The FTC sues to break up Amazon over an economy-wide “hidden tax”
thebignewsletter.com
thebignewsletter.com
Recently, eBay has made it so that only the products with paid ads are shown in places where customers click. This drives up the cost of everything by more than 10% which is eBay's ad fee. I refused to buy a paid ad to sell my MacBook. It sat on the site for a month, which is highly unusual for an in-demand and rightly priced product. Finally I lowered the price enough to get it sold.
Most consumers use the default site, which filters by Recommended (i.e. ads) The play for consumers to win at this new payola ad scheme is to always filter by lowest price (or in amazon's case Prime + lowest price)
But really, consumers don't win (and neither do sellers) because now these ads take up space in supposed "search results" for items which don't match the search terms (but are close enough) This creates frustration when you are looking for something to meet a specification, like E26 light bulbs for example. Here, it is pointless to show anything that doesn't meet that specification and yet the site shows them, and the seller has to pay the ad fee.
Please somebody make a site with no payola!
>There was a joke a few years ago that rent is the new [Customer Acquisition Cost], and that now applies to everything. The [Total Addressable Market] for search ads is not ‘advertising’ (let alone online advertising) but everything that is spent to reach and serve a customer, starting with retail rents. This applies to Amazon, but even more to Google - you can ask whether Google’s ads are ‘advertising’ or ‘marketing’, but also ask whether the TAM for buying placement in Google search results is ‘advertising’, ‘marketing’ or just its customers’ operating margins. How do you reach a consumer? Do you spend your budget on TV ads or search ads, or on retail rents, or on giving retailers a margin versus selling direct, or giving the retailer a better price for better placement, or free shipping, or a better returns policy? Everything below P&G’s COGS line is up for grabs.
https://www.ben-evans.com/benedictevans/2023/3/6/ways-to-thi...
There will be no site that does not offer advertising, because advertising allows the site to determine which sellers can afford to pay more while still being profitable. It's a scaled version of the same way a landlord will raise rents on a profitable storefront.
It's still possible that people exist who charge "what it's worth" rather than "what they can get". Those people can still make a fine living off of a two sided market place through flat transaction fees. Craigslist is an example that comes immediately to mind. Smart market participants are already punishing providers that maximize profit with payola, which is leading to success of new smaller niche markets - reverb.com comes to mind, or bricklink.com or alibris.com. That is not to say the market of markets is "solving" this problem - we probably want more consumer protection law - but it does show that your startement about ads is, strictly speaking, false.
You cannot charge "what it's worth" on amazon because you either pay the ad tax or you compete for the lowest price.
CL has gotten worse since FB Marketplace has gotten foothold people visit it much less. FB Marketplace on the other hand is a race to the bottom due to ease of sales by laypeople.
During the pandemic, I decided to sell a bunch of a component I had stockpiled. (Im not a scalper. I got the parts when my dad died.).
I put them for sale with $100 minimum, auction. They ended up selling for $300. I was definitely happy.... until Ebay refused to send me my money, and instead demanded access to a bank account, after the sale was complete. Fuck that.
I found the user who bought it, traced to a business. Cool. I contacted him, explaining what happened. Turns out they did the same to him since he too was a seller. I told him that I'd honor the same price Ebay told me....
Ebay told me (seller) $300. Ebay told the buyer $350......!! Mind you, the fees are taken out of my $300, yet that $50 difference is Ebays scrape off the top.
Obviously, I sold it to them for $300, and provided screenshots of what I was being told, and they did the same. We arranged the sale over Paypal and worked like a charm.
And sure, Ebay's scamming as far as I can tell, everyone. But it's also reminded me to check on websites with a private mode browser and logged in, to see if there's funny games.
They also allegedly hired someone to stalk and harass a couple who posted negative reviews of them online.
You live in a big mansion. Your live-in cook heads into town one night and ends up getting into a fight in a bar. He breaks the other guy's leg.
What should happen to you?
