Amazon execs intentionally made site shittier to rake in more profit – Lawsuit
vice.com
vice.com
This can't be a violation of any law or ethical rules... Does anyone seriously think serving only good and relevant ads is an ethical obligation. Can't retailers accept ads from anyone without vetting for quality control.
The only thing I can think of here is FTC is trying to make a weak case that Amazon is a monopoly by claiming look they had the power to show crappy ads. Which is a weak argument.
Maybe Amazon is too big and too dominant in the market. I don't know. But this article and this aspect of the case looks weak.
Ad buyers are also Amazon consumers that got harmed, which matters if we go by the traditional benchmarks for antitrust.
It was one thing to see the 'professional' ads for T-Mobile internet and makeup and whatnot, but I'm seeing a ton of clickbait-style ads for things that are very clearly get-rich-quick and/or straight-up scams. "This one new method of heating your house is taking America by storm!" "This new device that cleans your house in five minutes is being called revolutionary by experts."
Not only is it full of lies, I also love in socal, why the hell would I need an uber heater?
Banks and VCs are laughing on this.
Today's economy is not a zero-sum game. It's much more complex than that.
Disable targeted advertising on any platform that allows it and you’ll see the lowest form of generic click bait junk ads. Twitter used to allow this and I disabled only to be fed streams of shock-factor click bait rather than industry-relevant ads.
High-quality, expensive, polished ads only go to demonstrably high-value demographics.
Turns out there’s at least some merit to the argument that targeted ads create a better experience (for some, at least).
Arguably a firm that has established itself as a standard marketplace with strong network effects, should not be allowed to favor certain products with disproportionate placement in exchange for a kickback. They have become more like a government body than a private enterprise, and if they're dumb enough to slaughter that golden goose for temporary boosts ("dinner"), their behavior demands a degree of regulation if we are to ensure market competition & ensure a benefit to consumers and manufacturers.
What is the proposition for an independent vendor selling on Amazon? To them, the service of selling their merchandise is essentially a monopoly market, they don't get a choice of whether to participate, and Amazon charges high fees to start with and is now demanding ever-higher fees for reasonable search placement.
It might show harm, but in no way does prove monopoly.
I also find it odd that, on the merits of the case, Amazon is getting worse. Is there some corrective action that will reverse that?
> take your business elsewhere
You can't necessarily do that. Amazon is a pseudo monopoly.
But if the FTC is trying to use that as antitrust evidence against Amazon, it feels like a weak angle. Which is not a good sign given their recent history.
I can google a product and get 9 different online storefronts for almost any item.
Edit: or they are dropshippers using Amazon fulfillment
There is no where else. Not meaningfully. No, whoever you were about to mention, not them either. Hence, monopoly.
Advocating for a less equal ads marketplace seems like such a strange position for the FTC to take.
Are they simply throwing out every possible accusation and seeing what sticks?
Edit: changed “monopoly” to “monopsony”
Yes, Amazon is a middleman and they take as big a cut as they can.
Is that abusing a monopoly or simply the nature of being the most successful marketplace? That’s for the courts to decide, I guess. (Or not since they’ll obviously settle before it goes to decision.)
Amazon is not only charging sellers for placement, but they deliberately threw a bunch of fake and shitty products up on their marketplace to force sellers to cough up more money.
They also require sellers not to sell their product cheaper anywhere else, which I’ve never understood how they can get away with.
But SEO is quite hidden and hard to define. Ads are there, see a banner. SEO? No obvious 100% criteria for it.
Can one tell that a text is produced by SEO? Usually no (especially, when it's good quality).
Now, the difference is:
- In ads case, a government comes and asks for a tax. Because there is a clear case for a transaction in an economy sense (ad for money).
- In SEO case, no transaction proof is there. Can't come and ask to pay tax, or regulate anything. It could be a happy customer who wrote a piece of text. Or clever SEO author. Or both mixed. Can't tell! In this sense SEO brings less or no tax.
How do you define that? Do you exact match on query text? How products that convert better? Have lower return rates? Is a 1 start product that matches the query exactly better than a 5 start that mostly matches? Etc, etc.
Ironically, today every platform includes a free browser.
Other than harm to consumers, what do you say is the harm from a trust? After all, aren't high prices an indicator of a monopoly?
> And hey, it worked!
And maybe it should. Imagine the hellfire and damnation stemming from having a free browser!
I suppose I'll be damned forever for providing a free implementation of D.
Monopolies tend to keep growing until they are broken up. Monopolies don't have to charge high prices to consumers if they can increase their profits at the expense of sellers. In the case of Amazon, sellers may be authors or publishers who get squeezed. They may be small businesses. They may be big businesses. There is additional harm to the consumer from the distorted marketplace which results.
