Amazon scooped up data from its own sellers to launch competing products

This is 100% true. To do any useful computation on your data (read, what you're using all AWS for) they have to have 100% visibility into your data.

> If they say they won't read your data, better trust them. If you don't, stay away from their datacenters.

That's it, right there. All of this is based on Trust in Amazon, not some technology that provides any assurances, much less proof, they're not looking at your data.

They can pull the curtain off anything you're running in their cloud, at any time they feel like it. It has to work this way for AWS to be of any use, and by using AWS you're implicitly trusting Amazon with your data.

Is it worth the extra effort and moving already functional servers to do so?

You may trust them not to abuse hypervisor access, but they still have network “meta” data - it could tell them how many transactions clear against credit processors (though not the actual amounts if encrypted), a good idea general distribution of page views With respect to time and user ip (though not the exact pages), times of day, demographics of users (Geo locations and ISPs, for example)

If you don’t trust them not to peek at what they can, don’t use them. He is perfectly right.

There are other cloud providers who aren’t competing with B&H and would be a better choice. But amazon is a direct competitor to B&H, even if they do have an IT barrier - they cross subsidize; any $ paid to Amazon helps it against B&H.

Please explain, as I'd like to know how.

Safe to say they are not on Azure.

He wrote this: https://www.nytimes.com/2019/12/15/technology/amazon-aws-clo...

Edit: fixed a typo

We allowed this vertical integration in retail when maybe we shouldn’t. Yeah it shaves some costs, but is probably having a huge effect on supplier diversity and margins. If we’re revisiting the consumer welfare above all doctrine, this seems fair to revisit as well.

If you see a product on a Safeway shelf, the company that makes that product already got paid--by Safeway. If Safeway puts a generic ibuprofen bottle next to a bottle of Advil, that's fine with Advil because Advil already got paid! Safeway is assuming the risk that those bottles of Advil might not sell because everyone buys the generic.

Amazon is different--they sell things themselves, but they also offer to run a logistics platform for other folks selling things. Folks who use this platform believe (are led to believe) that they are going to direct to consumers, NOT selling wholesale to Amazon. Amazon purports to be a neutral infrastructure provider, like UPS or Verizon.

Now, you can say that these folks are naive for believing Amazon about their neutrality, but it is what Amazon said! Many of these companies would never have used Amazon for logistics in the first place if Amazon had said "we are going to use all your data to copy your products and go direct-to-consumer ourselves with our copies, including placing them above yours in search results." Who would take that deal?

So, Apple would be allowed to vertically integrate and make the chips, hardware, operating system, and applications for their products. But they'd have to stop selling Belkin chargers alongside Apple chargers at apple.com, and the iOS app store would have to contain either only Apple apps and no third-party ones or vice versa.

"Nobody is forcing you" misses the point.

I support such laws too, but I wouldn't expect them to really change this. I think what we're seeing is more of a monopoly problem than anything else, even if violating privacy is a part of how they pull it off.

It's very hard to prove that a company that does, in theory, have access to data is not storing it or looking at it. Even accidentally. I just finished explaining all this to someone who freaked out about a Facebook post they saw about how Facebook was starting to collect information about everything you do off-Facebook. I had them show me what they meant, and it appears to just be every app that integrates with Facebook comments or allows Facebook sign-in as an option, etc.

The problem is one Facebook naturally got because of it's success: everyone has good reasons to want to work within their ecosystem. So they get tons of data on everyone. You can inconvenience yourself and refuse to ever visit a service that might share data with Facebook. But honestly: who's going to find that practical and do it? And if Facebook ignores the setting and "accidentally" captures all this data, and I suspect they're misusing it, how do I really get an investigation and more than a slap on the wrist for them?

It's messy to be a platform that provides a service and a consumer of that service that competes with your other consumers. At a previous job of mine we made a conscious decision not to do that for fear it would hurt our core business to ruin relationships with our customers. The problem here is Amazon just doesn't fear that. And I can't say they should. But the root problem seems to me to be more of a monopoly problem than a privacy problem.

It’s legal for Twitter or Amazon or Etsy or Twitch or Discord or YouTube.

