... If they don't want to have any Gucci purses to sell next year through official channels.
Why is this behavior legal for manufacturers but maybe not for Amazon? I can see no other reason than the law is path-dependent and arbitrary. "Fair trade" is a concept we invent as we go.
(Incidentally... As a consumer, it's useful to remember MAP exists when you hear whispers of "don't buy from unauthorized resellers." Sometimes the goods you get from those channels are shady, but sometimes they're exactly the same as the official-goods channels, shoveled into the back channel by an official retailer to clear warehouse space and reported to the manufacturer as 'damaged, lost' to preserve the MAP kayfabe).
> Why is this behavior legal for manufacturers but maybe not for Amazon? I can see no other reason than the law is path-dependent and arbitrary.
Market share => market power => different regulations.
(Of course, I would personally prefer to ban this behavior across the board; I just wanted to also point out that treating Amazon differently could plausibly be reasonable)
Those arrows also flow in reverse just as well. Whatever arbitrary decisions are made will advantage some other entity which may or may not currently exist.
Different regulations => market power => market share.
This is explained in the OP article linked here...
Although I guess not everyone actually reads the articles so reiterating in the comments is useful.
> Still, why can’t a third-party seller offer a lower price outside of Amazon? Good question! That’s where the scheme gets very clever. Originally, Amazon imposed contracts, as the FTC noted, “barring all sellers from offering their goods for lower prices anywhere else.” But Europeans, and Senator Richard Blumenthal, complained about these price parity agreements, so Amazon dropped its explicit contractual requirements in 2019.
> However, this change was a farce. The firm simply did through code what it couldn’t do through contract. "Amazon,” claims the FTC, “has implemented an algorithm for the express purpose of deterring other online stores from offering lower prices.
> Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away. The net effect, as Amazon itself wrote, is that "prices will go up."
> A new filing in California's suit against Amazon reveals that sellers live "in constant fear" of retaliation from Amazon if they allow their goods to be sold more cheaply elsewhere.
Tangential, but out of context quotes used in your sentence makes me think you're lying no matter what you're saying. Or else you would have kept it in context and used the whole quote.
Not to defend Amazon in the slightest. Just tired of seeing Breitbert quality clickbait OOC quotes everywhere.
> That means that sellers can't offer their goods more cheaply than they do on Amazon – even if it costs them (lots) less to sell in Target or direct from their websites.
Is there a way to get around this by having the list price higher than Amazon but run specials for most weeks of the year that undercut Amazon? Could that only be a viable strategy if Target is the final merchant but not on the manufacturer's website?
Especially the media companies! They put artificial limits on the range of acceptable thoughts, acting as both a muzzle and a noose around the neck of the public.
It’s a strawman because GP wasn’t commenting on whether or not there is a technical way of reaching the public, but rather that media consolidation hurts the public. Those are orthogonal issues.
It’s not orthogonal, consolidation of media is only important if it keeps people’s messages from getting distributed broadly. Is that really a problem in 2023?
The “media” - ie ways to reach people is less consolidated now than any time in history.
I can invent a new protocol and app right now thats 100x easier to publish on and access. No one is using yet, is the harm of propaganda stories in corporate media lessened in any way by the fact of that tools availability? No
Yes, that doesn’t mean the corporate media doesn’t have a huge amount of influence due to their consolidation. Technical ability to communicate is not the only factor in power of reach. I’m not sure how else to explain it.
Right because in the good old days, people weren’t propagandized to think it was dangerous for Black and White people to drink from the same water fountain or go to the same school, that gay people should go to jail (“anti-sodomy laws”) and that it’s a sin against God to allow interracial marriages (laws against miscegenation).
Capitalism is based on competition, but the rules of said competition are largely written by the winners of said competition - this isn't a perversion of capitalism, this is capitalism as it has always functioned in reality. Like, oil companies get significant political sway over our policy on climate change, which is why over the last 40 years, the biggest sources of emissions reduction were the 2008 GFC and the 2020 lockdowns.
The #1 reason why Comcast hasn't been ousted by local community fiber networks is because Comcast politically lobbied to make it illegal. This is normal. The solution is to cut the moneyed interests out of politics as harshly as possible, because otherwise we'll always require the permission of junk-food companies before we limit how much sodium is permitted in kid's food.
Lobbying needs to be rate-limited to match what individuals can say.
Level the playing field by making the largest possible political contribution equal to a multiple of the minimum wage which one could reasonably expect someone earning that to donate in a given year, then require that each contribution be made using a check or money order mailed with a hand-written note in a first-class envelope.
I object a lot less if the trustbusters don’t stop with tech and apply their hammer equally to other industries, agree with telcos/ISPs (I’m not sure how uncompetitive airlines are, they seem really low margin). I haven’t really seen evidence that Khan is interested in going after non-tech companies though. (Would love any pointers to the contrary.)
You have to add Microsoft to this list unless you live in complete denial about the massive monopoly that they have in office IT. And they are actually the first that should be broken up, splitting the office suite from everything else.
Microsoft should be the first one to be split up. Their dominant position is more pervasive than any other market because the operating system people use in their computers is the gateway to get too these other services.
you can't use 99% of apple services on Android. no apple maps, no find my, no iMessage, no apple calendar, no reminders.
nobody forces people to use windows either, but yet a company having 60% of the global phone market is pretty comparable considering that's literally probably more phones than people actively using windows daily
If Apple had >5% desktop market penetration, you’d have a point.
They should definitely open up iOS to installing apps outside the app store, but their position isn’t nearly as abusive as Microsoft’s. Even their 50-60% share of the mobile market is pretty competitive compared to Windows.
Make corporation tax progressive, resulting in it being easier for small companies to compete with big ones, without requiring the government to decide what is and what isn't a monopoly.
If you don't think about it, could create a weird set of local/product/etc. monopoly like things instead. Not thinking about isn't an option because it ignores the incentives if you force limit sizes.
Yes definitely agree a hard limit on sizes doesn’t make sense, but I just think it’s not going to be a problem any time soon with the current state of affairs in the US economy.
I honestly think that this is underestimating how good companies can get in optimization their positions. The smaller companies would inherit these abilities from their "parents".
At the very least a line can be drawn when a company cross-subsidizes a barely profitable enterprise to the tune that they're drowning out competitors, or when they exploit workers so absurdly insane that they're forced to resort to piss in bottles because the algorithm penalizes them for taking a civilized bathroom break. AWS makes boatloads of money on AWS and uses that to stay afloat with shipping stuff.
All of them enjoy market domination in their respective areas of expertise. Their size makes them effective monopolies and their behavior has many times ruled anti-competitive. Competition between them is insufficient and they have been convicted of organizing in monopolistic manners before.
For consumers and the market as a whole it is more healthy if they are broken up into smaller companies.
Even if they weren't near monopolies in their respective fields, I think we should be wary of permitting the sort of concentration of power that arises from the existence of trillion dollar corporations.
Governments' and companies incentives are highly different. I live in Turkey where not every service is corporate like it is in the US. I can see in practice that a competitor service offered by government happens to be that real competition which drags the prices down.
Only an ecommerce store of that list, but many other things. Though the store doesn't really matter because competition is already rampant in the ecommerce space.
I wrote a letter to our Presidency asking about these other things you mentioned last week.
To me it does feel much worse if one company is singled out. But, yes, bring back the Sherman Antitrust Act with good enforcement.
Personally, I think much of this is in large parts the fault of one party that likes to systematically defund government institutions, so they can say "see big government doesn't work!"
FTC should go after other industries that are far more harmful to customers than tech. ISPs, healthcare/insurance, etc. Tech should be no where near the top of concerns for the FTC.
This is a political stunt. If Lena Khan and the FTC were actually interested in consumer protection, they would go after other industries first.
Tech is omnipresent, is flush with cash that it frequently uses to disrupt (drive existing businesses out and then monopolize) and has an outsize influence on people. It absolutely should be first on the list for anti trust action. and it’s Lina Khan.
The only actual monopoly in the tech industry is Google search. There is also a very concerning duopoly with Google / Apple app stores controlling all software loaded on mobile OS that needs to be forced to allow alternate channels. Besides that, I can't think of anything in tech that is actually a concerning monopoly. Amazon has no such monopoly position in e-commerce. The market share really isn't that big.
Even with Google search being so dominant, there are alternatives like DuckDuckGo, Bing, Yahoo. Many people are also starting to use ChatGPT as an alternative to some of the things they used search engines for.
On Android you can sideload apps, install alternate app stores.
Implying these companies are monopolies is an overstatement.
Big tech is no longer the disruptor. Mature big tech way too easily devolves into rent-seeking just like those other industries you listed, just with shinier tech.
Tech is still immature compared to those other industries. I believe generally the more mature an industry is, the more it moves from disruption to rent-seeking. There may be a time at some point in the future to consider breaking up tech when but right now it makes more sense to break up the more mature industries.
This was blatant monopolistic behavior, control over prices outside your platform with the threat of platform access to enforce it is a slam dunk case.
Hm, is the forced price country dependent? Because I’ve actually bought or found several products via Amazon, that I later started buying for less on the seller’s private store. Germany.
I routinely see higher prices on German Amazon than on other stores to the point of seeing sellers for third-party products asking for almost twice of what an item would normally cost when bought directly from a seller who doesn't sell on Amazon. For example you can buy Starlink equipment on Amazon but it'll always cost a good 20% more (or more) than you'd pay when buying from Starlink directly.
I'm not sure if the forced price exists in Germany for first-party sellers but it might explain why there seems to be a cottage industry of third-party sellers selling overpriced goods on Amazon. That is of course in addition to the universal problem of a dozen brands with names lifted from a word generator selling the same dropshipped white label product out of a factory in China at vastly different price points to create the illusion of choice.
He thinks Amazon is acting in good faith, and he's also an ideologue who doesn't see anything wrong with Amazon deplatforming anyone who passes along lower costs on other platforms.
Here are some possibilities (not claiming these are practical or a solution):
The first is splitting Amazon-retail from their other products (Alexa, Ring, AWS, etc.)
The second is splitting Amazon-logistics out. I'm not exactly sure how this would work, but it could be argued that Amazon logistics could operate standalone.
FBA as a separate business would be interesting for sure. It would separate out the value of Amazon marketplace from the value of outsourcing your order fulfillment logistics.
All I ever wanted was to be able to search "shipped and sold by Amazon" results only. If this is the heavy hammer needed to get to that end result, so be it.
The first one seems obtuse. If here were some 1960s-style comglomerate that sold shower curtains and offered professional bowling ball waxing, with a 95% monopoly in both...
Why would splitting it out into two monopolies improve anything? Even if there are some unknown, misunderstood synergies between the two businesses, will they not just collude in that way that bridge players do, without any overt actions that could be punished?
>will they not just collude in that way that bridge players do, without any overt actions that could be punished?
Currently, they get that for free by virtue of being the same company. If they were separate companies, it would require actual collusion and may, depending on the specifics, be illegal. It's also be less likely to occur since they'd need some motivation to do so. Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
> If they were separate companies, it would require actual collusion a
I don't play bridge, never learned. A game consists of two teams of two players each. My vague understanding is that you might win if a partner gets ahold of a card that you discard, but that you can't know what card that is without saying so (cheating).
Good players can tell what cards their partners might need, and discard anyway. This isn't cheating, it's just good play.