One of them heads into town, hires a bouncer to break a guys leg using the legal entities money, letterhead, and declares that this is work on behalf of the legal entity.
What should happen to the legal entity wrt acts commisioned in its name?
What happens if someone with no affiliation of any kind with the company hires a bouncer to break a guy's leg using company letterhead and a sworn declaration that the work is commissioned on behalf of the company?
A lone wolf acting alone and falsifying documents is entirely different to a direct representative who is authorised to act on behalf of a company acting in bad faith.
Otherwise company officials are free to do henious crimes in the name of and on behalf of a company with no blowback on the company when those actions go pear shaped and get exposed.
Commanders are responsible for the actions of their men, companies are responsible for the actions of their principals.
At this point I'm merely questioning your ability to parse and undertand English in good faith.
In that metaphor, I see it like this: you live in a big estate that operates as some sort of business (wine, tourism, B&B, w/e), and your live-in cook breaks a guy’s leg while working for the estate (say, in a case of kitchen negligence, or just plain-old kitchen assault). I come along and propose that maybe you and your other owners should be forced to sell the estate or seriously rework things, since the assault was so bad.
In this world, do you share my intuition that at some level the estate itself should be made to answer for the actions of its employees on the job?
Beyond just fining corporations for damages, I feel there’s an unaccounted for intuitive sense that corporations should forfeit their autonomy and very existence in light of serious or repeated malfeasance, even if it wasn’t voted on by every member of the board before being enacted.
Ok maybe I did have time for a metaphor dance lol. Hope all this was somewhat clear!
What is a company if not a collection of people? I fail to see the difference between "rogue execs did it" and "the company did it", except for who gets thrown under the bus.
rogue employees is not company policy. rogue exec? maybe that isn't company policy. rogue execs!? that IS company policy.
That's not 'rogue' that's completely and utterly unhinged. It's a walk-in position, not a 10th generation family firm. Why would you even think about it?
Note that it DIDN'T list a "higher price for the buyer"; people were bidding so that price was correct. What it did was list a LOWER price to the seller.
This is like you giving me your guitar and telling me "Martin, sell it for me and keep 10% of the price for your trouble" and then I lie to you about the price I sold it for so I can keep the difference.
I don't know how else to describe this than fraud. This seems wildly illegal in most jurisdictions and I'm surprised they're getting away with it.
Ebay told me $300 for the completion of the auction. There was the normal fees associated with listing, which again, are understood.
This $50 discrepancy was not accountable anywhere. It just went poof into Ebay's gaping maw.
Like I said, we both compared notes and what our respective screens said. The numbers absolutely did not add up. And Ebay reallllly doesnt want the buyer and seller to talk directly. It's why the "ebay mail" is so limited and crippled, to prevent actual conversations like this from taking place.
I talked with them over text and email proper. There was no filter, or daddy ebay censoring all my messages.
Aliexpress?
Two different colors of the same specification iPhone are fine to group together (arguably even different storage configurations), but it should be illegal to have a product listing show up on a search page with a price of $5 when the title and photos show the $100 actual product, and $5 is what you pay for the charger brick. This is extremely common on AliExpress, and obviously the FTC's reach is limited there, but it also happens not infrequently on Amazon and eBay.
How much did you have to lower the price by? How did that compare to the ad-ransom you would have had to pay?
We gotta get the eyeballs back on craigslist
I have never once been a victim of a scam because I'm smart enough to identify them and be extremely careful when exchanging money on line.
It's not difficult.
I lost trust in selling on eBay due to buyers that have tried to scam me in the past. Not sure if it's still that way on the sell side for individuals but I felt like, for a while, eBay was favoring high volume users vs being fair. I sold some SFPs that were way under market value about 6 years ago and had serial numbers of each unit in the auctiom. A guy bought them to resell in his shop a couple states away and he claimed they were defective when he received them. I told him to prove it in a switch showing the serial numbers and the error condition he claimed. He wouldn't do it so I told him to ship them back. He shipped me units with way different serial numbers but eBay still gave him his money back and charged me. That's the last time I sold on eBay.