I recently got suspended by Twitter after using it daily for 12 years and in addition to not being able to send new tweets or DMs (or do data backup/takeout), I also can no longer see even the usernames (or the message history) of the people I was communicating with in DM. For many of them, that was my only contact info for them.

I am becoming increasingly convinced for the need to regulate arbitrary suspensions for communications platforms (including sales/business platforms, that’s just a special case of communication). The current emergency situation really woke me up to the huge dangers involved.

GP lost his business, which is sad and tragic and unfair. I envision that in disasters or emergencies, eventually someone is going to lose their life.

Imagine if the mobile phone or cable company could arbitrarily suspend your connectivity because you left bad reviews online about their service.

I recently did a deep dive on how these sorts of centralized, censorship systems pose an inherent and existential threat to safety and human rights in an emergency/pandemic/war that is non-obvious in peacetime: https://sneak.berlin/20200421/normalcy-bias/

It’s truly terrifying to me that these systems (among them Amazon, Discord, Twitter, YouTube, Facebook, Instagram) have final say, practically, over who gets to speak to whom in a lot of cases in society, or what is allowed to be said. These companies (and the government in their jurisdiction) are entirely unaccountable for this terrible censorship power they wield, and it is only a matter of when, not if, it will be horribly abused. TFA is just one important facet of this danger.

Competitor on what vector? Speaking from a US-centric viewpoint here, but my thoughts;

* Distribution & Warehousing - Walmart & Costco

* Sales & Advertising - Google & Facebook

A few notable online storefronts that are independent and I use frequently are B&H Photovideo and Newegg. Realistically though the options I listed above are the only companies I see having the scale to compete with Amazon at anything, and even then they're an order of magnitude behind. Just my opinion, again very US-centric.

I'd say that you're basically at their mercy with regards to the charging a percentage of revenue though. I mean, that's how all card processors work.

By default I trust Shopify more than Amazon, and in both instances your business is essentially succeeding 'at their pleasure' so to speak. So I thought on it for a minute.

I think the main difference comes down to individuals in the business and culture. I'd elaborate more but I'm not sure I want to write that much speculative crap on the internet this morning, and I should get something productive done with my day.

EDIT: Also just realized, that if you look at my spending habits, they 100% imply I trust Amazon more than Shopify.

1) https://stratechery.com/2019/shopify-and-the-power-of-platfo...

It may be, it may not be. I don't know, I am not a Lawyer nor do I play one on the internet.

What I do know is that to date no individual, or collective, has had the financial or political will to test any of this in court.

I suspect this is largely a positive feedback loop whereby any entity that has the financial or political capital to do so and stand a reasonable chance of winning has done the calculus and come to the conclusion that setting said legal precedent would do their own businesses more harm than it would net them in value from Amazon.

Until that changes, meet the new boss same as the old boss.

Its kind of the same thing with Home Depot. I used to be able to buy quality hardware from a local store. Now all I have is Home Depot and they sell mostly imported junk hardware. I have to go somewhere like McMaster-Carr now for quality hardware. Home Depot has not been good for me, Home Depot has only been good for itself.

In the long term, Amazon undercuts suppliers who have to exit the market. That reduces competition and allows Amazon to charge more.

But if the reward for success is just having Amazon come in and hoover up the money you would have gotten by launching a knockoff, then suddenly there's a lot less incentive to invest in novel products. That's true both for categories where Amazon is competing and ones where it isn't currently.

I wouldn't be surprised if Amazon's replacement product is sometimes modestly worse, because a) they don't have the kind of deep expertise in a product that the original creators do, and b) it doesn't have to be as good to get the money.

And then there's after-sale support. Amazon's customer support is atrocious. The one thing they're good at is taking things back. But anything more complex and it's a nightmare.

How so? Amazon is the one reducing competition, stopping Amazon from doing that would increase competition. That's a good thing for consumers.

Please don't comment about the voting on comments. It never does any good, and it makes boring reading.

To your point, though, lower competition is not always bad. I as a consumer very much prefer having to deal with fewer toilet paper suppliers if they are of good enough quality. The toilet paper industry is not one where I expect dramatic innovation brought by competition. I just want the cheapest pack that won't feel like sand paper on my delicate behind.

There are, surprisingly, quite a lot of similar industries where consumer would prefer cheap and fast rather than elaborate and innovative products.