In a court of law, the former is definitely some violation of antitrust law. But the latter is just good business. And even if it weren't, no overt acts have been committed that could lead to successful prosecutorial outcomes.
Philosophically, it may still be collusion. Good luck doing anything about it.
> It's also be less likely to occur since they'd need some motivation to do so.
Game theory supplies that just fine. If I have a monopoly in A, and you a monopoly in B, then I might just protect your monopoly in B without you requesting that, without you giving me instructions.
And from that point on, if you see a place where you can hurt or help me, you might choose to help without me requesting it or asking. Because if my monopoly on A is hurt... I can no longer afford to help you without you asking. Supporting me is a no-brainer. At least if the other party isn't a complete imbecile, they can see it. While there's no accounting for stupidity (second most powerful force after compound interest), we can already assume that the leadership of these companies is non-stupid just because of the success they've already achieved.
> Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
When they break these companies up, they don't fire 100% of management and rehire. Most of them know each other. Most are friendly with each other, if not friends. Sure, employee attrition will eventually break those bonds ten years down the road. But they already know how each other thinks.
Silent collusion, without so much as a wink or a nod, is definitely within the realm of possibility. The previously existing social connections are present. Their goals were largely aligned before, and nothing has occurred to de-align them. Mutual success may be easier than individual success. A sort of "corporate altruism" can emerge.
Evolution does this shit all the time with symbiotes. It's not like their colluding to co-evolve with each other. You won't find conspiracy evidence in the fossil record that they just started helping each other, it only proved to be a better strategy than individuality, and so they went with it.
To a vastly lesser extent than when it's one company with one board and one CEO in charge of multiple business units that would be unrelated after the breakup. If you break off Costco's chicken selling business from the rest of the store, the chicken business isn't going to keep their prices so low to boost the other company's sales because it costs them too much money to do so and they get far less benefit from boosting the other company's sales than when they were the same company.
> If you break off Costco's chicken selling business from the rest of the store,
It sure seems like that, but in the real world we do have many counter-examples where a singular company does do the loss leader thing for a long while, going into the red year after year. Often, it's never clear why or how they could think this was a winning business model.
The chicken-selling business might do the same, and their justifications for doing that might never be sound, they might not even be the reasons why they're doing it, but just some post hoc rationalization to themselves and the real reason is poorly understood by all involved.
If the rest of Costco sees this happening, are they going to step in and sabotage the chicken-sellers? Lord knows it drives some traffic to their stores (they might be unwilling to study that and write reports, as it could then be used against them if the FTC comes after them again, but they'd still notice). If they can subtly act to somehow ease the pressure, or make that worthwhile to the chicken-sellers without leaving a paper trail, they'd be fools not to do it right?
Of course, without exotic economic principles, that can't last forever. But unless you're claiming that there are business units for AWS are deep into loss-leading, your analogy only applies very generally and it's difficult to see how they could fall into similar snags.
The latter seems plausible to me, but the former makes no sense. If the problem is that Amazon-retail has too much market power, how would splitting off AWS help with that problem? Amazon-retail would still have the same fraction of the retail market as before.
Splitting off AWS wouldn't be enough on its own, but I think the argument would be that Amazon makes a substantial amount of its operating income from AWS (70% in the latest quarter: https://ir.aboutamazon.com/news-release/news-release-details...), which allows it to fund anti-competitive marketplace practices like undercutting competitors at a loss to force them out of business. It would be more difficult to sustain such practices without AWS income.
Amazon marketplace, AWS, Whole Foods, Twitch, Fulfillment by Amazon, and maybe Amazon Studios could all be separate companies. I think Amazon marketplace would also be forced to end some practices like not allowing sellers to have lower prices elsewhere.
One option is to divide AMZ along business units. Thats the natural, easy way to do so. Itd cause least loss of value to the shareholders.
I disagree. AMZ babies would still be essentially monopolistic in their markets. Nor do I think shareholder value, after being inflated through monopolistic abuse, is sacrisanct.
Divide AMZ slicing through the business units. Make a half dozen vertically integrated baby AMZs. They all have access to AMZ IP, held by a separate company that can license it out to third parties (ie if they don't license their web tech to, say, Best Buy this AMZ baby has no revenue and goes to receivership since all other AMZ babies don't have to pay licensing fees).
EDIT: I almost forgot liability. Transfer all current known and unknown AMZ liabilities, including fraud and sale of fake goods, to the baby AMZs.
I’m suspicious, I think most people underestimate how hard it would be to split companies.
If you have everyone in the company go dig holes for 24 months, the stock price would tank and much value would be destroyed.
Likewise splitting is a massive effort that amounts to burning resources that wouldn’t otherwise be spent.
Now part of the point is to destroy the monopoly, which reduces company value too. This is a subtle point; we are probably ok with this because implicitly this is profit extracted as rent and which should really go to competitors. We’d probably say the value here is being redistributed.
But the monopoly rent is different from the actual OpEx and CapEx required to restructure. I really want to see even a rough quantitative analysis here before making any commitments.
The approach you put forth here seems maximally complex and inefficient as an end state, FWIW. Shared access is going to be a nightmare to operationalize. Much better to cut at existing business unit org boundaries.
If you imagine the situation in reverse, where they were two independent companies it would make very little sense to merge them. One is a high margin technology business and the other a low margin distribution company. There would be very little synergy.
Amazon Retail (Vendor Central), Amazon Marketplace (Seller Central), and Amazon Brands (Amazon Basics, Pinzon, etc.) probably need to be separate companies. You also have decide where Amazon Ads and Amazon Registry will live.
Currently these four services all exist under the same roof and it gives Amazon basically unlimited power to unilaterally destroy entire companies or brands with zero consequences and no effort.
Realistically, this rot runs so deep I'm not sure how you can stop it. The US economy is built upon a bunch of these hidden taxes. Healthcare, the way insurance works and hundreds of middle-men between. Google baking in advertising search terms into things you search for. Amazon subsidizing delivery by baking it in as a hidden cost which causes in-store goods to rise in prices to match. Large real estate firms like Greystar using algorithmic models to raise prices uniformly across the US rather than based on local availability.
It's a good step, but our economy is dominated by rentseeking behaviors from large corporations buying their way into monopoly and then warping the rest of the market. And unfortunately I feel like this case will end like many others, with a handshake and a promise to 'properly show consumers how much our stuff on Amazon costs'.
Lina Kahn is the worst type of politically motivated bureaucrat. Instead of executing the law, seeks new interpretations so that she impose her world view on others. She's never created or done anything of value other than be a student or a bureaucrat.
Hopefully this case will be another in her long list of failures.
I think US anti-trust law has been far too toothless for far too long. I wish we had some politicians from the 1920-30's that would actually go after big companies instead of taking bribes. Did I say bribes? Sorry I meant campaign contributions.
I mean, I doubt you have any understanding of actual anti-trust cases. But by the time standard oil was broken up it was down to 60% market share and the price of oil continued to fall.
The only monopolies that have truly existed in the USA are government granted ones.
One of the benefits of a tightening economy is that people pay a lot more attention to monopolies. The pain inflicted by a monopoly reaches a boiling over point when money is tight.
What magic does apple work behind the scenes to avoid scrutiny? If we're talking about hidden taxes, surely the only app store allowed on 50% of smart phones taking 30% is a hidden tax?
And if not that, surely visa/mastercard's fee is it's own hidden tax?
These are clearly different scales of manipulation. On one hand, you have a brand controlling their own luxury devices, and on the other, you have a brand controlling literally everything else.
Walmart? Every grocery store? Its hardly required to shop at Amazon if your point is it's a true monopoly, I'm not sure what domain you're trying to say they're the only competitor in.
Prioritizing your own brand has been the norm at every grocery store I've ever been to.
But Google, Amazon, Microsoft, Facebook would all be higher on my "FTC TECH TODO" list than Apple so I'm not sure why you focused on Apple in this "whatabout"?
Interestingly one of the possible starting point for this investigation was a complain from Amazon to the FTC.
I am eagerly awaiting the acrobatic justifications Amazon lawyers will have to find out to justify that their MFN clause is perfectly legal without contradicting their own claims of the 2013 case...
Well Google, Amazon, and Facebook simply don't have monopolies, though if you define the market as iPhone app, then Apple does, no argument. And the harm to consumer is incredibly easy to spot, a 30% tax on any app purchase or in app purchase.
Each of the web companies also have one of the most comically low barriers to change of any 'monopoly'. When att was broken up it was truly the only phone carrier for much of the US, switching was borderline impossible. You could replace Google search in the next 30 seconds.
I don't understand why you would "Break-Up" Amazon? Why can't we just have common rules that says "Hey, we will fine you $50M a day you continue to do X,Y,Z?". Then we have precedence and law to back up doing monopolistic things.
How does breaking a company work? I mean... we broke up Microsoft and that only slowed them down for a few years.
Yeah, the breakup was overturned on appeal, and the resulting settlement was watered down into "we'll reduce the number of tentacles between Windows and IE".
I think this demonstrates a way in which all centralized power becomes, for good or for ill, partially absorbed into state power. A major country's government will always be able to exert lots of leverage against, e.g. tech companies, whether for legitimate or illegitimate reasons, it matters not which. They can always threaten regulatory or legislative actions which would be annoying or devastating to shareholders. Hence, behind-the-scenes conversations will always have an implicit fact of "please censor as we ask, provide data and backdoored access to which servers we ask, please don't take on the wrong political causes, elsewise there will be consequences."
Goodness knows that if the intelligence community or state law enforcement has ever wanted access to anything in AWS, now of all times would be when they have the easiest time asking for it! Anything to curry favor with someone who can speak a word of support to federal agencies and state officials.
I guess this makes me a little demoralized about the utility of "anti-big-tech government actions," because to the extent any of these actions succeed, it's probably just sending a clear message to enhance state influence/access of other tech companies. If I get excited (and I want to) because "Amazon might be broken up!!1!", maybe that just means Google finally got the message and decided to put backdoors into <insert platform here> on behalf of <insert agency>.
What does this mean realistically? If I were Bezos, would I just have more companies on paper? Maybe more manangement and different companies doing business with each other but they all have the same owners?
I don't understand the people in this thread defending Amazon. They're just an impersonal corporate conglomerate that doesn't give a *&$! about you. Capitalism is about competition and the more competition the better.
I think the general idea across many companies in the U.S. is a good one: breaking up monopolies that are more vulnerable to external, globalized forces. The goal is to fertilize the business landscape with their metaphorical "whale-fall carcasses," enabling a flourishing of smaller, competitive entities. This strategy aims to revitalize and fortify the American economy against the looming tidal wave of foreign competition. Although this approach may be painful on a local level and even humiliating for some individuals, it's ultimately a sound strategy for macroeconomic management.
yes , one good reason for the break-up, that also Scott G. explains in this new vid: https://youtu.be/jl-SRHMzZHk?si=o2LpMMESWEIrejld
( Interestingly he his Amzn stock holder, favors the breakup, and believes the parts more valuable than the behemoth currently itself. thus a Win,Win,Win !)
652 comments
[ 4.3 ms ] story [ 413 ms ] threadBut a new act would make the process a lot simpler. Judicial precedence is powerful and doesn't change quickly or easily. A new law would make precedence for the old law moot.
IANAL.
The EU’s Digital Market Act is a good step.
It is a difference in how the text is read for sure, but the text is badly written.
