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Comment by youeseh | Hacker News Reader

Are anti-trust laws strong enough / enforced to prevent market operators from competing with vendors?

Why should Amazon be penalized when Costco, Target, Safeway etc.. get a pass?

Costco, Target and Safeway have to pay to maintain inventory in their stores, and thus have 'skin in the game'. Amazon can merely 'watch' what sells, and copy.

AFAIK, brick-mortar stores have to buy products; they don't get it for free. If they banked on sales of product A that they thought they could make a generic brand out of, and it didn't work, it cost them some money and real-estate. H

However, Amazon just has to watch people's 'browsing history' without paying a dime to the seller. If the product sells well, its good. If not, no loss of any kind for Amazon. Its a win-win for them (alone).

Amazon also has to purchase whitelabeled products and then sell them as their own brand, incurring the same kind of inventory risk.

I am guessing there is information disparity here. Amazon knows the demand-supply curve really well by the time they get into the market - in fact, not just for Brand A of usb-cable, but for Brands A-to-Z. None of those brands know how their competitors are doing and if there's a better kind out there than what they make. Amazon knows it.

Risk to Amazon is no longer 'is this product category good, or whether cloth or plastic sheath sells best on USB cables'. Smaller brands already survived and proved it for them.

If Amazon came out with absolutely new products (that are not Alex, Kindle etc, upselling, cross-selling themselves) to test the market out, I'd say risk would be same.

> Costco, Target and Safeway have to pay to maintain inventory in their stores, and thus have 'skin in the game'.

Can you clarify this? No major retailer pays up front for inventory. They do pay rent and other overhead though. Is this markedly different than Amazon?

Of course the retailers pay for all the stuff they buy, they only have rather large payment windows - I've seen anything from 90 to 180 days.

This is also what creates a problem for retailers once the public learns that they are struggling - vendors either shrink their gaps or demand upfront payments for new goods, leading to a further financial crunch. This is in Germany shown with the Galeria Karstadt/Kaufhof chain that has had its faie share of "crunches" over the last years.

Am I missing something here?

Their business model is based on high scale, lower cost vs traditional brick and mortar, amazon can iterate quicker.

Amazon does have some skin in the game, they still have to stock the items which are FBA (fulfilled by amazon), so they are taking risk there.

Well personally, I'd like to see those other folks penalized as well. There's plenty of money to be made running markets; there's plenty to be made competing in them. Having both isn't necessary.

But the important distinction here is market share. Amazon has circa half of e-commerce. So Amazon especially should have to pick a lane and stay in it.

How do you allow for generics? I personally love generic brands like AmazonBasics and Target's Up&Up because they save me a decent chunk of time and money.

If store brands weren't crushing the generics market, I expect we'd see a lot more of them. I mostly shop at a non-chain store, and just like a chain there are heavily-marketed brands and value-focused brands. Especially in the age of detailed online reviews, I think there's a lot of room for brands that focus on basic value.

So Amazon especially should have to pick a lane and stay in it

should have - why? who is going to go after them? If the risk of doing something shady is pretty small but the reward is huge, why wouldn't Amazon do it? Banks do shady stuff all the time, fully knowing the punishment if caught is usually laughably small fine - which they'd pay and keep doing shady stuff.

If the system is rigged (or not strong enough), players will take advantage of it, that is inevitable

Glass Stegall kept banks in a lane for decades. If we have the will to make laws and enforce it, it won't be too hard.

I think it was phrased as "should have to", as in someone should make them, not "should have" as in "in hindsight they should have made this decision on their own".

It's different when you are effectively a monopoly. EU fined Google for using it's search market size to promote sales of a certain product.

The fine isn't because of the promotion. It's because of the implication of what the Monopoly is doing.

Amazon is in the same boat here if the EU takes a look at this.

If Amazon is effectively a monopoly, so are Walmart, Costco, Target, and some others.

> If Amazon is effectively a monopoly, so are Walmart, Costco, Target, and some others.

I looked this up. Walmart is bigger than I thought!

> Grocery sales account for 56% of Walmart's total U.S. revenue, making it the country's largest grocer.

Yeah... I'm not sure Amazon is a monopoly here. Costco and Walmart both have great online shopping experiences.

The issue is lying to Congress about it when asked.

Amazon does need to be broken up anyways though - remember when the feds went after microsoft aggressively and they weren't nearly at the scale Amazon is in terms of being a business requirement.