I looked the other day and it’s like $19/month for Spotify Family now… when did that happen? It was like $14 when I signed up. But all my playlists are set up on Spotify… what’s more, all the fam’s are too. Huge PITA to move to Apple Music.
Spotify has to negotiate with record labels who mostly act as a unified block, and they have leverage because Spotify needs all major labels or else customers can’t find all their music. No one is a “interscope” loyalist - they’re loyal to artists. This gives them power to basically demand >100% of the profit margin. That’s why they’re trying to get into other markets like podcasts. Record labels get ~50% of revenue, then Apple/Google app stores get 30% from some customers - that doesn’t leave a lot of room for Spotify.
That’s also why YouTube music and Apple Music will be the only long term players - but they need Spotify. They can take a loss to keep customers in the ecosystem BUT they need Spotify to always be the first to break to keep rates tolerable.
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.
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:
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...
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. :)
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.
MySpace
Friendster
Whimit - Russians online (LOL)
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.
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?
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!"
The Amazon policy basically says that the vendor must offer free shipping. Coincidentally, nobody can offer shipping for less than what Amazon offers therefore Amazon(FBA) is by default the lowest price. The only other company that can fight this with a logistics network of its own is...WalMart.
Then you have Chinese vendors who sell through networks of dropshippers and resellers at Amazon and other venues. It's why you see many vendors of seemingly the same item.
One thing to note is that it's mostly small and medium vendors of relatively low margin items that are the most hurt by Amazon's policies. Seller's of high margin items just eat into their margins while large vendors push back at Amazon and sometimes win e.g. Toilet Paper that comes directly out of a Georgia Pacific warehouse instead an Amazon warehouse despite being labeled as Prime and sold by Amazon.com, not a third party.
Walmart and Costco subsidize free shipping by raising prices on the third party businesses who sell through them?
Because that's what the article is about.
That is why minimum orders were so popular, if it cost say $8 to ship something and a retail margin is 15% I can do the math on a break even point where it is a wash or better for the vendor.
Are you sure this is done overtly by Walmart? As the article says Amazon had this policy but it was dropped because of EU and US gov pressure. I'd be surprised if Walmart got an exception.
Unless there's some distinction for retail stores not just online.
And the FTC is very much capable of running multiple enforcement actions at once. Why are there no such charges against other companies doing the same thing. They don't have to be one at a time.
Sorry if it makes things hard for some AWS customers, but eggs, baskets, etc.
The top two posts with the most upvotes are "Ebay is just as bad" for the startoff line, and "Everybody's just as bad as Amazon. Why are you being so mean and cruel to Amazon?"
Obvious astroturfing, just like the entire Amazon review ecosystem. Surprise? No.
https://mkorostoff.github.io/1-pixel-wealth/ Bezos' wealth relative to "normal" shown as 1-pixel comparisons. Be careful once you get to the $Trillion portion (you'll be scrolling for the rest of your life.)
Are you saying that Amazon is buying upvotes for comments they like, or that that comment was written by a shill? The former is very possible but hard to prove either way, but the latter seems really unreasonable. In this example, it's a poster that's been here since 2017, talking about things like startup culture, Covid-19, and investment banking. They even say they're ex-AWS in their HN bio, which would be a very unconventional move for an Amazon-corporate-operated fake account.
Doesn't showing the total price make it much easier to compare? Aren't politicians pushing on other service industries (airlines, ticket sales) to do just that with all their stupid hidden fees?
If Amazon can't sell an "Amazon Brand" that competes with other sellers on it's site, the Trader Joe's should not be able to sell wine that competes with the other branded wine in it's own stores. Nor should Target be able to see it's Good Stuff brand (or whatever it is) that directly competes with other things it stocks.
Similarly, if Amazon is going to be barred from having people pay to be the top of search results than Safeway should be barred from having companies pay to have their items placed on the end shelves.