It says ""Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. . . ."
The immediate problem with this is easy. he act does not define restraint of trade, either, so courts were left to define it.
This led, nearly instantly, to limiting the act to those contracts that "unduly" restrict trade using the rule of reason.
"To treat as condemned by the act all agreements under which, as a result, the cost of conducting an interstate commercial business may be increased would enlarge the application of the act far beyond the fair meaning of the language used. There must be some direct and immediate effect upon interstate commerce in order to come within the act."
Standard Oil, quoting Addyston Pipe & Steel Co. v. United States (1899).
Standard Oil also goes into the fact that restraint of trade is not defined anywhere in the act, etc, as further justification.
All that has happened since then is deciding what "unduly" means for this section
At this point, the sherman act is 133 years old. It would be good to update it and make the language less subject to interpretation.
Bad precedence and an unclear act makes Lina Khan's actions very difficult, but not quite impossible.
The split nature of Congress, its showmanship and quorum rules make getting a new act very difficult, but not quite impossible.
We should be pursuing both paths in parallel.
No, but she's totally ineffective at knowing where to push or not - so it will be impossible, unfortunately.
The only reason I keep it is for the video service which I'm guessing is the same for a lot of people.
Which will start having ads unless you pay a fee for the ad-free experience starting next year [1]
[1] https://www.npr.org/2023/09/22/1201028854/amazon-prime-video...
crowdsourced auto-skip for in-video adverts.
The creators I tend to watch the most these days either don’t have sponsorships or they only run their ad at the end of the video in which case I just stop watching or click to the next video.
Even the lame concept of throwing up Pateron supporter's names on the video for mere frames scrolling by is just moronic to me. Do people really think they are special for having their username flashed on a screen? What value/meaning is derived from this?
Someone is supporting a creator whose content they like and the creator is publicly saying thank you.
How is this confusing to you?
how is their sincerity (more to the point, lack thereof) confusing to you?
How deeply cynical and also, besides the point; even if you believe all creators don't give a shit (I believe many do), people still like being thanked.
I mean, clearly you don't ...
But the idea of replacing Amazon with Instacart is definitely intriguing to me
Try a local hardware store, not a big-box like Home Depot or Lowes, though they’re likely to have it too! I’ve found that so long as I am patient, local hardware stores are happy to order things for me.
Amazon is great at instant gratification and that’s about it IMO.
I use Target for many things now, they also have free shipping and usually lower prices than Amazon
Even where prime price is the same as other+delivery this wins out. Though at each price rise or other change I have to rethink if I consider I'm getting a good deal.
Though, to be fair, the switching cost for a consumer to start using Target.com (for example) isn't that high. I go to vendors like Target.Com, HomeDepot.Com, BestBuy.com and AliExpress.com for most of the things I used to use Amazon for.
Have you experienced any unexpected pros and/or cons from using those vendors instead of Amazon?
I'd love to hear a list of more, if anyone has them - I suspect most of them don't focus on Australia.
I don’t really see the issue here, since this appears to be a win-win for both consumers and sellers. Consumers get the cheap stuff they want with free shipping, and sellers get access to hundreds of millions of customers and the volume of sales needed to survive in a low-margin business. The fact that sellers are willing to pay these fees suggests that’s it worth it for them to be on Amazon. If it wasn’t worth it, they would be somewhere else.
Except they are, otherwise consumers wouldn't use Amazon. Whenever I want to buy anything, I check Amazon first. 9 times out of 10 it's the same price as every other retailer with the added benefit of free shipping and free returns. If that wasn't the case, I would have no reason to use Amazon.
That's the problem! The issue is that Amazon forces sellers to raise their prices elsewhere, so that Amazon is the best deal for a shopper. But if Amazon didn't have the power to do that (if it didn't have a monopoly as the gateway to online shopping) then other retailers would be able to lower their prices.
That's the "tax" referred to in the article. By inflating prices across the board, but still ensuring that they're the least expensive option, Amazon retains customers and increases profits. Individual consumers choose it because it's the best deal, but the system as a whole loses out because prices are higher than they "should" be.
I don't use Amazon because it's cheap. I use it because it's convenient. I can do 99% of my non-groceries shopping on Amazon and I get 30 day free returns on most products and next day delivery for some of them, not to mention free shipping on most things I buy (or near-free shipping if you consider the cost of Prime).
What's been pushing me away from Amazon recently is that they're not very good (or even increasingly worse) for some categories of products and in many cases search results are cluttered by Chinese dropshipping products to the point I can't find trustworthier brands at all or for categories I'm less familiar with have to do research to figure out which brands actually exist outside of Amazon's Chinese dropshipping hell. And again because of the free returns (and in the case of non-free returns the A-to-Z guarantee still often resulting in free returns or full refunds) this is not a cost issue but more about the reduction in convenience.
Mind you, I live in Germany and German Amazon is likely different. But Amazon is still the biggest online retailer here despite not being the cheapest. Arguably it still maintains the illusion of being the cheapest because of the free shipping (if you pay for Prime) and the constant barrage of "deals".
I’m extremely curious to see if the evidence shows that Amazon’s practices actually drive up prices in the market or whether there’s not much impact.
I suspect the answer may vary drastically depending on the product category.
In this hypothetical example with demonstration numbers for effect, you could sell your cup for a minimum of $1.50 on Bmazon and $3 on Amazon - everything above that is pure profit. In such a scenario, you would obviously much prefer selling at $2.50 on Bmazon over selling for $3.50 on Amazon, since you make 2x the profit, and the average customer would much prefer to buy the device at a ~30% discount! Unless the customer legitimately derives an extra $1 worth of value from using Amazon instead of Bmazon, in which case Amazon gets the sale anyway.
But, if 90% of your sales are on Amazon, then you can't offer this deal that both you and the customer are legitimately incentivized to do, because you'd lose 80% of your revenue.
In such a scenario, Amazon has no competitive incentive to reduce their fees! It suppresses market signals towards lower-overhead sales platforms, i.e. you have no way to signal to your customers that a sale on Bmazon benefits you twice as much as on Amazon.
Basically, Amazon is trying to abuse a network-effect instead of actually competing with their competition. They're deplatforming anyone who doesn't voluntarily price-fix for them. It's insane.
Thats the issue.
Consider the scenario:
Amazon executive want more bonus, so they decide to increase retailer prices by 10x.
Now, retailers cost have increased for Amazon by 10x. But other distribution channels remain the same.
So, retailers should increase prices on Amazon only. But Amazon forces them to increase prices everywhere.
This interference of Amazon on other business is the issue
Amazon sees that it's profit is lower
My opinion on this is that e-commerce is extremely competitive and consumers are already highly motivated to pay the least amount of money. If it were cheaper for consumers to go elsewhere they would, and sellers would follow.
I’m not planning to leave Amazon, but I’d love to find good alternatives.
For more niche items I buy in bulk from different the manufacturer's site. To be honest it's a little more work but to help retailers it's worth it. Sometimes I have to pay for shipping but I do remember that I'm saving 130 dollars a year by not being Prime.
Sellers are just complaining that they can't access Amazon's audience and do as they want. Luckily there's eBay, Shopify, Wix, etc. etc.
For one thing, how would you even right and enforce a law on maximum size/impact of a company? How would this even politically get through? There's already enough push-back against enforcing laws like "don't form cartels". The pushback on maximum size/impact of a company would be even more intense.
In any case, as the article states, "Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away.". In other words, e-commerce is not extremely competitive.
This is a good thing, and those sellers can leave Amazon.
Amazon binds its sellers over to something called Most Favored Nation status. That means that sellers can't offer their goods more cheaply than they do on Amazon – even if it costs them (lots) less to sell in Target or direct from their websites. This means that every time a seller adds a dollar to their Amazon sale price, they have to add a dollar to the price of their goods everywhere else, too.
After a bunch of state AGs filed lawsuits against Amazon over this, the company promised to cut it out.
They lied.
A new filing in California's suit against Amazon reveals that sellers live "in constant fear" of retaliation from Amazon if they allow their goods to be sold more cheaply elsewhere.
Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and others do the same thing. The result is the lowest price for a given product on all sites. This is unquestionably good for consumers.
If the price is higher then the fault is simply that of the seller for raising it. All e-commerce sites want the lowest price for their customers. Of course, people don't see nuance and just see BigCompany bad.
The move that Amazon's price be no higher than offered elsewhere is the most pro-consumer move possible. Hilarious people are complaining about it. Any second-order effects of this are on the actual seller, not Amazon.
Your conclusion that this increases end pries for consumers has nothing to do with Amazon, but the sellers themselves.
Yes, but at the end of the day Amazon to remove the seller for any reason, so even if the FTC succeeds here, Amazon will simply purge those sellers who are not offering the best price, even if not explicitly stated.
There is no reality where Amazon allows their site to be inundated with higher priced goods compared to competitors.
Dictating how you sell elsewhere is a clear step beyond that.
There is no obligation to sell on Amazon, nor a requirement for them to raise prices on other platforms. They could simply offer the lowest price everywhere. The result? Lower prices for Amazon customers. If they raise the price, then that's the seller's fault, not Amazon.
While true, this ignores the important point that Amazon is only able to do this anti-competitive practice due to their market dominance that effectively forces many sellers to sell on Amazon.
> nor a requirement for them to raise prices on other platforms.
That is what this whole thing is about. Sellers that sell on Amazon aren't allowed to sell for lower prices on other platforms that are cheaper to sell on.
If Amazon was able to offer lower prices for its customers by offering sellers a marketplace with lower costs compared to competitors that would be great. Instead, they abuse their market dominance to prevent any competitors from offering lower prices by being more cost efficient for sellers. This is extremely nasty as it effectively prevents any competitors to Amazon from building a market share since consumers will have no price incentive to switch and sellers will not want to switch due to the smaller market share on those competitors' platforms.
It could not be more clear that this is anti-competitive behavior achieved through abuse of a dominate market position.
Yet here we are with sellers WANTING to sell their items at a lower price on places other than Amazon, but if they do, they'll go out of business. That doesn't sound pro-consumer.
I'm a consumer. I'd like to be able to buy items for the lowest price the seller wants to offer me. That's not happening in some cases because if they do, Amazon will exclude them and they'll go out of business. Yeah, definitely not pro-consumer. Pro-amazon, sure.
Do you agree with the look and feel lawsuit that Apple had against MS? Or think that Roku, Amazon, Google , etc did something untoward because they came after Apple with set top boxes?
As far as Amazon copying others as a marketplace owner, ever heard of the Kirkland’s brand? Store brands have been around forever.
https://www.reuters.com/legal/litigation/amazon-copied-produ...
> thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company's largest growth markets.
A big company can stall a copyright lawsuit for as long as it wants. Small companies cannot win against a large compamy like Amazon in court.
https://www.latimes.com/archives/la-xpm-1986-07-14-fi-19337-...
Especially when they can just twist the court system however they wish.
Small victories like the chain wrench lawsuit against Sears happen. But they are rare.
https://www.chicagotribune.com/business/ct-bionic-wrench-sea...
Your response shows that you did no read the article. They specifically show cases where Amazon copied sizes:
> Among the victims of the strategy: a popular shirt brand in India, John Miller, which is owned by a company whose chief executive is Kishore Biyani, known as the country's "retail king." Amazon decided to "follow the measurements of" John Miller shirts down to the neck circumference and sleeve length, the document states.