You may not be aware, but Microsoft engaged in a lot of monopolistic activity, including preventing OEMs from including the BEOS operating system as a dual boot operation on systems which shipped with Windows. You may also not be aware that Microsoft tried to get Apple to kill their own browser, a.k.a. "knife the baby". Google it.
No, they don't. Left alone, they grow until they collapse from internal bureaucracy and inefficiency.
> Monopolies don't have to charge high prices to consumers if they can increase their profits at the expense of sellers.
Microsoft gave away the browser for free.
> In the case of Amazon, sellers may be authors or publishers who get squeezed.
Resellers normally buy at wholesale prices and sell at retail. The same percentage as Amazon takes for providing retail services. As a small business (Datalight and Zortech days) I am well aware of this.
> You may not be aware
I am aware. Microsoft failed to stop Linux, and failed at stopping Apple.
Making a much better product often does that.
You'd know what I mean if you were a Netscape user :-/
I started on gopher and Mosaic and Netscape was far ahead and good enough for a long while. Only until IE4 did MS pull away. Of course by IE6 the damage was done and they left the entire industry broken with a moribund dominant browser that took a decade to recover from. Rot in hell.
Eventually, maybe. But it usually takes far too long and if we speed up the process (and smooth out a boom/bust cycle at the same time) then that seems like a win to me.
If we agree that smaller companies are more efficient then we should actively bias the economy towards them rather than allowing big companies to outcompete them purely because they have market power.
Trying to bias an economy towards small business means your economy will be backward and unproductive.
> If we agree that smaller companies are more efficient
I did not say that. Small companies become big companies by being more efficient than existing big companies. As time goes on, big companies slowly get strangled by bureaucracy and inability to adapt to changing times, and come unglued.
But the economy needs their efficiency when they are young.
Nice straw man you got there! The point is to ensure a competitive marketplace where small companies can survive.
The German Mittelstand[0] companies very much disagree with your assessment.
there are enough economies where productivity is driven by small companies.
For example: about 56% of employment and 43% of revenue of germany comes from small companies. It was even higher in the past.
https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Unter...
In my experience he will confidently state his existing beliefs as the absolute truth, refuse to provide any supporting evidence, and ignore any evidence to the contrary. ¯\_(ツ)_/¯
There is an argument that the browser is a feature, not a product. But that is not the case for back then.
Have you noticed that vast categories of computer programs are free today? Do you realize that every one of those was funded by revenue obtained elsewhere?
That whole anti-trust case was chock full of jaw-dropping absurdities.
BTW, the D Language Foundation is funded by donations. We charge $0 for our products. Anyone can also fork it and do whatever they please with the fork. We particularly like it when people use it for commercial purposes, i.e. making money!
But to pretend Microsoft was not engaging in questionable practices feels very bullshit heavy. And an equivalency game here is very discrediting to both arguments.
It is frustrating, because I think it is largely fair to say that netscape was the worse option at the time. Navigator was largely trash. That said, jscript and activex controls were both obvious land grabs on the internet. I'm... not really sure how most any part of what all Microsoft did back then can be defended.
Jscript was developed originally for Netscape in 1995 and was standardized in 1997. Not sure how that is a questionable land grab by Microsoft.
P.S. I wrote a jscript interpreter back in 1999 or so. It was used as a drop in replacement for Microsoft's implementation. It did not require heroic efforts to make.
The version of basic included with most computers didn't allow you to compile your program.
Besides, what you're saying is people wrote better replacements for the bundled stuff. Netscape, however, was worse than Explorer.
It wasn't just having IE be distributed with the operating system, or even having it be the default (as the EU later got upset about). They would have been perfectly fine in this position had they not attempted to use it anti-competitively: coercing OEMs to not include competing browsers like Netscape on pain of financial penalties.
That is textbook monopoly abuse.
I later switched to Explorer, not because it was free, but because Explorer crashed far less often than Netscape. Netscape crashed constantly. Only a desperate person would continue to use it.
There was a lot of money made in the PC era by making better tools than the ones bundled with DOS. Netscape wasn't one of them, because it was worse than the bundled one.
However, seeing as Amazon calls them defects, it sounds more like they're just non-relevant ads. Sellers might have a case that they were paying for some level of targeting and and getting worse click through rates than advertised.
And not just internet rags that bury a tiny slither of content under dozens of ads and popups.
