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Comment by vivekd | Hacker News Reader

Am I reading this right? Amazon accepted advertisers hawking junk ads which made ad prices more expensive and gave less relevant ads to their customers.

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.

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“Made site shittier to boost profit” describes nearly 100% of online advertising

Exactly! I would go further it applies to almost 100% of all advertising from TV to radio to billboards, poster ads ...

I don't know what has happened to YouTube ads in the last year or so, but now that YT is cracking down on adblockers, I'm seeing a lot of them. One thing I'm noticing is that most ads are absolutely garbage.

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."

I'm getting a lot of magical heating unit with obviously wrong information.

Not only is it full of lies, I also love in socal, why the hell would I need an uber heater?

It amazes me how much advertising is literally fraud. Aren’t there authorities that are meant to police this kind of thing?

It's a multibillion business and helps other businesses grow. And it even pays (some) taxes. Why would any authority even think about killing it?

Consumers have a limited wallet anyway, and you know how most people are: they will spend most of their income anyway. So the ad business is more about shifting where the money goes, than about conferring any extra value.

> Consumers have a limited wallet anyway

Banks and VCs are laughing on this.

Today's economy is not a zero-sum game. It's much more complex than that.

You may be seeing the ads but you’re likely still blocking the tracking/targeting.

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).

"Raised prices to increase profits" describes many business decisions, but if a company does that after eliminating their competition, policymakers & economists understand that to be a bug of the algorithm 'capitalist market competition' that requires redress, a betrayal of a populace that has been sold a system on its merits (and is willing to tolerate its costs for those merits) but which is not displaying those merits consistently and is failing to improve our lives.

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.

Imagine what the exact same FTC would be saying if Amazon exerted control over which ads were displayed based on what converted to more product sales (and thus revenue for Amazon).

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?

I don’t follow your reasoning. Amazon stands acccused of “pay to play” market behavior. If you want to participate as a seller in the Amazon monopsony marketplace, you have to pay. That’s the behavior of a monopolist.

Edit: changed “monopoly” to “monopsony”

Grocery stores sell shelf space, particularly prime positioning, and that’s a practice that predates the internet. Add to that the fact that most websites sell ad space as a primary or secondary revenue generator.

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.)

It’s exercising monopoly power.

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.

I find Amazon's search to be worthless. Frequently, I search for a book with author's name. Frequently, that book does not show up. On more than a few occasions, it would be on the 2nd page of search "results" (most of page 1 are "sponsored" = adverts). Now, I just use Google and that results in the book I'm looking for. On other things, I find Google returning less than useful results when searching for things.

The correct solution is a no ads marketplace. Where search results return what the user searched for and literally no one (not even Amazon) gets to pay to put their products at the top of the results.

Maybe that’s your preference, but it certainly isn’t against the law to offer advertising.

Yet

Parent's point is that maybe it should be.

Remember SEO. Is it ads? No. Does it bring money? Yes. Expensive? Probably, simar to ads: both will eat the whole budget until empty and ask for more.

But SEO is quite hidden and hard to define. Ads are there, see a banner. SEO? No obvious 100% criteria for it.

SEO is hidden? SEO is the sea that the entire internet has drowned in, unless you know where to go diving through it to find underwater caves that still have some air left.

Can a regular person (or an expert) tell that you see an ad? Usually yes, as it's banner or some visually distinct piece of a web or real estate.

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.

> what the user searched for

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.

Yeah, this was my reaction too. They run shitty ads and serve shitty search results: fair enough, take your business elsewhere. I'm not sure what the story is. I feel I must be missing something, because it's the FTC raising a stink and not just Vice. Whether it has merit or not, the FTC presumably is not just trying to get clicks. I'll wait until another (better) news source provides additional context before forming an opinion.

I complained on the first round of this that it is rosy glasses of a good internet in the past. Search and ads suck. Period. Always have.

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?

Here lies the issue:

> 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.

> Amazon is a pseudo monopoly

I can google a product and get 9 different online storefronts for almost any item.

https://sell.amazon.com/learn/ecommerce-storefront

Edit: or they are dropshippers using Amazon fulfillment

> take your business elsewhere

There is no where else. Not meaningfully. No, whoever you were about to mention, not them either. Hence, monopoly.

This also affected ad buyers, as they had to compete with the junk and pay more to get an effect.

Ad buyers are also Amazon consumers that got harmed, which matters if we go by the traditional benchmarks for antitrust.

I guess it depends on what counts as junk. It seems like allowing false advertising or outright malicious scams should be an ethical if not legal issue.

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.

Wait until you hear what that other company did. They inserted a whole extra ad slot in the search results! Half the organic results are now below the fold. sob

I buy a newspaper and half the pages are ads!!!