And CVS follows the formula of name brand OTC drugs down to the very ingrediant to make house brands. You can’t copyright a shirt measurement.
And before you call me an “Amazon shill”. I got PIPed from Amazon less than two months ago. I’m the last person who has any love for Amazon. Honestly I don’t have any feeling either way. It was just my 8th job over 25 years, they gave me a nice check and I had a comparable offer within two weeks.
Like with the sears example, large 'mall' like organizations do outright steal designs and stonewall the original copyright holder.
A random housebrand does not have access to Amazon's statistics, logistics or reach. Amazon is looking at stats that they hide from their providers, to choose who to copy, then out-price the original seller. (Due to inhouse logistics)
They are not even remotely the same thing.
And Walmart sells a lot more than Amazon.
You don’t think that every store knows how to undercut other products in its own store with house brands?
Dictating how retailers can interact with your competitors is anti-competitive. Dictating what prices they can offer when they put up listings is a part of that, it is anti-competitive.
No seller is obligated to sell on Amazon to begin with, so this entire premise is false.
Clearly the FTC disagrees with your logic, and I'm glad they do. FedEx, UPS and USPS should be sued too if they did what Amazon is doing.
If the FTC doesn't get them, rest easy. At least Europe knows how to keep their market on a leash.
You are right that this policy is very simple, it's very clear both mathematically and logically. Companies cannot lower their prices lower than their costs. If costs are variable across platforms but prices are fixed to a single value than this will de-facto result in INCREASED prices. If this policy causes someone to leave a platform, that STILL doesn't result in prices any lower than they would absent the rule.
In fact, the sheer existence of the rule is a clear statement from Amazon that they believe they have significant and durable market pricing power, since if they didn't, this policy would clearly lead to sellers and buyers leaving their platform.
In a free market sellers will leave the Amazon ecosystem and move to a platform with less restrictive agreements, resulting in lower consumer prices (albeit with less availability). That’s exactly what GP is arguing. Obviously GP believes in a free market.
Amazon’s belief in their own market power is irrelevant.
It does, since losing sales on Amazon costs them more than raising the price on other platforms then that is what they will do, since companies are motivated by profit. Amazon knows this, that as a dominant market player if they add this rules the vendors will have to abide it since they will lose more from not using Amazon.
This is how anti-competitive practices works and why we have laws against them.
If they decide to raise prices, then that has more to do with the seller than Amazon.
What's your move in this position?
You can't just imagine all companies as perfect frictionless spherical interchangeable cows. In reality companies as large as Amazon can have significant market distorting effect, while much smaller companies might have to choose between their principles and going out of business.
What I'm describing is already what happens, by the way. Look at Anker for an example.
Which is why your scenario here wont happen. Thanks for clarifying so well why your argument "there is no consumer harm" is bullshit, what you said here means you know that what Amazon does here increases prices.
Prices then rise back up as your nearest competitor was smart enough to not lower price below their cost.
Or do you somehow believe that price competition currently only exists everywhere EXCEPT on Amazon's platform?
What about taking out an ad to let people know where to buy your cheaper item? People didn't know walmart.com existed until a tv ad told them. Doesn't seem unreasonable to take some of the saving from not selling on Amazon and use it for services the platform was providing (discoverability).
Nothing changes until it changes.
Customers are so lazy they want the government do everything for them. If you don't like Amazon, close the tab and go to eBay.com or Walmart.com. It's very easy, and can be done in seconds. This isn't like telecom monopolies where you can't actually switch.
Downvotes don't mean anything. Most of the folks on here have no idea how e-commerce works. Amazon will win. It's simple to see - them losing would imply they are obligated to feature higher prices, which is clearly worse for customers and inherently at odds with what the FTC is supposedly trying to accomplish.
A company makes a product - it costs $10 per unit to make. To list and sell with Amazon, they are charged $12 per unit. To make a profit the company adds and additional $1 per unit. They sell the product on Amazon for $23 per unit.
Online retailer Foo also has a store, and provide the same services that Amazon for their online shop at $5 per unit. The online retailer adds a profit of $2 per unit. Total price $17 per unit. Retailer Foo is more $ efficient for those services as a result customers price compare. Foo is rewarded for their effi with higher volume, manufacturer is rewarded with higher profit and consumer is rewarded with lower prices. Enforcing market competition led to all 3 parties involved being rewarded. Retailer Foo over time grows a larger customer base as people learn to price compare with them and forces Amazon to stop rent seeking.
But the above doesn't happen in the real world. Amazon enforces that the retailer lower their price on Amazon to $17, while still collecting $12 per unit. The company now can sell on foo, but only by selling on Amazon at a loss. They can't afford that amount of loss from Amazon and stay in business. So Amazon avoids competition. They can't pull their product from Amazon because not enough customers vist Foo retailer yet to make up the volume.
So in the end Foo retailer is more dollar efficient, but is prevented from growing and benefiting the marketplace. Amazon leverages its outside market size to avoid competition. Market participants preventing competition is against the benefits of capitalism and harms the consumer. So, it benefits the consumer to ensure Amazon has to actually compete with the more efficient competitor and stop rent selling behavior.
Furthermore, again, no one is obligated to sell with Amazon. There are thousands, if not tens of thousands of sellers who do not sell their stuff on Amazon. It's not some requirement to do business in the 21st century.
In any case, we can come back to this case a year from now, and we can pretend to be shocked when nothing meaningful happens to Amazon.
Yes I'm the short term Amazon's customers don't get the discount they could get om Foo retail. Bit then they become Foo retailer customers and they benefit. Too many things optimize for the small scale.
Similarly Amazon's upon losing customers to Foo retailer has to become more efficient overall (or reduce its rent seeking fee) to stop losing customers. So now all of Amazon's customers for that product benefit, even those that didn't move. And potentially even those customers for other Amazon products.
This is the purpose of capitalism - marker competition. Nobody wins with laisse-fair capitalism except rent seekers. Society benefits from market competition in capitalism and this is pushing for it.
If I make light bulbs and sell them to customers through my own channels – exactly who is the rent seeker?
In my industry there are actors that are as dominant as Amazon are in retail, but there's also a huge part of the industry who just sell directly to the customer. It's your own choice. If you don't accept Amazon's terms, you don't have to do business with them. And vice versa.
For me the last straw was when Amazon Prime deliveries stopped arriving in two days despite being claimed to arrive in two. It made a difference because in two days it could be a hassle to drive to the store but in five days I can easily find the time.
Not long after that, Prime service became officially five days at my location while Amazon was shouting to the rooftops that other people were getting one day. Around this time it seemed every other retailer was trying to impress me with fulfillment and often shipping is free if you buy $200 of camera equipment or $80 worth of games, even when it isn't it isn't very expensive but it is always faster than AMZN, I even get Ebay packages from Japan faster than AMZN gets me packages from the next state.
There was also the rising problem that the quality of the listings was going down on AMZN; I'm not so concerned that the $24 product is crowding out the $17 product but rather that there are so many junk products that crowd out good products. On top of that there are many product listings that make no sense at all and it all adds up to a stressful process of sifting through a lot of junk and then not knowing if some absolute garbage is going to show up at my door.
So I went from buying something on AMZN probably several times a week to now less than once a month... I canceled my Prime subscription because I couldn't have any self respect if I was paying a subscription for something that was worse than average as opposed to better than average. And boy is it annoying to shop on AMZN now. The only thing you have to click more times than to cancel AMZN Prime is to order something from AMZN without signing up for a free trial of Prime.
https://www.law.cornell.edu/wex/monopoly "For instance, the term monopoly may be referring to instances where: [...] There are many buyers or sellers, but one actor has enough market share to dictate prices (near monopolies)"
---
I'm not replying to anything you might reply with because the rest of your comments in this thread have clearly been in bad faith. But this was one of the few smoking gun comments betraying either a biased position you hold or your lack of background on the topic, so it was easy enough to just post a link to an authoritative source + definition and just move on.
If it has “significant and durable market power” [0], it is by the only definition that matters.
[0] https://www.ftc.gov/advice-guidance/competition-guidance/gui...
It is literally Amazon’s business to offer pricing at equal to or better than their competitors.
> …the only reason they care is that they want to crush the competition.
Every company wants to beat their competition, and many (most?) want to “crush” their competition. Don’t you think Target wants to crush Amazon? Don’t you think Google wants to crush Apple in smartphone sales? Don’t you think a local retailer would love to crush Amazon for products in their niche?
The only question here is whether Amazon is doing this in an abusive way and/or a way that negatively impacts consumers.
We’ll find out in the trial…
For their own products they can.
For third-party items, Amazon is free to lower their margin.
It's annoyingly a pretty standard practice. And they will see through the "different SKU" trick simply by comparing the product images.
I have personalky spoken to wholesalers who sell widgets X (lighters etc) to retail stores.
If the retail stores undercut everyone else and drop the price below MSRP, they will exclude them in the future. There is centralized price control even though the retailers are free to do what they want.
That is done by auto dealers and anyone else who does MSRP. The difference is that they are still competing in that product category. Amazon on the other hand is a platform that stands BEHIND them. This leads to an emergent price cartel, just like in the propu lica piece on NYC real estate:
https://magarshak.com/blog/?p=385
And as you've stated, it's done by anyone who publishes a MSRP.
https://www.deltafaucet.com/for-professionals/product-resour...
https://assets.ctfassets.net/zlhl2y58oyef/3wENIXr7qvqyOoVD6R...
https://www.pricespider.com/Blog/map-policy-faqs/
This is no different than what non-e-commerce stores (such as Walmart) have been doing for years.
As a simple practical manner a small manufacturer can more cheaply sell products at their factory than the overhead of selling through Amazon or anywhere else. You often see this where mid sized brewery offers beer kegs more cheaply on location.
Amazon’s policy simply increases prices without any benefit to consumers or the overall economy.
People act as if you have to sell on Amazon. You don't. That assumption and expectation is why Amazon is dominant to begin with. Sellers should leave if they don't like it, and that will naturally soften Amazon dominance.
Imminent collapse and bankruptcy when they leave due to Amazon's dominant market position. That you can set up a shop anywhere does not mean anything when all of your potential customers are only going to the Amazon digital strip mall.
37% is not a monopoly. If you have a differentiate product, you can set up your own website through Shopify or any number of places.
And if you haven’t been paying attention, the FTC has been laughed out of court for the last five years every time it has gone after BigTech
The government has a “monopoly on the legal use of force”.
Look no further than Florida to see what an overzealous government can do when you disagree with them or the police that raided a newspaper office because they reported on police corruption.
I’m much more worried about when the police are behind me because “I don’t look like I belong” in my own neighborhood than the Google car mapping my street.
The government at least has the obligation to appear as if it's beholden to your will and rights. Corporations have no such qualms.
Also please tell me a scenario where Amazon takes over all retail?
If you haven’t been paying attention, the justice system and political parties gerrymandering hasn’t even been trying to act like they are behaving fairly.
The governor of Florida has actively been punishing companies both big and small that have been speaking out against him.