This shouldn't be about just Amazon.
No, the actual way is to go company by company and dismantle them. And by Starting with the biggest it sends a message to others that perhaps they should change before they too get broken up.
So by killing a few prominent hostages the system ends up changing “on its own.”
You will never finish if you go company by company, there’s just too many. Additionally no company ever stops anything until forced to. Your suggestions will not solve anything.
So what's the solution?
2. Increase taxes on non-labor capital growth to directly fund full employment programs Eg make "profit" impossible
Banning MBAs will have more of an effect.
Are you really suggesting that Amazon is paying people to post comments on HN of all places? That sounds utterly deranged.
Targeting amazon for something Walmart or Target does, but without targeting them too is just wack. You can't just handwave that issue by saying that we can just start there! Because it's been decades, it's standard industry practices, and the law hasn't changed (I know that the FTC has a wide executive mandate, but conjuring a rule is still not great).
Even if you want Amazon broken down, you don't want such a process to start on super shaky grounds like this. I don't know how to explain exactly what I mean here, but it just feels off!
There is no moral justification for "starting here", but there is a definite practical one. It would be quite hard for the FTC to open 3-5 different massive lawsuits at the same time, each of which would require tons of funding at a time when funding is seeming scarcer by the day.
Does the trick of creating different SKUs work for amazon though? If not, it seems like what they're doing might be worse. Since according to the article they're now enforcing the rule against having lower prices elsewhere through software, depending on how it's implemented it could end up having a much broader effect.
Yep, this is anti-consumer and anti-competitive -- it should be illegal. Here's where it gets interesting though...
In wal-mart's case they're trying to win on price competition alone. They're hoping with their volume, operations and efficiency, nobody else can sell with a lower margin. But Amazon is doing the opposite.
I looked into selling on Amazon recently and the fees were over 30%! Amazon requiring that sellers can't offer a lower price elsewhere drives the prices up on Amazon and off Amazon. Primarily, they're trying to prevent sellers from directing buyers to their own website where they can offer the product at a lower price because there are no 30%+ fees.
Costco makes its profit off its membership.
Amazon Prime offers a product at less than cost and then shifts that cost onto its manufacturers.
After all if I am paying Amazon for Prime shouldn't Amazon pay for the difference between more typical free shipping and two day shipping at minimum? Isn't that what the payment is for?
The reality is Amazon Prime is more akin to a loss leader and Amazon realized it could use its market position to avoid inflating it's price to reflect that loss by putting pressure on its partners.
Of course whether this is legal is an open question obviously but it certainly isn't the same as Costco using a membership as a profit source.
Walmart vs Amazon is more nuanced as the difference gets into market overlaps. Should Amazon be able to force you to use its fulfillment service to use its website (which is generally illegal for drop ship style setups like Amazon who doesn't take ownership).
So Amazon is certainly rubbing against a "you can't force bundling like that". The question is whether their "forcing" you in the way their website heavily focuses on Prime.
If Amazon wants to commit to certain sizes of orders, I'm sure the vendors will be happy with contractual price setting.
Not really. Their total profits last year were $2.8B and their membership income was $1.5B. It only represents the majority if you assume there is no cost to their membership income. But we know there is, because they have to have employees who do nothing but process memberships and they have to maintain all their membership benefits which also requires employees.
It's fair to say that about 1/2 of their income is from memberships though, which is still high.
According to their 2022 annual report, their membership revenue for their reporting year (the 52 week period ending August 28, 2022) was $4.2B, and their net income for the same period was $5.9B, so neither your numbers nor the relationship between them seems to be correct, unless Costco committed massive securities fraud.
https://investor.costco.com/financials/annual-reports-and-pr...
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.
Technically this is true but it makes a lot of sense by creating an analogous experience as with retail.
If I walk to the corner store to pick up something I’m not paying a line item for the logistics that delivered that item from a factory in China, nor a line item for the rent to keep that item sitting on a shelf in walking distance. I just pay the price of the item, and those costs are baked in.