We need to get another Teddy in sometime to really go whole-hog on corporate breakups and undo a lot of really questionable mergers that have been approved.

> remember when the feds went after microsoft aggressively and they weren't nearly at the scale Amazon is in terms of being a business requirement.

Wasn't windows effectively is a must for any PC? Like 90% of market. They literally killed Netscape by just preinstall a browser. Similarly pushed its own Office suite to be the lesser dominant player.

It sounds like they are more dominant than Amazon in the business IT or personal computing market.

Amazon is not nearly at the same level of ecommerce dominance, let alone retail dominance, that Microsoft was in dominance in computing in the time period you're talking about.

That doesn't mean they aren't big enough to cause substantial harm.

Maybe. I was responding to "remember when the feds went after microsoft aggressively and they weren't nearly at the scale Amazon is in terms of being a business requirement."

If they're referring to AWS rather than ecommerce, that's also nowhere near being true. I think it's easy to forget how absolutely dominant Windows was.

I think the clear issue is Amazon positioning their products over others in search and promotion rather than letting the products appear based on their own merit. Brick and Mortar white label brands are typically displayed side by side with name brands and usually name brands pay for promotional displays.

I don't really understand the kerfuffle over Amazon making white label basics. These brands know their product is easily copied. Obviously Costco, Target, or anyone else would look at the top X products in a category and develop the best white label product in either price and/or quality, why not Amazon?

People in the US seem to have a fundamental misunderstanding on what constitutes a monopoly. I have seen numerous people say that Apple is a monopoly despite having less than 20% market share.

Amazon isn't anywhere near a monopoly. There are many HUGE competitors in the retail and online retail space. Walmart, Costco, Shopify, Target, Best Buy, Newegg, Home Depot, Lowes, Macy's, Staples, Alibaba, CVS, and dozens more.

Few of those are in the same market as Amazon. It's not strictly about market share but dominance, however a market share of 50% defaults to a judgement of dominant. Amazon is projected to attain that 50% share in retail e-commerce in 2021. They're currently at about 47-49%. Amazon is exactly a monopoly and people know it.

https://www.statista.com/statistics/788109/amazon-retail-mar...

People seem to have a fundamental misunderstanding of what antitrust enforcement in the US entails. The DOJ isn’t limited to bringing actions only against monopolies. The Sherman Act also prohibits conduct that attempts to monopolize a market.

The argument isnt that they are a monopoly, its that they are either violating antitrust law, or antitrust law is currently unsuited to handle what amazon is doing. People just mistakenly use the word monopoly to mean antitrust or anticompetitive. It's also less about amazon just being an ecommerce box store, and more about having captured aspects of horizontal and vertical integration across many markets.

https://www.yalelawjournal.org/note/amazons-antitrust-parado...

>Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.

Amazon is Microsoft, Sony, Visa, Fedex/UPS, Disney, GAP, and Walmart rolled into one.

Amazon isn’t even as large as Microsoft. What an absurd statement.

The comparison was by product offering, not market cap.

The fact that they are ankle deep in many different industries doesn't help your antitrust argument. They aren't dominant in any single industry they are in.

Monopoly has been downright abused as a term via propaganda pushes to mean "big and I don't like it".

Never thought of it this way! Almost every produce I buy at target has a target brand (knock off?) version like MarketPantry or Good&Gather

The US government is wholly unprepared to deal with the wicked smart ingenuity of modern corporations. These inquisitions by congress feel like little children running around picking up sticks after a house has burned down. Give up, you've already lost.

There are representatives who understand modern corporations and are willing to reform the markets as needed — Katie Porter and Ro Khanna come to mind — but market regulation is a bad word in party leadership, whether or not they understand technology.

As far as understanding technology, there used to be an Office of Technology Assessment that would provide the background to Congress, until anti-reality Republicans killed it as the Web was taking off. https://washingtonmonthly.com/magazine/april-may-june-2019/h...

It can also be a mark of quality. Kirkland goes around, finds good products, and whitelabels them. You can trust Costco to stand by things they put their name over. Target is the same. Their own brands are a mark of exceeding a minimum quality threshold.

That sounds like the opposite of what antitrust laws are for anyway - promoting competition instead of preventing it.

The only exception I can think of is Walmart, where they've moved to a model in many categories where they only have one competitor to their store brand.

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