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Comment by nataz | Hacker News Reader

The most interesting part of the HN discussion is not about the definition of what Amazon is doing, but the occasional misunderstanding of how large brick and mortar retail businesses operate at scale (see: buying shelf space/payment dependant on sales/etc).

There are lots of folks on here that understand what Amazon is doing, less who understand retail businesses mechanisms.

I'm not sure what Amazon is doing is legal (def will vary widely between the eu and us markets), but it is another interesting example of how doing something at scale can be perceived as fundamentally different then when it's done in a smaller way (especially as it pertains to privacy).

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These comparisons to brick&mortar stores are mostly irrelevant.

Amazon told 3rd party sellers it wouldn't use their sales data for its own sales (and possibly contractually agreed not to? - unsure here), and it now seems that they broke this promise.

How other stores operate doesn't matter. Amazon said it wouldn't do this and used that trust to attract sellers and grow their platform.

Companies break contracts all the time. The consequences range and can include legal action, hurt relationships, lost business ... but also could be minor ('business is business').

> Companies break contracts all the time.

Which is an excellent reason for preventing these types of monopolies from forming in the first place. Once you let one retailer get so large, they have almost unlimited power to act in this way, but the people who they harm have very little power in receiving any recompense for it.

> The consequences range

They sure do.. and Amazon is one of the largest companies operating today. The range is "off-scale high."

There is breaking contracts in minor often mutually agreed ways, or because 'can't do it'. Happens all the time.

Stealing your customers sales metrics, yeah that's never okay.

It's less doing it at "scale" and more doing it as a monopoly/monopsony.

Walmart has faced similar questions as well, but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.

> as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is.

Walmart retail sales are significantly larger than Amazon's retail sales.

For 2019 (chosen to avoid the disparate impact of pandemic), Walmart sold $514B while Amazon retail sold only $135B first-party and $200B third-party. Given the growth rates, Amazon will pass Walmart, but I don't think Walmart has "far less" power in retail than Amazon.

I think mail order and brick&mortar compete in some product segments, but are separate in others. For example, perhaps split off much of grocery and bulky cheap items as well as legally constrained products from WalMart's total (although Amazon is making inroads there).

Walmart has a huge online/mail component too. They basically bought and (unlike so many) successfully integrated and digested Jet (and now Bonobos) explicitly for that.

This, and Walmart isn't just going to sit by and let Amazon win, why would they? I think folks on the Internet generally tend to assume Amazon is inevitable, but I doubt that's how Walmart thinks of it.

Walmart and Amazon are both good for one another, and their competition helps us, except for when they basically non-compete over things like wages.

I agree about the internet/tech user part of that. If you asked me to give estimates of their relative size 5 years ago, I'd have probably said that Amazon was much bigger than Walmart, which would have been entirely wrong, of course.

The pandemic was a huge boon for Amazon, but I don't think the battle for retail will have a clean, singular winner and consumers are endlessly demanding in terms of what it will take to remain the winner. Toys-R-Us and Sears learned that painful lesson within our adult lifetime. They won't be the last.

From a little bit of retail corporate experience: people are used to seeing Amazon roll over competitors with under-invested supply chains.

There aren't really any of those left.

Amazon taking on Walmart, Home Depot, or (I assume) Target is going to look very different. Because all have been shoveling money into their supply chain efficiencies for the last 10 years.

In what market is Amazon a monopoly?

They are popular, efficient, and usually affordable - if not cheaper than many competing outlets, but I do not see them as a monopoly by definition.

Amazon has made it more convenient to use their services than their competition in many ways, but to my understanding, there are alternatives for just about everything they offer.

Being strict about the term, none. But "monopoly" has become a colloquialism for "big company (that I don't like)".

Amazon has certainly generated enough bad faith and operates at a large enough scale to galvanize the anti-trust advocates

>but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is

I don't believe this to be the case. How is Amazon a monopoly, given the large number of online retailers that continue to be successful?

> Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.

I think it's pretty disingenuous to say that the U.S. isn't enforcing its antitrust laws, the DOJ certainly opens investigations against these conglomerates, they just don't take them to court, so there might not be enough info for the DOJ to think there's a case. We don't know the full story for any of these cases and thus can't become sole arbitrators of whether or not something is an antitrust violation.