Maybe an economist can argue this isn’t the most efficient way of paying for externalities but it’s hard to argue it’s without reason. It’s clearly a preferred consumer experience. Amazon prime is like a Costco membership. The only difference is Amazon handles last mile from the fulfillment center, Costco expects me to provide last mile fulfillment with my car.
This is clearly a win for consumers, who can now shop the aisles knowing exactly what they will pay for the item upfront before they put it in the cart and go to check out.
I continue to buy some stuff on Amazon. Mostly books (they're way cheaper than book stores) and gadgets (I bought a 12 volt car fan recently). The sort of stuff where I don't care who makes it.
even for people who don't think about stuff like that, it's way easier for the average person to buy everything from a single place than to go to a bunch of different random websites to buy things they want.
It even had option to set one time limit or recurring limit.
I don't understand why it was taken away, was it giving too much control to the customer?
Supported everywhere except Firefox (where there's currently a flag to enable). https://developer.mozilla.org/en-US/docs/Web/API/Payment_Req...
Completely agreed. Anecodotally, I used to shop on Amazon for things. As in, use the search function to find items to buy. These days, that is impossible. The only way to use Amazon today is to know exactly what you want, or for the item's value to be small enough that it doesn't matter (deoderant, ethernet cable, etc...).
It's quite frustrating to shop on the internet today. Google search sucks since SEO has made the results terrible. Amazon search is a frustrating mix of FANPOP brands and Amazon Basics. DDG, Brave, Bing, etc.. are all slightly better, but still very difficult to find anything genuine. Appending " reddit" to searches sometimes help, but the quality of reddit is quickly declining.
It seems like there is a significant opportunity for disruption in this space. The user experience sucks and prices are high. Sure, shipping is fast and free, but that doesn't help with product search.
I can’t say I agree. I’m not defending Amazon here but shipping is a nightmare with literally every other business. You aren’t going to get 2-day and you’re lucky if it ships within a week of ordering. In most cases there aren’t even options for faster processing/shipping for an increased cost.
I was recently at my parents at they have Bartesian (think Keurig for alcoholic drinks). I wanted to try some drinks they didn’t have so I went to the official site and started adding some stuff to my cart. IIRC the free shipping minimum was higher than Amazon (without prime) and there was _zero_ information on when I could expect the stuff to ship or the shipping time. I did some googling and found people complaining about how long it took to ship and I was only going to be at my parents for a little under a week. I went to Amazon and while there was a significant markup (20-30% IIRC) I was able to get it next day or 2 day depending on what I got. I bit the bullet and ordered from Amazon.
Not everything has to come in 2 days or less but some things absolutely do and I rarely see fast shipping from even big names like Apple that that rival Amazon (I just bought a mouse and keyboard from them and it took 4 days vs same day with Amazon, same price). In a number of cases you have literally no information on processing or shipping time to make an informed decision.
Again, not defending Amazon, I wish there were better alternatives, but it’s not as easy as “just order from the manufacturer”. I’ve been burned so many times doing that.
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.
There's a bit of an odd remedy issue with this lawsuit. The harm being asserted by the FTC is that Amazon charges more fees than competitors but requires that sellers not charge more on Amazon than on competing sites. Originally Amazon allegedly accomplished this with a Most Favored Nation clause, and today Amazon will kick you out of the "buy box" promotional space if they detect you offering lower prices elsewhere.
First, a breakup doesn't cure this harm. You could go all the way to the extreme of splitting Amazon's third-party marketplace into its own company and yet that company could still charge higher fees than competitors and condition the buy box space on sellers not offering lower prices elsewhere.
Second, no injunction makes sense either. Is a court going to force Amazon to advertise a price in the buy box that Amazon knows is not the lowest price available on the market? That's an absurdly anti-consumer thing for a court to order (and so a court would likely not order it).
So what cures the alleged harm?