<https://news.ycombinator.com/item?id=36317559>
There are numerous examples of private corporations or non-governmental actors engaging in violence, with or without state support or sanction. There are the 100 million souls lost, respectively, to the British East India Company's occupation and administration (as a private entity, with military powers) of India, of the transatlantic slave trade by numerous private commercial operators, and of the genocide against the indigenous populations of the Americas, again much by privately-chartered corporations (as the original British colonies were). There are extant mercenary forces such as Constellis (formerly Academi, formerly Xe, formerly Blackwater) in the US, or the Wagner Group presently transacting genocide in Ukraine. There are oil companies who have initiated coups, paramilitary actions, and assassinations throughout the world. There is the Pinkerton Agency, still extant, and with a storied role in violence against labour and civil rights movements. There are railroads, with their own (private) police forces, which are in fact registered as law enforcement despite being nongovernmental.
The truth is that there is no clean distinction between State and Private use of force, lethal or otherwise. What there is in government is, one hopes, legitimacy and accountability to the citizenry rather than to creditors and investors.
But that's not how this works.
It's technically true that fiber has competition if another ISP is offering dialup in the same area. No one in their right mind would agree that's actually a competitor in anything but name.
And so it is here.
If not selling on Amazon is an existential risk for your company, Amazon is effectively a monopoly, and THAT is what the law cares about.
Amazon is not exactly cheap for sellers, so the price has to go up everywhere.
You right now can set up a site on Shopify and sell your goods.
If you are selling a differentiate product instead of cheap crap imported (or drop shipped) from China, you can create demand without going through Amazon.
For instance, I was specifically looking for Samsonite zipper less luggage because I trusted that brand and it wasn’t available on Amazon. They chose not to sell on Amazon and I bought it directly
I'm not going to bother explaining further, but thanks for confirming you don't understand the issue. It's not my job to educate you.
Amazon is saying that sellers cannot offer a fair low price to customers on other platforms if the seller can't also offer it on Amazon. This is 1) anticompetitive, 2) anticonsumer, and 3) insane.
Consider this test:
- Seller buys a crappy LED bulb from China for $0.80
- Seller is happy to list the bulb on Walmart, Target, etc, for $2.00. Net of fees and shipping and stuff they make enough money
- Amazon charges $3 in fees. Obviously the seller can't afford to sell for $2 on Amazon. They sell for $5 instead.
- However, now the seller also can't sell for $2 on competing sites. Amazon, leveraging its market share, has dictated that the seller must price Amazon's fees into pricing on non-Amazon sites, so consumers pay $5 to Target for something the seller would have been happy getting $2 for.
This is insane.
Let's use your example. The sellers should stop selling that item on Amazon, and sell their light bulb on Walmart, or where-ever. Customers who really need that will go find it at Walmart, or where-ever. This strengthens the competitors to Amazon, which is bad for Amazon and good for the consumer. The consumer also find the lower price that they wanted. Alternatively, they buy the alternate product on Amazon which would be cheaper than the inflated price (per your example). Again, good for the customer. Everyone wins in every scenario except for the seller, which is how Amazon and every wholesaler operates.
Suppose the FTC wins this case and sellers can put whatever price on whatever site. Amazon, like any store wants the lowest price. Not to mention there are only some many items you can show on the first page of results. They will find some other reason to remove these sellers and/or their items.
Now maybe there's another case to stop that behavior too. The result is that companies are not obligated to let sellers on their site. That is insane.
In summary, there will never be a scenario where Amazon allows sellers to sell the exact same item for more than Amazon's competitors, unless the government forces Amazon to let sellers sell whatever on their site.
Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin?
Sellers should stop using Amazon if they don't like their policies, and the issues will correct themselves.
Your 'feelings' about how this works only matters to you. The US branch of oversight for trade has declared (with a lawsuit) that this behavior is unconscionable and either is or will be illegal by the time this suit is finished.
You're welcome to dispute the FTC and the crowd here on HN, but you need to provide some sort of data to back up your claim of: Sellers should just stop using Amazon...the issues will correct themselves.
The FTC's suit alleges the exact opposite of what you allege. The FTC states that there is harm to the entire economy if Amazon is allowed to continue this practice.
Please cite the studies, data, or metrics you used to claim '...will correct themselves."
Thanks @endisneigh.
> the study corroborates the general sentiment
Seems fishy ... Good thing that even corporations like Amazon get a day in court.
(and I'll be generous and I'll pretend Walmart has zero fees)
Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000
Walmart: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $8,400
And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $29,400
See the issue? The problem is that one seller on Amazon moving to another platform won't change the fact that Amazon has the majority market share. That's how market momentum works and it's why we have antitrust laws.
Even with exorbitant fees, they are still where sellers need to be. And they are using this market share to force sellers into overpricing on other platforms so that they maintain this unfair position.
If Amazon's market share is 35%, then the non-amazon customers comprise the other 65% (which, being greater than 50%, constitutes "most").
Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000
Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 65%) = $78,000
If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share.
Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.
1. We're ignoring fixed costs associated with onboarding with an ecommerce platform. Selling on one website has significantly lower fixed costs than it is to sell on every ecommerce site on the internet minus one. We're talking thousands upon thousands of retailers, not a handful. If what you were thinking is that they could sell across the next 5 to 10 most popular ecommerce marketplaces, you're somewhere between 15% and 20% marketshare.
A more realistic number for that strategy is:
Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 17%) = $20,400
https://www.statista.com/statistics/274255/market-share-of-t...
2. Not all ecommerce sites represented in that 65% permit third party sellers. You can't just sign up and sell your stuff. You may have to convince their buyers to stock your product. This is not easy or cheap.
This is a problem in terms of organisation. If lots of people stop selling on Amazon this would be true. The problem is individually each seller is motivated to deal with Amazon so long as lots of other sellers are. A mass exodus from Amazon would in short order make the Amazon store far less relevant, but nobody wants to leave before everyone else is doing it because until then it costs them
It's probably an impossiblity if your business model is selling cheap imported Chinese garbage at a profit, but that's the businesess you chose. Others have chosen to sell quality items on their own terms. Those are the businesses I want to reward.
That's be much harder work, though, so regulation might well still have the intended effect.
Either their reason will need to be through their seller terms and conditions, or it'll have to be done on an individual seller basis.
Amazon relies on scale, and therefore standard terms and conditions for all sellers that can be scrutinized by regulators.
If it's done on an individual seller basis, I don't think they'll be able to do it while having the same effect in practice.
So here's a weird externality. As a decently well off tech-worker, I don't care if I'm paying 5$ or 2$ for lightbulbs, even if I'm re-lighting my whole house. The seller will sell on Amazon, because it is the largest market and will set their prices on other markets to match Amazon. I'll buy on Amazon, because it isn't worth my time to check multiple websites to get the best price (especially when SKUs differ and I have multiple other items I'm buying, etc). And now people who do need to save money, can't also find this lightbulb at a cheaper price on competing marketplaces, even if this lightbulb is actually the best quality.
It's the opposite of what you're saying. Sellers not selling particular items on Amazon is good for consumers who are price conscious, because if they need that particular item they will search for it and find it cheaper on another store, strengthening that one and hurting Amazon.
And if they don't care they will find cheaper items on Amazon. Everyone wins except for the seller, which is Amazon's MO.
Sellers don't just 'not sell this item on Amazon', because it is the largest single market. This is like, the whole issue in question.
> because if they need that particular item they will search for it and find it cheaper on another store, strengthening that one and hurting Amazon.
This is the exact thing that isn't happening, because Amazon is abusing its market position.
But, even if this was the case and the seller chose to sell on a different marketplace and take the Amazon ban, then it still wouldn't be as good as having just having the item listed on both marketplaces at two different prices. Because then I wouldn't be able to buy the best lightbulbs in one convenient location.
Online retailer Foo also has a store, and provide the same services that Amazon for their online shop at $5 per unit. The online retailer adds a profit of $2 per unit. Total price $17 per unit. Retailer Foo is more $ efficient for those services as a result customers price compare. Foo is rewarded for their effi with higher volume, manufacturer is rewarded with higher profit and consumer is rewarded with lower prices. Enforcing market competition led to all 3 parties involved being rewarded. Retailer Foo over time grows a larger customer base as people learn to price compare with them and forces Amazon to stop rent seeking.
But the above doesn't happen in the real world. Amazon enforces that the retailer lower their price on Amazon to $17, while still collecting $12 per unit. The company now can sell on foo, but only by selling on Amazon at a loss. They can't afford that amount of loss from Amazon and stay in business. So Amazon avoids competition. They can't pull their product from Amazon because not enough customers vist Foo retailer yet to make up the volume.
So in the end Foo retailer is more dollar efficient, but is prevented from growing and benefiting the marketplace. Amazon leverages its outside market size to avoid competition. Market participants preventing competition is against the benefits of capitalism and harms the consumer. So, it benefits the consumer to ensure Amazon has to actually compete with the more efficient competitor and stop rent selling behavior.
I think this speaks to the nut of the problem. Unless there is an incentive upstream of the misalignment of parties, then any number of lawsuits after the fact will have a "war on drugs" level of futility.
What to do then? In an alternative universe perhaps the FTC was implemented to improve trade by promoting standards, ontologies and authenticity verification that lead to greater freedom of trade and less gatekeeping.
Amazon demands that sellers increase their prices on selling platforms with lower overhead. A demand to increase prices does harm consumers.
Why sell on Amazon instead of your own site? Can’t competitors to FBA spring up that have great logistics? Are there any? Can anyone link me to them?
in a lot of countries it would save a lot of money if the tax office had direct access to the product and purchase database. Thousands of people could move to more useful jobs.
You are sold "the dream" by showing top sellers / influencers / etc. and told you can be like them. Kevin O'Leary became a meme for promoting this bullshit: https://www.youtube.com/watch?v=AuqemytQ5QA
In fact, even the top influencers can be deplatformed in an instant, and their speech is controlled. And same with Amazon. But the thing is that the people you never hear about, the "middle class", are far more controlled and the "long tail" produces all that free content that basically gets almost new views / buys but all that free sharecropper content is then used to train AI models or provide proof of large available inventory / product / content BY THE PLATFORM that pits them all against each other in a zero-sum game.
https://www.reddit.com/r/quotes/comments/117oh1m/the_upper_c...
The women is Amanda Lang,[1] and the two were a 'duo' for many years with a business/finance reporting show. I'm not sure how she managed to put up with him for so long. :)
[1] https://en.wikipedia.org/wiki/Amanda_Lang
You don't need to boil the ocean in order to serve a single community. For example, Facebook started in Harvard and its value to everyone in Harvard was based on how many people in Harvard used it, not how many people in the world used it.
Similarly, if a single product vendor and their customers form a community, then a free market of fulfillment companies can spring up to stock that specific product, and then partner with the delivery companies (who have their own networks) to deliver the package. You might say that the delivery infrastructure is a cartel, but they're open to everyone and Amazon has been relying on them until finally spinning out their own. Same goes for CPU chips that Apple relies on etc.
Look at IPFS for example, competing with AWS for storage. It is growing every year and now powers 1% of all storage worldwide! And there is a free market.
Whereas these platforms are all centrally controlled by some billionaire (Zuck, Musk, Bezos) and his crew. You don't need to have their scale because you don't need to serve ALL COMMUNITIES IN THE WORLD on day one. If you have an open source software like Wordpress or Magento, you can serve your customers with web hosting instead of Shopify or Amazon. Now the only question is, who would do fulfilment.
When there's a better alternative customers are less likely to try out your new, less good idea.
Can you give an example of someone serious using IPFS instead of S3? I don't really get what "all storage worldwide" means.