If you think there's something abusive going on, email hn@ycombinator.com so we can look into it.

https://news.ycombinator.com/newsguidelines.html

Regulation can help prevent harmful economic behaviour.

It can also create anti-competitive environments that protect incumbents at the expense of new entrants, often by regulatory capture.

Amazon may or may not legally be a retail monopoly - I do not know the answer. But your question can be rephrased for any monopoly and the answer would be “monopolies should be punished for leveraging their monopoly power in other markets, because that ruins the market for everyone else.”

Free markets and democracies are good at a lot of things, but self preservation is not one of them - therefore you need anti-freedom laws.

The issue is that over the long term, Amazon is lowering the ROI on innovating and taking risks in the consumer goods space. It's able to do this because of its dominance as a marketplace.

This issue us that Amazon also dictates what you are allowed to sell your product for elsewhere. It would be one thing if they just used your own data and created a competing product, but the fact you cannot sell your product cheaper elsewhere is the issue.

1. Amazon clones independent manufacturer's product.

2. Amazon strangles manufacturer because they can promote their own product more and have lower overhead because they control the entire chain.

3. Competitor dies.

4. Amazon has no competition on this product.

5. They raise prices and/or lower quality.

6. Consumers pay more for a shittier product.

If you're the supplier with a Shopify and Amazon Merchant account, or a local grocery store with white label products, none of this applies to you because you don't have the capability to effectively hold other businesses or markets hostage, no matter how aggressive you are.

>The new rules could wipe out nearly half the products on Amazon.in, said Satish Meena, an analyst at Forrester Research Inc. “It’s likely to disrupt availability for customers,” he said.

>The biggest beneficiary from the tightened rules could be Reliance, which is India’s largest private company and owns the country’s biggest brick and mortar retail chain.

In theory India standing up to giant foreign corporations. In practice, a huge giveaway to another giant corporation at the expense of Indian consumers and a big warning to other companies hoping to expand to or invest in India.

Interesting

https://en.wikipedia.org/wiki/Mossimo#IPO_(1996)_and_relatio...

>On March 28, 2000, Mossimo, Inc announced a major, multi-product licensing agreement with Target stores, for $27.8 million.

>In 2017, Target underwent a makeover, introducing new smaller lines and eliminating bigger billion-dollar lines, including Mossimo.

>Target distanced itself from Mossimo amid Mossimo Giannulli's alleged involvement in the 2019 college admissions bribery scandal, saying that Target had not been involved with Giannulli in over a decade

They could copy products and launch them abiding by the same guidelines, policies and everything else.

That's not the case, and that's where the unfairness comes to play: Amazon plays on their market place by a different set of rules.

It's not only Amazon. Google, Apple, and so on. The question starts to arise, if they want such massive platforms and play on such marketplaces, they must obey their own guidelines, else they are either stripped from the playground or someone else should own the play ground.

I can't understand this at all. Retailers create in-house brands all the time. Do they somehow make decisions of which products to create in a black box? How would they even do that?

If you go into the Walmart pharmacy, their store-brand equivalents are full of statements such as "Compare to the active ingredient in Advil".

Let's not forget that many of these large retailers have moved to the practice of taking up to 90 days to pay their suppliers. 90 DAYS! That's three months before you see the money of the product you sold through their channels. And they do this because they simply can.

I believe that there's not a single retailer that doesn't leverage its distribution advantage to squeeze their suppliers. If you're not Coca Cola, PepsiCo, Unilever, Procter and Gamble or Colgate Palmolive, you have little to no room for negotiation.

https://www.cnbc.com/2019/07/16/amazon-tells-house-it-doesnt...

"Nate Sutton, associate general counsel at Amazon, told lawmakers the company doesn’t tap data from individual third-party merchants to determine what new products to create."

Of course they don't use data from individuals, they use all of the data, in aggregate, from everyone including themselves.

Right now, very safe and low risk drivers can use these companies to get discounted insurance.

Eventually, every safe driver willing to install these trackers will do so for the lower insurance rates, leaving a much higher risk pool with the non-tracking insurance plans, and it will become very expensive to not be tracked by your car insurance company.