Which employees go where, who gets what IP, what happens to all the underlying website/physical infrastructure? A "3rd party marketplace" unit is already likely smaller than is feasible for a court to oversee. By comparison, it would be a lot easier to split Amazon into "AWS" and "not-AWS" because the company is already organized that way.
They are suing someone with the power of a government. Whether it is "right" or not, the legal case needs to be incredibly strong and airtight to make it through court, and a loss looks really bad. It signals that other companies can be even more anticompetitive because they know the FTC will lose against the biggest fish in court.
To whom? it's not like they will lose customers. It's better to try than not to try
To the FTC led by Lina Khan, and supported/appointed by the Dems, in an election year.
Also, the FTC's warning will start being ignored by companies if they have a track record of crying wolf: https://www.wsj.com/articles/lina-khan-is-taking-on-the-worl...
People buy from them because it’s incredibly easy to check out, and because it’s incredibly reliable for delivery and most importantly they are the verb for e-commerce on the Internet: they own “buy online” as a brand and that’s a hard thing to compete with even if it gets broken up like ma Bell. Those three elements are very hard side problems you have to overcome to build a competitor.
Shopify is well on their way to delivering an easy checkout experience that could be aggregated to create a competitor of sorts, but delivery remains the hard side problem — the network of warehouses and reliable short term delivery windows you can count on. This aggregates demand and enables centralized payments, but you end up essentially replicating Amazons delivery system eventually to gain efficiency or remaining vulnerable until someone comes and takes you out with shipping rates.
It’s also the Craigslist problem all over again as well, because every small category of Amazon is an ocean to a competitor and each needs to solve all three hard side problems, so peeling off each division and improving the experience to consumers is a colossal task that wouldn’t create the same potential for efficiencies of scale or would end up advancing the possibility of winner take all relocation of the exact same issues.
I really do think Amazon needs to be broken up to create more competition, because the alternative seems like it would look a lot like the Costco scene from Idiocracy. That’s not a healthy end-result.
Also IMO Jet.com was the last upstart of any seriousness and they got taken out by Walmart, and that’s another angle anyone who breaks up Amazon has got to think about.
And then their is their oil and gas pipeline in the form of AWS, which is a strategic barrier all itself and allows Amazon to have insane scale that’s entirely paid for by entirely different customers. They can effectively operate for free on their own cloud.
They have layer upon layer of network type advantages that have to be unbundled if they are to be broken up, and unless it’s done profoundly well, they’re going to remain 1100 lb gorillas.
I could probably organize these thoughts better and more concisely but don’t have time at the moment, but this is what immediately comes to mind.
In my area AMZN deliveries are 5 days which is nothing special compared to the 1-3 day deliveries I frequently get from Wal-Mart, Best Buy, and every other online store. In fact, I regularly order stuff from Japan on Ebay that arrives faster than AMZN deliveries. (As Flavor Flav would say: "I ordered from Amazon Prime a long time ago, Amazon Prime is a joke in 'yo town")
I hear a lot of zip codes that have huge AMZN warehouses in them have 5 day delivery too but if you are Jim Cramer or a Congressman or something they have to have you believing AMZN is a little better than average as opposed to a little worse. If they had slow shipping in Hollywood you'd see sitcoms making jokes about slow Prime deliveries.
As for payments isn't AMZN just having Mastercard, Visa, and American express do all the heavy lifting?
As for easy checkout, checkout has very few clicks on Ebay. I check out from stores like Best Buy, Adorama, etc. and they all are pretty easy, in fact they don't make me click 4 times saying "NO I REALLY DON'T WANT TO SIGN UP FOR A FREE TRIAL OF AMAZON PRIME".
Product listings on AMZN already look like a scene from Idiocracy; often I see the same bullshit listing spammed hundreds of times, listings that are word salad and make so sense at all (and that AMZN doesn't want to investigate unless you bought it.) I am not worried that AMZN is privileging a $5.99 product over a $3.75 product, I find it highly stressful to filter through product listings that are obviously 75% bogus and call into question if I can trust any of them.