The classic one is insurance sites. It's an open secret that they make the claims process as difficult as possible. The ideal insurance claim platform for an insurer is basically to register all zeros on Lighthouse, with a session timeout 50% less than the observed time taken to complete the process (which of course has umpteen pages with no progress indicator and a super slow page load).
Similar with government websites related to welfare and services. The harder it is to use, the more people will give up, and the greater the cost savings.
https://www.ftc.gov/news-events/news/press-releases/2023/09/...
few want to explain 'I Went to a Gay Rodeo, and Now I Want to Bone Cowboys' to co-workers.
[0]: https://nymag.com/intelligencer/2013/09/quiz-real-vice-headl...
I'm curious, care to elaborate?
It's seem to have stopped since ZIRP has ended and Bezos has moved on but for awhile the AWS profits seem like they were feeding an ever growing conglomerate of disparate businesses with the intent of owning every market. [1]
Such actions feel somewhat similar to Microsoft using its dominance and profits from Windows to give its browser away for fee.
This ads suit seems like a distraction.
That said I'm not particularly anti-monopoly and have a Prime membership - mostly just curious.
[1] Anti-Trust Paradox - Lina M. Khan https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
The appetite for this kind of action hasn’t exactly been great the last few decades, and big swings can lead to big misses (like Activision-Microsoft)
EU seems to have a better track record reigning big tech than US DOJ.
Before it became the insane high-volume low-profit fraud ridden race to the bottom it is now, I made spending money in university selling Wii accessories on both eBay and a simple online shop.
I was always up front about authenticity, long shipping times, and tested products myself first.
Then Amazon and Aliexpress came along (to the mainstream) so it’s no surprise they couldn’t remain viable.
What about how AliExpress' search works? The first few listings will be prior viewed items, typically wildly unrelated to the current search-- just remarketing ads based on products visited. Then the things labeled as ads are even more outlandish and inappropriate (serums, pills, pseudo-scams)-- but I guess the ROI is there, else they wouldn't be running them. Similar to the old days of FB where any scammy rebill products were allowed, then once an advertiser base was built, they canned all of the exceptionally unscrupulous advertisers.
>"Customer Obsession: Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers."[1]
It's probably no surprise that this is little more than a meme whose sole purpose is to be ceremonially regurgitated during job interviews.
[1] https://www.amazon.jobs/content/en/our-workplace/leadership-...
The problem lies in the fact that there's no one single definition of who "the customer" is, and no one single definition of what the best thing for that customer is. One team might see customer obsession as making sure only the best ads are shown, but there's probably another team who thinks that being obsessed about customers means showing the _most_ ads, while a third team sees _the ad companies_ as "the customer" and thinks that being customer obsessed means making them as happy as possible.
There's a weird side effect about being so serious about customer obsession. Like I mentioned earlier, it's often used as a promotion criteria, so people will come up with weird stuff and then spin it as "customer obsessed" so they can get promoted, even if it's something like showing more ads or constantly reminding people to buy something (which probably gets spun as "helping the customer to not miss out on a good deal" or something like that).
From the post that we are commenting on here:
>"... show that company executives, including former CEO Jeff Bezos, knowingly made changes to the e-commerce platform that boosted profits while harming consumers and sellers, and making the site less usable."
It's pretty clear who the customer were here. It's literally all the parties that were not Amazon.
Something that "gets cited in meetings" yet not applied in practice pretty much supports it being little more than meme status.
So no, it's not very clear.
(I'm not at all claiming this is unique to Amazon. But it uh. Does seem to be the case there. Like most large companies.)
Even with the Customer Obsession LP, it's not too hard of a stretch to arrive at a conclusion where more ads are shown. Better are worse are, in many aspects, quite subjective in these areas.
Getting rid of the long tail of defects takes a lot more effort than getting rid of the most obvious cases.
advertisements during search, before viewing products, upsells before or during the shopping cart, popups when buying or afterwards, and all of the above when receiving/"activating"/using your product.
I feel there is a "respectful" business model/opportunity that people will pay for, but I don't think business people stand up for things, or if they do they sell out and the monetization begins.
https://www.ftc.gov/system/files/ftc_gov/pdf/1910134amazonec...
And that situation is only stable if for some reason the vendors have to be on your site and keep advertising anyway, which is the hallmark of a monopoly adjacent situation.
I'm glad something (for now it looks a bit like a token action) is being done about monopolies and funky business structures, though. Google, Apple and Microsoft could be next, with their "using our product also forces you to use our service" practice.
[0] https://skeptics.stackexchange.com/questions/8146/are-u-s-co...
The government has every right to attach strings.
They aren’t protecting consumers, they’re protecting sellers.
"modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so"
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...