The only reason that FB, Google and yes Amazon were even able to launch, is because the open permissionless web disrupted AOL, MSN etc. Imagine them allowing Amazon to launch on top of them. They’d cannibalize them just like Amazon cannibalizes sellers.
Scale matters. You seem to be a programmer, you should know that.
Quantity has a quality all its own.
One thing that gets overlooked in this is returns.
One of the big draws of Amazon is easy returns.
Whenever you have decentralized fulfillment centers, returns become a huge pain, because the fulfillment center that is happy to take your money and ship you the product, doesn't want the liability of dealing with returns.
This gave them a pricing advantage which drove more customers to them which they intelligently plowed back into the business in building out their own network, no small feat of course.
A newer competitor would no longer have access to that simple sales tax advantage, and so would have to find something else to compel customers with. Barring that, Amazon/Walmart/Costco/Target/Home Depot/Lowes/Best Buy are tough to compete with because they already offer rock bottom pricing and they don’t have to invest in a ton of new infrastructure for logistics.
It was like a group of Java developers decided to write PHP code and it was horrific. I would estimate 80% of the classes in that codebase didn't have any implementing code in them.
Literally the only thing I liked about Magento was it's ability to outline everything that was being rendered to make it easier for you to identify the changes to templates you needed to make.
You can't open-source marketing and the insane delivery network Amazon has. Those, among other things, are the reason they are successful. They could release all of their software completely open source and literally nothing would change.
What you want here is an open source replacement for Amazon's product search that will find products from multiple independent sellers. The hard part is probably how to curate it; you want to allow legitimate small sellers without allowing the thing to be filled with scams. But Amazon hasn't done a very good job here either, so maybe it's not a high bar.
And then a payments system which is something in the nature of GNU Taler.
Amazon's logistics is an advantage, but is it an advantage that can overcome the need to pay them a vig instead of having the product shipped directly from the manufacturer? Lots of people willing to wait a week for shipping if the price is 10% lower.
Shopify as the front end
CargoWise for transportation, warehousing and everything logistics
Which leaves some of the more sophistiticated stuff like demand ballancing across the network, but that is doable by either developing something in-house or throwing an ERP system into tue mix.
All available off the shelf as we speak. There are other reason why nobody manages to seriously challenge Amazon.
I find most of your content here to not have any good follow-through.
Amazon isn't just some software on a few servers. It's a whole vertical enterprise. Suggesting that some front-end and back-end servers can take the place of warehouses, delivery people, fleets of machines (served by AWS no less), payment companies, 3rd party billing is just laughable, and shows the naivete of a sw engineer.
However, that last paragraph is terrible and absolutely true...
> Otherwise, at best, you are just reduced to begging Daddy Government to force these corporations to break up. How well did that work for Ma Bell? The pieces were still a cartel, still charged $3 a minute. What the government couldn't do in a decade, open source technology and open protocols did in a few short years ... VoIP dropped the price to practically nothing. Now we have videoconferencing all over the world. Because once we decoupled the software (AOL, MSN, etc.) from the infrastructure via open protocols, the infra providers became a dumb pipes competing in a free market.
I remember Ma Bell. Charged stupid prices for long distance, but was a good service. And then, the splitup happened. Did we get better services? Nope. We just got dozens of smaller monopolies all engaging in the EXACT SAME SCAMS that Ma Bell was broken up for.
It was when we started pushing data around and got away from POTS lines did we finally break the stranglehold of the baby bells. Even DSL has been basically thrown away, given how little the RBOCs dont want to advance and grow. Monopolies are like that.
Yep, I think we are in agreement. My point is that for many decades, the government was barely able to make the prices drop. And then open protocols like VoIP did it in a couple years.
I am a libertarian and believe that good open-source software and open protocols cause the centralized services to face a free market of incumbents. Much of the vertically integrated systems can be unbundled.
Another great example is how the Web (HTTP was the open protocol) disrupted AOL, MSN, CompuServe etc. Or how Wikipedia disrupted Britannica and Encarta. How Apache and NGiNX disrupted IIS. And so on.
Basically, we need standardized, open protocols. Maybe one day OpenStreetMap and Mastodon and BlueSky will disrupt their centralized alternatives. In any case, the first step is to have open source software and federation. I'm not saying it's the only thing that needs to happen, but FBA and many other services can be done "sharded" per-product. We can do the same for other marketplaces, like Uber, Fiverr, etc.
Youve got 7k karma so you should also be able to vouch. Just make sure "showdead" is on in your settings.
As to the subject matter:
> Yep, I think we are in agreement. My point is that for many decades, the government was barely able to make the prices drop. And then open protocols like VoIP did it in a couple years.
Mostly, but probably not on the actual mechanisms. I do agree that government's breakup of Ma Bell really made everything worse. And how it was broken up went from 1 monopoly to 20+ monopolies. The end user really just saw stuff stay bad or worse. Now, myself being an anti-capitalist, would have looked at this situation, and go "Well, communication networks are an integral part of national security, and should be nationalized, since this company was abusing the people", and would have federalized it under a nonprofit charter.
As to claiming that VoIP helped supplant - nah. People got their taste with dialup of the internet, and at a whole 4.3KB/s , and wanted faster. A 3 minute (3MB) song was 11 minutes to download... and Napster. Dialup was stagnating, and the telcos were being slow about DSL. I saw DSL eventually, cable networks, and WISPs pop up like weeds everywhere, because more and more killer apps were showing up. And frankly, at the time, Piracy was the killer app. Bittorrent, Kazaa, Gnutella, Napster.
> I am a libertarian and believe that good open-source software and open protocols cause the centralized services to face a free market of incumbents. Much of the vertically integrated systems can be unbundled.
That's the problem with the unbundling. That's not a software or code issue. That's a money issue, primarily with folks who have piles of money can force things others dont want.
And with vertical industries, it's never been a user-level experience in unbundling. To really force the issue, it goes back to the government to force it. And the US doesnt have a good track history in doing that well. This problem is always been a coordination issue, where larger monoliths can do well from a dictatorial governance (companies).
> Another great example is how the Web (HTTP was the open protocol) disrupted AOL, MSN, CompuServe etc. Or how Wikipedia disrupted Britannica and Encarta. How Apache and NGiNX disrupted IIS. And so on.
It's disingenuous to lump all those together.
The "Web" was a group of academics and governments, that finally agreed to let capitalist and commercial groups in on 1993. And those groups also included corporate private networks like the ones you listed.
Wikipedia was the first real test of anonymous and user-level editing across a website, under newly created Wiki software. Sure, the 2 encyclopedias were killed by Wikipedia, but Wikipedia only hastened their death. Bulk books like encyclopedias were already declining. However, we learned a great deal about the ills of letting users edit webpages like encyclopedias realtime. And we're still fighting with those problems. (for example, you'd never see the "lists of Jews", aside a few high profile people in a proper encyclopedia, but here it is.. https://en.wikipedia.org/wiki/Lists_of_Jews )
You mention "disrupt IIS"... and I'm here on my work laptop with 2 IIS consoles open. Free is going to win out cost-wise, for things like startups and hobbists. But there's lots of industries who've developed and maintain in IIS. And in my industry, I'm not permitted to use NGiNX.
> Basically, we need standardized, open protocols. Maybe one day OpenStreetMap and Mastodon and BlueSky will disrupt their centralized alternatives. In any case, the first step is to ha...
Cool example you chose there. 99% of VoIP is actually closed source, proprietary solutions.
WhatsApp, Facetime, Skype, Telegram, Google Whatever, Slack, Teams, ...
That actually adds to the problem: If you put effort and money into brand recognition you need to provide best prices on amazon, but Amazon is easier to game if your brand is xyxxy12345.
So the item price matches Amazon's, but you pay less in the end, if you're even remotely paying attention.
At least for the $200-300 items I've seen (like dehumidifiers, fancy computer accessories).
That's actually kinda disappointing. I'd always assumed those flyers were pieces of trash (at best, something I'd need to put in a recycling bin) which I don't want but now I'll be more tempted to take them when offered on the chance that I otherwise accidentally avoid the sales price.
It's still good to know that such coupons are likely just attempts by the retailer to circumvent the manufacturer's... ahem suggested price.
Since none of their lumber should ever be in the same building as the word "straight", I made a joke to a nearby employee that we should get a discount at how warped the wood was. He very seriously told me to separate the warped wood on my cart, and he'd mark them down. Got to the register, and they were marked down 40%.
Second instance was after spending time chatting with an employee in the appliances department, he pulled out a pre-printed, handcut piece of paper from his apron pocket, wrote 10% on it with his sharpie, and i got 10% off at the register.
Oh, and of course the Guitar Center stories of "you're a cool dude, and since I like you, let me knock of X%" are infamous
Apparently this violates the content monopoly KU is supposed to have.
Note, there is still a valid question on whether or not companies with enough exposure should be held to higher standards. Consider, we hold pro players to tighter requirements than we do local leagues. They both have basically the same rules, of course, but not fully identical. And enforcement is, of course, largely at the discretion of the agencies enforcing them.
The last is obnoxious, if you view the entire field as a homogeneous thing. And I do get the impression that there is something more going on in this case. That said, it is not abnormal to rank ROI on what gets enforced. I wish it was framed directly in those terms, though.
I think that in either Finland or Iceland people receive traffic fines that are a percentage of their income. They would never fly in the US.
There are almost certainly low key levels of bad practices in small shops. But it would cost more and take more out of the economy to enforce them than it is to just not care.
Now, that bar is rising, of course. Things that used to not matter years ago are easily enforced today.
I can’t imagine how this could be abused.
Similarly, mens rea is a thing. Such that statutory enforcement of rules is often a regressive policy that isn't necessarily a good idea.
My point was that many rules get enforced on a cost benefit based system. Especially in business where enforcement is necessarily an expensive undertaking. Ideally, part of enforcement will include evolution of the rules so that people don't grow into a situation where what they are doing is suddenly illegal. That said, many of the rules we are looking at here are more along the lines of "you left interstate driving and are now in a city." That is, the landscape and situation pretty much has to factor into the rules. Is why you would be an asshole for worrying about the kid's lemonade stand down the corner. Any grandstanding on how the rules apply universally is... well, just not useful.
That is to say, I also expect clarification and evolution of the rules during this enforcement action. Such that I would be most happy to have some of these arrangement flat out illegal. That said, https://www.ftc.gov/advice-guidance/competition-guidance/gui... was linked on Matt Levine's email today. And... "Our company monitors competitors' ads, and we sometimes offer to match special discounts or sales incentives for consumers. Is this a problem?" is answered with a no. Such that, this is a tough field to litigate right now.
And, what is it you are advocating for? That we only have rules that we can universally enforce? That would require that we know all of the ways that they can be broken from the beginning, so that we can encode those in law.
Maybe the US doesn't have a lot of laws that specifically target large organizations, but they have a ton that specifically exempt small ones.
For example, let's say I independently decide to import an item from company X and sell it only on a Shopify site for a lower price than company X's items listed on Amazon. Will Amazon exert pressure on company X to stop shipments to me or impose a minimum sale price policy simply because company X's products are available elsewhere cheaper than on Amazon?
They're not saying amazon committed a crime by doing this, they're saying that it's evidence of amazon abusing their market position to create a monopoly. "most favoured nation" status is legal, creating a monopoly isn't.
