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Comment by legitster | Hacker News Reader

Is this unique to Amazon though? If you are Safeway, you wouldn't be happy if Nabisco started selling crackers half-price from their warehouse down the street.

In most industries, MSRP agreement rules are pretty tightly enforced. California winning this case seems like it could make for a weird precedent.

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The proper analogy would be Safeway forbidding Nabisco from letting their products be sold cheaper at any other supermarket. Which is ridiculous.

Yet that happens all the time. I've heard stories of companies going bankrupt after retail giant X learned competitor Y was selling their product for less, in breach of their contract (feel free to replace "contract" with Amazon ToS).

I worked for Frito-Lay for several years and you better believe that's how supermarkets work. More than once I've been called in the middle of the night to a store to rip down an endcap of chips because the store got undercut by another (and in their defense, why would they give us valuable floor space on a promotion that won't sell).

I think though as comparison that the power dynamic is flipped. Exclusivity agreements usually were to the benefit of the store (against big brands at least). But against the small brands on Amazon, they favor Amazon.

No business is happy with competition. That doesn't make contractual collusion any less anti-competitive. If it is, as you allege, the norm, that only makes dealing with it more urgent.

The FTC considers certain exclusivity contracts as pro-competitive:

https://www.ftc.gov/advice-guidance/competition-guidance/gui...

But exclusivity contracts is not what's in question here, which preclude you from selling elsewhere (as opposed to selling elsewhere but at a lower price). Also exclusivity contracts usually come with minimum volume commitments (since you're locked in). That's quite different than third-party sellers on Amazon.

And it usually has to do with brand perception. Nordstrom doesn't want you selling that same product at Target because it devalues the brand.

To add, both parties usually get additional value out of an exclusivity deal, which is why they voluntarily enter into an arrangement.

In the case of Amazon though (and I caveat this with the fact that I’m not aware of the full details) this is about being able to sell on Amazon at all, there are no extra perks involved for the sellers.

Absolutely -- usually the value for the seller is a guaranteed (depending on exact terms) minimum volume of sales through a successful channel.

Based on the details of the suit and the anecdotes here though, it doesn't sound like Amazon actually drops the product. They withhold it from One Click or reduce its listing.

The analogy in a retail setting might be losing your signage or being yanked from a good location.

> being yanked from a good location

"Reducing the listing" can potentially mean being pushed to page 23 of search results. In retail, that would be equivalent to never leaving the warehouse, available only upon specific request by a customer.

Right. The law isn't saying that they have to be happy about it.

The role of Amazon corresponds neither to Safeway nor Nabisco in your example.

Its NOT! Even Walmart, Costco & other retailers enforce this on sellers. Sounds like California going after Amazon & Bigtech.

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