The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution - they have an average 92% success rate in the cases they bring against defendants[0]. I'm not one to say how to run the DOJ but chances are they could find more damning documents via court discovery (if they think they have enough of a case to get to discovery, at least).

0: https://www.justice.gov/doj/page/file/1249306/download#page=... (page 16)

> The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution

It has nothing to do with a lack of evidence and everything to do with not biting the hands that feed the boss's next campaign fund.

The DOJ, SEC, etc have an army of non-politically-appointed civil servants.

And yet not a single non-politically-appointed civil servant at the DOJ has the actual authority to bring an action against a big company like Amazon. When the DOJ brings a major antitrust case against a major American company there is no chance it didn't get the Attorney General's, and probably the President's, sign-off first. None. Zero.

Potayto, potahtoh.

Failed enforcement attempts are as ineffective as non-attempted enforcement.

What's a law with no teeth?

It has teeth but high standards. It is a bit more like Treason charges in the US. Technically a capital crime but often not worth trying as the precedents make it a high fence to clear. You are better off finding some anticompetitive business practice to cease.

But anything about monopoly from the professional liars is just a bunch of table pounding as they lack laws and facts.

I don't think that's a fair comparison. It would be like if Amazon owned the entire mall, and would kick out competitors and establish their own stores once they become profitable.

Amazon is both a retailer in the sense that they sell products, but also owns the entire marketplace as well.

This.

They are also so good at building malls that they own the construction company and the supply chain of raw goods for the construction efforts (AWS). They use their scale to cut costs for construction globally so it doesn't make economic sense for others to build without them. Even some of their competitors use their construction company to build their vision of what a mall looks like. All the while Amazon is gaining valuable insights they can steal to use on their own malls.

How is that functionally different from identifying a product that is selling well, making your own version of it, and selling that at the identified best or lower price from the data generated by the third party? Sure they may still list the third party (in direct competition in the same marketplace) but that doesn't mean they aren't acting extremely anticompetitive for a marketplace.

This isn't one off or new either but a pattern of abuse by Amazon: https://fortune.com/2016/04/20/amazon-copies-merchants/

Or from today: https://arstechnica.com/tech-policy/2021/05/4700-amazon-empl...

It would be like if Amazon owned the entire mall, and would kick out competitors and establish their own stores once they become profitable.

Just wait. It may happen.

During the pandemic some of the big mall companies bought their tenants, either out of bankruptcy, or at crazy cheap prices.

At first it looked like the malls were just doing it to keep the lights on and the storefronts occupied. Now there's more and more people saying the mall companies may try to become "Amazon In Real Life."

To me, it sounds like Department Stores 2.0. But it'll be interesting to see if it actually happens.

They don’t kick out competitors though, merely open up their own stores. To me (the consumer), that seems fine.

To abuse this analogy further - if they also put signs for their owns stores in front of the other stores signage, or redesign the mall to direct people away from the competitors - that seems less fine.

What if there's multiple other malls just across the street? As is the case in online retail. Even easier than crossing the street, to be honest, just click that second result in Google instead of the first. Is it so hard to admit that Amazon's customers are using them because their offering is great and not because of lack of alternatives?

Amazon has always used dark patterns with their 3rd party sellers. They even restrict the price sellers can charge on products they sell on Amazon and their own website. This ensures Amazon will be the lowest price.

In this analogy, that would mean you have a store inside the mall and right across the street. Amazon sees you are selling products cheaper across the street since rent across the street is way cheaper than inside the mall. Amazon then says either you charge the same price in the mall or you get kicked out. You could call Amazon's bluff but most sellers are not risking their seller accounts.

That's irrelevant to charges of anti-competitive behavior

You seem to have a limited understanding as well.

Unlike other retailers, who are front and center that they own the sales data (some even sell it back to you, the 3p merchant), Amazon explicitly states they will not use that data (except in aggregate). Bezos' statement that he cannot say for sure if the policy has been violated is an admission that it has, and is even encouraged. It's very possible and easy in fact to enforce a chinese wall around that data. That they have chosen not to -- that the data is possibly available at all -- means that they expect successful PMs to use it on the down low.

It's clear they have this policy so as to attract merchants. So to turn around and violate it is a pretty severe issue.

Second, Amazon is in a position to actually produce or re-brand products under their own very strong brand. Unlike other retailers whose store brand is always the discount and less desirable option, and generally not taking away sales from the premium product.

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