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Maybe if you live in Manhattan they send a bicycle messenger backwards in time to deliver you packages as soon as you order them but from my viewpoint as someone who lives four hours away from a big warehouse in PA, AMZN is the Dollar General of e-Commerce and the retailer of last resort which I'll only order from if I can't find the item elsewhere. So far as I can tell Amazon Prime is a big Jedi mind trick that makes people think it is all OK because they want to watch Rings of Power that bad or maybe that Xanth series that AMZN bought the rights to but will stay in development hell forever because it's just too squicky.
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.
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.
We share the frustration that much of the data and quotes by Amazon executives in the complaint that describe what we allege is monopolistic and illegal behavior is redacted. Amazon has 14 days from the entry of a temporary sealing order to provide legitimate justification for preventing this information from being revealed. We do not believe that there are compelling reasons to keep much of this information secret from the public."
If Amazon has done nothing wrong then why so many redactions. It might succeed in keeping the facts sealed away from public view but it only raises more questions.
It sounds like Amazon is a heavy source of bots on the web if they need to continually scrape millions of websites to monitor pricing. Perhaps someone can explain how that works.
They do? I am usually pleased when I see it's them. They are very consistent and rarely make mistakes, in my experience. I don't know what there is to complain about, outside of pointless hatred for anything related to the government. Meanwhile, it's a crapshoot if the FedEx or Amazon driver even gets it to the right address.
You seem to have implied a business’ right to exist, and operate at the expense of others free from regulation. As demonstrated, the earlier part of your comment was rather light on factually correct information, but could you cite the jurisprudence backing this idea of yours?
There is no such thing as 'operate at the expense of others' in this case. Again, nobody forces you to buy at amazon. There is nothing illegal with setting requirements for a seller, e.g. not selling at a discount elsewhere. If you do not wish to sell on amazon you can freely choose to sell at any other store. If one is whining about not having the same reach: Nobody has the right to challenge amazon for just being good and demand anything from them. There is no law that gives you the right to be able to do business 'in the land of amazon' at conditions that please you.
Amazon is a private company. The FTC is treating amazon exactly how many people wrongly see it, as a sort of common good - quote:
'Amazon is a monopolist. It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.'
(https://s3.documentcloud.org/documents/23991590/read-the-ftc...)
Bureaucrats.....Good luck proofing 'conspiration to monopolize'???. A thing which is not even possible in a free market society. The practices of amazon are in fact competitive - doing everything to kill the competition - a thing every capitalistic incentivized company who wants to become or stay at the top does. Those practices of the FTC are anti-competitive and a huge intervention, their policies is what hurting customers.
In addition, your definition is inconsistent with the standard applied by Lochner or the Constitution. In the majority opinion of Lochner, the power of contract was not unlimited, as the court deemed health regulations in general as a proper exercise of the state's police powers. However, the State of New York had to demonstrate that its health law regarding employee hours was not employment regulation in disguise (hint: it was) and that any such regulation did not infringe upon the protection of rights afforded by the 14th amendment (hint: it did)
Contrary to your statement, freedom of contract had preceded Lochner for over a century. Article 1 Section 10 of the Constitution explicitly recognizes that the states may not inter alia impair contracts. The Contracts Clause has been invoked in Fletcher v. Peck and Trustees of Dartmouth College v. Woodward. Both cases form the bedrock of modern contract jurisprudence today.
So consumers get free shipping that is mostly paid for by third party sellers because it gives them access to a massive customer base. I dont see the problem?
> Amazon, one of the biggest companies in the world, for monopolization and unfair methods of competition.
Edit: sorry for snarkyness.
If eBay/non-FBA is a flea market, FBA is a online mall.
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....
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...
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'.
A smartly organized market economy does not wait for oligopolies to wreak havoc before it resorts to costly and slow litigation.
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.
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.
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.
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.
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
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.
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.