Amazon's practice is bad because it anchors pricing to their mandated cost structure. That the US government engages in similar practices should at least raise questions, because it has the same effect on the marketplace.
This "rules for thee but not for me" behavior is why trust in government institutions has been eroding. It is difficult to give good and necessary actions the aura of legitimacy required for democratic institutions to function when the hypocrisy is obvious.
(In a way it's amazing how shouting whataboutism is now more often used to deflect or excuse double standards and unfairness than whatboutism itself.)
It's true that the US government does make those demands, but it's very important to note that the US government organization is not a reseller of goods. It is almost exclusively a consumer. It is not in direct competition in the same marketplace with private industry outside of a few select industries (e.g., USPS, limited healthcare).
Next, MFN tariffs kind of by definition only affect international commerce. For Amazon, a 100% domestic manufacturer producing goods would need to comply.
Finally, MFN is something defined by WTO treaty. If you have to abide by MFN when importing goods into the US, it's almost certainly because your nation is also a WTO member. Because almost all of them are. The General Agreement on Tariffs and Trade requires WTO members to extend MFN treatment to like products of other WTO members. It's literally the the first article of the treaty agreement. [0]
[0]: https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm
You are the only person that introduced the notion that this had anything to do with the WTO, international treaties, etc.
That's one of the main cases of sticker shock in the healthcare industrial complex. Price a cancer treatment that would still be profitable at $10k/month at $125k/mo and offer sweetheart discounts to insurance companies (and treat self-pay patients as charity case writeoffs).
Is it possible the loophole here is to provide discount codes at checkout for “20% off” on website only, and now magically it’s cheaper than Amazon?
Shell companies are for more than just tax evasion!
DC AG Karl Racine filed a lawsuit over this in May 2021. The judge threw it out, supposedly for lack of evidence that it actually raised prices: https://www.jurist.org/news/2022/03/dc-trial-court-dismisses... I can't find details; it's unclear what the evidence or lack thereof was.
CA AG Rob Bonta filed another lawsuit over the same issue in Sept 2022. Some juicy quotes here (although only one side of the story): https://oag.ca.gov/news/press-releases/attorney-general-bont... The CA lawsuit is set to go to trial in 2026.
The FTC alleges that this simply reconstitutes the MFA since most sales on Amazon take place from the buy box. Amazon responds that it is within its rights to not promote uncompetitive offers that make its site look bad for not having the lowest available price.
https://www.amazon.com/Pilot-Retractable-Rollerball-Extra-Re...
Compare it to this listing for a very similar product:
https://www.amazon.com/Pilot-Retractable-Rollerball-Ultra-0-...
You'll see that in the FTC's example, you need to click to see more buying details and that at the time of this comment the lowest price is $14.28 with free shipping (on October 12th for my location).
In the other example, the "buy box" highlights the best offer of $9.99 with free shipping (on October 5th for my location).
As a consumer I definitely avoid products with no buy box. I thought it was only related to Amazon fulfillment (which in turn I use as a proxy for being likely to receive the product on time and undamaged)
Their logistics are utter garbage for me - part of it is an urban setting with nowhere to leave things, part of it is that they don't give a shit, and leave things.
In this example, the pens with the buy box are 50% cheaper and have much faster shipping.
I can understand why the FTC is concerned. This has the potential to be worse for competition than MFN agreements, because it forces any supplier whose products might end up on Amazon to police its entire distribution network for minimum pricing.* It also forces suppliers to crack down on (legal, authentic) grey market imports, even if those are never sold on Amazon, or risk losing the ability to effectively sell on Amazon.
* Moreover, that minimum pricing has to be sufficiently high to account for Amazon's cost structure, even if other competing vendors are more efficient.
The fact that one product has the buy box at $9.99 and 1-day shipping and the other product does not have the buy box at $14.28 and 8-day shipping lets us infer that $14.28 is not a competitive price for these pens and there may be a cheaper price elsewhere (likely closer to $9.99).
It doesn't let us infer that there is a cheaper cost somewhere, it lets us infer that Amazon has a low confidence that someone will buy it. That or they have such a low inventory of it that they are not confident showing it on the buy box without more engagement from the users.
To be clear, I'm ok with the idea that this is getting investigated. I have low confidence of finding smoking gun reasons to punish sellers on this. I am far more confident that Amazon is optimizing to convert sales.
Of course, without access to Amazon's systems I can't say for sure why any individual listing is or is not promoted. I'm just making an educated guess based on what the FTC put in its complaint.
Amazon is not a neutral entity or a public space. It's a private platform with its own interests that are very often in conflict with sellers.
There is this weird cultural expectation of platforms and platform-like applications (social media, multiplayer video games, online stores, proprietary libraries/engines, even entertainment media "universes" and franchises etc.). Participants and consumers seem to think that these platforms are somehow public spaces that they partially own, or at least they act that way.
But you only own what you actually own.
There are legal instruments and structures that actually let you partially own things and/or grant you rights so you can act on these kinds of expectations: coops, open source and other such licenses etc.
When internet culture and commerce wants to mature, then maybe we should start focusing more on building on _legally_ trustworthy foundations.
https://www.statista.com/statistics/274255/market-share-of-t...
Sounds to me like Amazon has found a loophole in the law. It agrees to list anything for sale, with no anti competitive conditions, but then only recommends customers buy things that it believes are in the customers best interests.
The FTC will struggle to argue that is illegal. Amazon can't be compelled to recommend stuff. (free speech etc). Also, what they recommend is in the consumers immediate best interests.
It will be hard for the court to argue that amazon should start recommending more expensive items to consumers, just to push consumers into looking for a cheaper platform.
Yes, 100% this. That's why I said that this lawsuit has a major remedy problem. Even if the court agrees this is anticompetitive, how do you fix it?
https://news.ycombinator.com/item?id=37767994
Now if Amazon wants the MFN clause, no problem -- but it's the wholesale price they can't sell to someone else below, not the retail price. If Amazon wants the lowest retail price, that's up to them.
The fact that the product exists $1 cheaper on another site does not make it not the best recommendation for the customer’s need. If I search “tablet” are you saying I should be recommended a cheap off brand tablet promoted to me because Amazon has the cheapest price or an iPad even though I can buy an iPad on apple.com for $10 cheaper?
I think you are misunderstanding the issue. Amazon is selectively determining to show the "buy box" on a specific product page based on whether the prices for that SKU on Amazon are competitive with prices for the same SKU on other websites.
In your example, Amazon might not have a buy box for a given iPad model if the same model was available on apple.com for less. The presence of cheaper non-iPad tablets would not impact the iPad buy box.
> Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away. The net effect, as Amazon itself wrote, is that "prices will go up."
No, not necessarily. This is just what companies always do. As long as it looks like they're "trying" to comply, they don't get in big trouble. In the meantime, they get to make microadjustments to their policy and find out exactly how far they have to comply until they're legally in the clear.
If the vendor for the $9 offers it for $8.50 elsewhere and Amazon starts focusing on a $9.50 offer is that "better for the consumer"?
If the $9 doesn't exist and there are two vendors at the $9.50 price and one has a higher review history but offers it lower elsewhere is Amazon making things better by focusing on the other one?
If another site starts selling the same product for $8.50 (regardless of who the seller is), Amazon may hide the buy box and put all the offers in the "other offers" section to avoid advertising an offer that isn't the best price available online.
Consumers price compare across sites, and Amazon wants to maintain its reputation for low prices (and in truly egregious cases prevent sellers on Amazon from price gouging).
If I don't see a price I assume it is out or they only have used ones. Certainly occasionally I have seen scalpers when I double checked anyway to see what the price would be if it returned but generally Amazon caught maybe half the scalpers in my experience.
Having a signal that means "you could get it less elsewhere" be the same signal as "I only have scalpers" isn't exactly good for consumers.
Also this implies that Prime shipping is worthless given they exclude it from the calculation...
Is buying from the buy box ever to the customers advantage?
How? Amazon routinely recommends products to me that are objectively inferior compared to other products. For example, I just searched for "peak design travel tripod" and the number one result, which is also marked with "Overall Pick", is a tripod made by a company with the name of KINGJUEEQUESTER that looks like it's made out of cardboard tubes, but at least comes with a free 21 piece lens filter set and selfie stick for $18.99. And it has 3000+ 5 star reviews that are almost nearly identical. "Edward Von McTavish: The KINGJUEEQUESTER tripod arrived. It is of the most impressive quality. The Leg Lock feature fulfills my needs. I recommend for you."
The thing I'm actually searching for isn't even on the first page of results. It's on page two, under "More Results" and has a title of "Peak Design Travel Tripod (Carbon Fiber)" and is priced at $599.95 (the same price you'll find on Peak Design's site).
How is it that showing me anything other than what I searched for supports me as a consumer?
You mean like this outright scam with an "Amazon's choice" label on? https://news.ycombinator.com/item?id=34588734
Amazon scours the web to make sure their products are competitively priced. So if a Western Digital external hard drive is $99 on NewEgg, then Amazon wants to sell it for $99 or lower. If it's a 1P product (i.e., Amazon is the seller), they can easily price match in real time. But if it is a 3P (third party seller) product then Amazon cannot take that action unilaterally take that action since it is the seller setting the price. So the best they can do to protect their customer in real time when their crawlers detect a lower price elsewhere is to hide the buy box behind the "see all buying options" button.
I'm sure when this feature was rolled out, Amazon's sales must have dropped. They are taking that short term hit in order to protect customer trust in the long term.
“By using this site, you agree you are not an agent of Amazon. You also agree that you will not use pricing information except as allowed herein.”
Those costs are Amazon specific... Way to shoot oneself in the foot.
Why should Amazon get to offload their own uncompetitiveness onto sellers?
It is extremely common for manufacturers to set a minimum advertised price (MAP) on the products they sell to retailers. This is done to keep the cost of, say, luxury goods above a certain value, or to ensure that even if demand falls off for a product, the product is sold from official channels at a price point that covers the raw-materials-plus-labor cost so the manufacturer isn't fundamentally selling at a loss. These agreements are generally enforced by both contract and tit-for-tat... Sometimes there are contractually-encoded penalties for going under-MAP, but sometimes the agreement is more "off the books..." If Amazon decides those Gucci purses are just taking up warehouse space and slashes their price to clear them, they can do that... If they don't want to have any Gucci purses to sell next year through official channels.
Why is this behavior legal for manufacturers but maybe not for Amazon? I can see no other reason than the law is path-dependent and arbitrary. "Fair trade" is a concept we invent as we go.
(Incidentally... As a consumer, it's useful to remember MAP exists when you hear whispers of "don't buy from unauthorized resellers." Sometimes the goods you get from those channels are shady, but sometimes they're exactly the same as the official-goods channels, shoveled into the back channel by an official retailer to clear warehouse space and reported to the manufacturer as 'damaged, lost' to preserve the MAP kayfabe).
Market share => market power => different regulations.
(Of course, I would personally prefer to ban this behavior across the board; I just wanted to also point out that treating Amazon differently could plausibly be reasonable)
Different regulations => market power => market share.
Although I guess not everyone actually reads the articles so reiterating in the comments is useful.
> Still, why can’t a third-party seller offer a lower price outside of Amazon? Good question! That’s where the scheme gets very clever. Originally, Amazon imposed contracts, as the FTC noted, “barring all sellers from offering their goods for lower prices anywhere else.” But Europeans, and Senator Richard Blumenthal, complained about these price parity agreements, so Amazon dropped its explicit contractual requirements in 2019.