The combination of 'it makes it more expensive for the consumer' added with 'sellers are not allowed to sell their products cheaper on other sites even if it is cheaper to sell on those sites' means they are anti-competitive and harming the market. This is the issue.

The case against Microsoft was based on Microsoft giving away a free browser. That never made any antitrust sense - no consumer harm was ever demonstrated.

Ironically, today every platform includes a free browser.

Consumer harm wasn’t originally a requirement for antitrust enforcement. It was added by conservative jurists mostly to make it difficult to successfully bring antitrust cases. And hey, it worked!

> It was added by conservative jurists mostly to make it difficult to successfully bring antitrust cases.

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.

(sigh) I think you're a lost cause, but maybe someone else will read this.

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.

> Monopolies tend to keep growing until they are broken up

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.

Their actions were taken to stop Netscape, and succeeded. Keeping Linux and Be off the desktop succeeded well enough also.

> Their actions were taken to stop Netscape, and succeeded

Making a much better product often does that.

You'd know what I mean if you were a Netscape user :-/

They did lots shady things also, belt and suspenders style. Which is the subject here.

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.

> No, they don't. Left alone, they grow until they collapse from internal bureaucracy and inefficiency.

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.

Big companies are the engines that drive an economy with productivity and employment. Small companies are the future big companies. A healthy economy needs both.

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.

> Trying to bias an economy towards small business means your economy will be backward and unproductive.

Nice straw man you got there! The point is to ensure a competitive marketplace where small companies can survive.

Small companies do well in a free market. They always have. There's no need for a bias towards them.

> Big companies are the engines that drive an economy with productivity and employment

The German Mittelstand[0] companies very much disagree with your assessment.

[0] https://en.wikipedia.org/wiki/Mittelstand

The Mittelstand are not small companies, they have revenues up to a billion euros.

> Big companies are the engines that drive an economy with productivity and employment

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...

That means most of the revenue is coming from the big companies.

> (sigh) I think you're a lost cause, but maybe someone else will read this.

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)_/¯

The case against Microsoft was that they used revenue from other markets to offer a browser for free so that they could prevent a competition in the browser space...

There is an argument that the browser is a feature, not a product. But that is not the case for back then.

Both parties offered a free browser. Boo-hoo.

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!

This is largely true, of course, but also a complete non sequitur? There have been free and donation based things for a long time. Shareware was very awesome, to me.

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.

What is "questionable" about it?

Questionable about their practices? I remember the effort it used to take to get netscape to be the browser your machine used. It was comically difficult to do, at times. So much so that I was never comfortable going for the paid Opera, as I just didn't think it would stick to my machine.

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 and activex controls were both obvious land grabs on the internet

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.

I remember jscript being mainly a way for them to not have to use the name javascript. Which, fair that that entire history is nonsense. I have weaker memories of doing things that would work in jscript that would not work in javascript. But, I also consider that in my concession that navigator was not a good browser.

You comparing the D Language Foundation to Microsoft here is nothing short of hilarious. Does your nonprofit even have employees? How much of the market have you captured? How many billions of dollars in revenue are you getting?

It wasn't so much offering a browser for free as compelling PC vendors to not bundle their competitor's browser. You might of course argue that a PC should have zero browsers bundled...

Microsoft also bundled a text editor (EDLIN). It didn't impair anybody else from writing and selling editors. They also included a programming language (BASIC) for free. Didn't impair other language creators.

Nobody did word processing in edlin.

The version of basic included with most computers didn't allow you to compile your program.

There were innumerable code text editors for DOS.

Besides, what you're saying is people wrote better replacements for the bundled stuff. Netscape, however, was worse than Explorer.

Classifying what Microsoft got in trouble for as merely "giving away a free browser" shows that their PR campaign was a resounding success.

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 installed and used Netflix for free in those days. Nobody paid a penalty for that.

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.

But were you using Netscape or Netscape Gold??

The free one, whatever that was. It was a long time ago. If you're saying Netflix Gold didn't crash as often, the crashing free version was not a convincing advertisement for 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.

In other news: Supermarkets put high profit items up front, and inconveniently hide low profit items back.

They might just want to generate bad PR for Amazon even if they lose the case legally.

If you knowingly participate in scams, hawking junk <anything>, defrauding customers, or any other thing, then yes, that's some shady shit. Does it break any laws? Not a lawyer, but it damn sure breaks the spirit of law (intentionally leaving out "the").

It proves they are a monopoly and harming consumers. Consumer harm is a keystone of antitrust enforcement.

It proves they are a monopoly

It might show harm, but in no way does prove monopoly.

While I largely agree: "knowingly made things worse for consumers and suffered no consequences" does seem like meaningful (but far from sufficient) evidence of excessive control over a marketplace. If things were healthy, you'd expect competition to capitalize on that enshittification.

It does prove monopoly, because it demonstrates the exercise of monopoly power.

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