There tend to be specialist manufacturers who fill the store brand niches. E.g. in pharma, close to 90% of the pills, tabs, and liquids sold in front of the pharmacy counter are made by one company, Perrigo, whose entire model is predicated on being a store brand supplier.

I don't think Kimberly Clark makes the store brand paper products, nor does P&G make the store brand beauty/cleaning supplies.

I would love to hear of consumer facing (B2C) online businesses who are successfully operating without any Google or Amazon dependencies to see if it's even possible in the current online ecosystem.

My hypothesis is that it isn't, and as such Amazon and Google should be broken up. They have close to a functional monopoly on consumers, but I'm putting forward that they also have a functional monopoly on online businesses in commerce.

I disagree. If Amazon had great customer service, there wouldn't be a large volume of people complaining.

"In any case, I do wonder if Amazon's treatment of folk like you would improve considerably if Amazon had competitio"

I agree with you here. The only two marketplaces that actually get traffic are Ebay and Amazon. I've tried them all over the years and the rest combined don't even come close.

I can't speak for Costco, but that's not really true in a conventional supermarket though.

It's pretty well known that food manufacturers [can/are required to] pay to get better shelf placement (e.g. eye level vs. way high up or way down low): https://qz.com/807723/inside-the-secret-backroom-deals-big-b...

amazon doesn't have a monopoly in online retail, and i can go to any other website just as easily. far more easily than you can drive to a different store.

In speaking with Congress, they're stating to everyone that they are there to act as a platform for third parties. They're a "pass-thru" service.

That implies that while metadata may be being collected, you shouldn't be looking at it, as it isn't "yours". It would be like a cloud provider going into business undercutting their client's because they weren't savvy enough to encrypt their business records. Or the post office going through your B2B mailings, figuring out your footprint, them becoming a competitor.

You have one job. That's it. Once you start abusing your access to your seller's transaction data to figure out where to or whether to diversify into their vertical, there is a fundamental breach of trust, and a very reasonable case to be made in having exploited something you shouldn't be.

That's the Hobbesian Leviathan for you; you don't need all those little businesses anyway!

I always thought it was funny, as a young kid, that my city’s name was on all sorts of products, not making the connection.

Should amazon start paying small companies at the same margin that costco does?

(2) I'll concede HD and Lowes have a lot of departments without store brands [1], but raise you the local grocery store, which doesn't.

[1]: The pattern I see is that the stuff marketed mostly to contractors is less likely to be infected with crappy store brands than the stuff marked mostly to DIY'ers. I suspect its in part because pros will learn whats quality and whats crap a lot faster than DIYers, because the latter only buy a ceiling fan or whatever once a decade.

Those two sound like the exact same thing to me. There is no real difference.

It even happens between electronics manufacturers; you'll see a company noticing a competitor's product is successful, dissecting it to figure out the manufacturing costs and estimated margin, and tailoring its product line to provide a competitive product.

(Aside from all that, I though HNers didn't believe in IP?)

They don’t. Amazon isn’t being asked to produce a product for a vendor then taking that and selling it themselves, that would be wrong. This is Amazon doing exactly what other stores do, seeing what sells well and making their own version.

B. The main reason that products, in general, look alike is because they're all being produced at the same 3 factories in China. And for lots of products, there's no reason to deviate significantly from the house design that the factory offers.

I'd imagine if the administration goes through with the antitrust investigations, Bezos would just show up with a suitcase saying "Here's my offer to your 2020 reelection campaign" (not literally, he could put it through a Super PAC) and Trump would say "Art of the deal!" and that threat would disappear...

Or Bezos could double down and get a law firm very rich trying to prove that the suit would be unfair because it's driven by the president's little ego...

Yes, lots [1][2]. (I count fourteen cases year to date.)

[1] https://www.ftc.gov/enforcement/cases-proceedings/terms/217

[2] https://www.ftc.gov/news-events/press-releases/terms/217

There is a supermarket chain called Aldi who's entire business seems to rely upon copying branded products yet they are lauded for offering great value?

They're the only game in town at this point.

That happens to be ARM's business model at the moment. It isn't guaranteed to be their model tomorrow, nor are they doing it be friends with partners.

This is more like one business owner (FBA seller) trying to sic the authorities on their competition (Amazon Basics) in order to keep a competitive advantage. This seems more anti competitive than what Amazon is doing