> However, this change was a farce. The firm simply did through code what it couldn’t do through contract. "Amazon,” claims the FTC, “has implemented an algorithm for the express purpose of deterring other online stores from offering lower prices.
> Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away. The net effect, as Amazon itself wrote, is that "prices will go up."
Tangential, but out of context quotes used in your sentence makes me think you're lying no matter what you're saying. Or else you would have kept it in context and used the whole quote.
Not to defend Amazon in the slightest. Just tired of seeing Breitbert quality clickbait OOC quotes everywhere.
Is there a way to get around this by having the list price higher than Amazon but run specials for most weeks of the year that undercut Amazon? Could that only be a viable strategy if Target is the final merchant but not on the manufacturer's website?
Also add most major telcos, ISPs and airlines to the list as well.
We love capitalism. It’s basis is competition. Let’s get us some of that.
Strawman in any case, having a technical option doesn’t negate massive horrible effects on the public.
The “media” - ie ways to reach people is less consolidated now than any time in history.
In fact, you don’t have to do that. You’re getting your views across right now.
Maybe people these days are just lazy?
Not to mention the whole era of McCarthyism
Unless they’re reined-in, progress will be elusive; their megaphone must be silenced!
The #1 reason why Comcast hasn't been ousted by local community fiber networks is because Comcast politically lobbied to make it illegal. This is normal. The solution is to cut the moneyed interests out of politics as harshly as possible, because otherwise we'll always require the permission of junk-food companies before we limit how much sodium is permitted in kid's food.
Level the playing field by making the largest possible political contribution equal to a multiple of the minimum wage which one could reasonably expect someone earning that to donate in a given year, then require that each contribution be made using a check or money order mailed with a hand-written note in a first-class envelope.
The second should be Apple for the same reasons.
Then Amazon.
Nobody forces people to buy macs, very few do, and as for iPhones, there are alternatives and apple doesn’t have a monopoly over the phone industry.
You can very well use icloud on other OSes too.
The shit they get to pull with safari is beyond IE level - they straight up don't allow alternative browsers (beyond WebKit) on 50% of mobile market.
nobody forces people to use windows either, but yet a company having 60% of the global phone market is pretty comparable considering that's literally probably more phones than people actively using windows daily
They should definitely open up iOS to installing apps outside the app store, but their position isn’t nearly as abusive as Microsoft’s. Even their 50-60% share of the mobile market is pretty competitive compared to Windows.
I’m not sure how you would translate that to limits on the size of a company though as every sector would be different.
For consumers and the market as a whole it is more healthy if they are broken up into smaller companies.
I wrote a letter to our Presidency asking about these other things you mentioned last week.
Personally, I think much of this is in large parts the fault of one party that likes to systematically defund government institutions, so they can say "see big government doesn't work!"
This is a political stunt. If Lena Khan and the FTC were actually interested in consumer protection, they would go after other industries first.
The influence is nowhere near as negative as the impact from the other industries I mentioned.
They gained gained market share by providing better goods and services than the alternatives.
Still, there are viable alternatives to essentially every good or service provided by these companies.
On Android you can sideload apps, install alternate app stores.
Implying these companies are monopolies is an overstatement.
Totally! As we all know, the FTC is legally bound to only doing one thing at a time.
A more aggressive FTC is starting to target drug mergers and industry middlemen: https://www.fiercehealthcare.com/regulatory/more-aggressive-...
How the FTC Is Tackling ‘Below the Radar’ Healthcare Deals : https://medcitynews.com/2023/09/how-the-ftc-is-tackling-belo...
FTC warns of ‘rampant’ pharma consolidation as it targets $28bn Amgen deal: https://www.ft.com/content/bbe06477-22e6-4d46-a4c2-03964a2f8...
FTC writing new internet rules to safeguard users’ search, health and location data: https://www.washingtontimes.com/news/2022/nov/22/ftc-writing...
I'm not sure if the forced price exists in Germany for first-party sellers but it might explain why there seems to be a cottage industry of third-party sellers selling overpriced goods on Amazon. That is of course in addition to the universal problem of a dozen brands with names lifted from a word generator selling the same dropshipped white label product out of a factory in China at vastly different price points to create the illusion of choice.
What does that look like? What would Amazon look like if broken up?
In the end we all know lobbyists from Amazon will somehow influence their outcome.
The first is splitting Amazon-retail from their other products (Alexa, Ring, AWS, etc.)
The second is splitting Amazon-logistics out. I'm not exactly sure how this would work, but it could be argued that Amazon logistics could operate standalone.
Why would splitting it out into two monopolies improve anything? Even if there are some unknown, misunderstood synergies between the two businesses, will they not just collude in that way that bridge players do, without any overt actions that could be punished?
Currently, they get that for free by virtue of being the same company. If they were separate companies, it would require actual collusion and may, depending on the specifics, be illegal. It's also be less likely to occur since they'd need some motivation to do so. Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
I don't play bridge, never learned. A game consists of two teams of two players each. My vague understanding is that you might win if a partner gets ahold of a card that you discard, but that you can't know what card that is without saying so (cheating).
Good players can tell what cards their partners might need, and discard anyway. This isn't cheating, it's just good play.
In a court of law, the former is definitely some violation of antitrust law. But the latter is just good business. And even if it weren't, no overt acts have been committed that could lead to successful prosecutorial outcomes.
Philosophically, it may still be collusion. Good luck doing anything about it.
> It's also be less likely to occur since they'd need some motivation to do so.
Game theory supplies that just fine. If I have a monopoly in A, and you a monopoly in B, then I might just protect your monopoly in B without you requesting that, without you giving me instructions.
And from that point on, if you see a place where you can hurt or help me, you might choose to help without me requesting it or asking. Because if my monopoly on A is hurt... I can no longer afford to help you without you asking. Supporting me is a no-brainer. At least if the other party isn't a complete imbecile, they can see it. While there's no accounting for stupidity (second most powerful force after compound interest), we can already assume that the leadership of these companies is non-stupid just because of the success they've already achieved.
> Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
When they break these companies up, they don't fire 100% of management and rehire. Most of them know each other. Most are friendly with each other, if not friends. Sure, employee attrition will eventually break those bonds ten years down the road. But they already know how each other thinks.
Silent collusion, without so much as a wink or a nod, is definitely within the realm of possibility. The previously existing social connections are present. Their goals were largely aligned before, and nothing has occurred to de-align them. Mutual success may be easier than individual success. A sort of "corporate altruism" can emerge.
Evolution does this shit all the time with symbiotes. It's not like their colluding to co-evolve with each other. You won't find conspiracy evidence in the fossil record that they just started helping each other, it only proved to be a better strategy than individuality, and so they went with it.
To a vastly lesser extent than when it's one company with one board and one CEO in charge of multiple business units that would be unrelated after the breakup. If you break off Costco's chicken selling business from the rest of the store, the chicken business isn't going to keep their prices so low to boost the other company's sales because it costs them too much money to do so and they get far less benefit from boosting the other company's sales than when they were the same company.
It sure seems like that, but in the real world we do have many counter-examples where a singular company does do the loss leader thing for a long while, going into the red year after year. Often, it's never clear why or how they could think this was a winning business model.
The chicken-selling business might do the same, and their justifications for doing that might never be sound, they might not even be the reasons why they're doing it, but just some post hoc rationalization to themselves and the real reason is poorly understood by all involved.
If the rest of Costco sees this happening, are they going to step in and sabotage the chicken-sellers? Lord knows it drives some traffic to their stores (they might be unwilling to study that and write reports, as it could then be used against them if the FTC comes after them again, but they'd still notice). If they can subtly act to somehow ease the pressure, or make that worthwhile to the chicken-sellers without leaving a paper trail, they'd be fools not to do it right?
Of course, without exotic economic principles, that can't last forever. But unless you're claiming that there are business units for AWS are deep into loss-leading, your analogy only applies very generally and it's difficult to see how they could fall into similar snags.
And Amazon Studios is do successful it must be broken up.
Not to mention if AWS was broken up from Amazon smaller competitors could come in an offer cloud services distributed world wide at scale.
Have you really thought about how useless these suggestions are?
I disagree. AMZ babies would still be essentially monopolistic in their markets. Nor do I think shareholder value, after being inflated through monopolistic abuse, is sacrisanct.
Divide AMZ slicing through the business units. Make a half dozen vertically integrated baby AMZs. They all have access to AMZ IP, held by a separate company that can license it out to third parties (ie if they don't license their web tech to, say, Best Buy this AMZ baby has no revenue and goes to receivership since all other AMZ babies don't have to pay licensing fees).
EDIT: I almost forgot liability. Transfer all current known and unknown AMZ liabilities, including fraud and sale of fake goods, to the baby AMZs.
If you have everyone in the company go dig holes for 24 months, the stock price would tank and much value would be destroyed.
Likewise splitting is a massive effort that amounts to burning resources that wouldn’t otherwise be spent.
Now part of the point is to destroy the monopoly, which reduces company value too. This is a subtle point; we are probably ok with this because implicitly this is profit extracted as rent and which should really go to competitors. We’d probably say the value here is being redistributed.
But the monopoly rent is different from the actual OpEx and CapEx required to restructure. I really want to see even a rough quantitative analysis here before making any commitments.
The approach you put forth here seems maximally complex and inefficient as an end state, FWIW. Shared access is going to be a nightmare to operationalize. Much better to cut at existing business unit org boundaries.
Maybe it looks like multiple companies, i.e. AWS becomes separated with its own CEO, etc.
Currently these four services all exist under the same roof and it gives Amazon basically unlimited power to unilaterally destroy entire companies or brands with zero consequences and no effort.
It's a good step, but our economy is dominated by rentseeking behaviors from large corporations buying their way into monopoly and then warping the rest of the market. And unfortunately I feel like this case will end like many others, with a handshake and a promise to 'properly show consumers how much our stuff on Amazon costs'.
Hopefully this case will be another in her long list of failures.
The only monopolies that have truly existed in the USA are government granted ones.
And if not that, surely visa/mastercard's fee is it's own hidden tax?
These are clearly different scales of manipulation. On one hand, you have a brand controlling their own luxury devices, and on the other, you have a brand controlling literally everything else.
Prioritizing your own brand has been the norm at every grocery store I've ever been to.
But Google, Amazon, Microsoft, Facebook would all be higher on my "FTC TECH TODO" list than Apple so I'm not sure why you focused on Apple in this "whatabout"?
Interestingly one of the possible starting point for this investigation was a complain from Amazon to the FTC.
I am eagerly awaiting the acrobatic justifications Amazon lawyers will have to find out to justify that their MFN clause is perfectly legal without contradicting their own claims of the 2013 case...
Each of the web companies also have one of the most comically low barriers to change of any 'monopoly'. When att was broken up it was truly the only phone carrier for much of the US, switching was borderline impossible. You could replace Google search in the next 30 seconds.
How does breaking a company work? I mean... we broke up Microsoft and that only slowed them down for a few years.
https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
Goodness knows that if the intelligence community or state law enforcement has ever wanted access to anything in AWS, now of all times would be when they have the easiest time asking for it! Anything to curry favor with someone who can speak a word of support to federal agencies and state officials.