'Everyone has had enough of Amazon'
By "everyone", they undoubtedly mean the ones who could not compete. Amazon's customers are probably not complaining.
By "everyone", they undoubtedly mean the ones who could not compete. Amazon's customers are probably not complaining.
Amazon is a heavily subsidized corporation. It operates from a tax shelter (Luxembourg). It underpays it's American staff (who are then receiving US welfare as supplement in order to survive).
Giving away delivery for free is a form of predatory pricing. In general, large market players have been banned from predatory pricing under European competition law for decades.
Competition is great but let's not pretend that Amazon is outcompeting other (online) bookstores fair and square.
This line of reasoning always amused me. Free = predatory? Can someone explain how one arrives at this logic?
If the thinking is that "free" leads to "monopoly" which then leads to dramatically increased pricing once all competition is eliminated, this has absolutely, empirically and historically, been shown to be false. It simply never happens. Or more accurately, if/when it has been attempted, this practice has swiftly been defeated by competition.
Edit: An afterthought: If free = predatory pricing, why do we allow charities to distribute free shelter, goods, and food? Surely these institutions are displacing some sales that would otherwise take place, thus negatively impacting those businesses that would otherwise have profited from those sales?
Charities/non-profits are heavily regulated in France, and they simply can't get enough "capital" to try this kind of scheme. You need so much capital (basically you're trading capital for market share, you'd better be the biggest when you start the race) that it's mostly public companies who can do that. That is also why Europe doesn't like state owned companies on free market, having the state budget as "available" capital, they can undercut everybody without endangering their lives (that's where the left/right doctrine kicks in).
Unlimited data plans in the US (or almost everywhere else) is where this has happened
US Telecom in general is an interesting example because it's one of the few industries that typically do soak consumers, because of what essentially amount to government enforced monopolies.
Perhaps this was before your time, but there's a reason that Cap'n Crunch and blue box pirates like Jobs/Wozniak had appeal - the alternative was monopoly pricing.
>>US Telecom in general is an interesting example because it's one of the few industries that typically do soak consumers, because of what essentially amount to government enforced monopolies.<<
AT&T was only able to retain its monopoly because the government helped it enforce that monopoly by prohibiting competitors from entering the market. See the Kingsbury Commitment.
The only way monopolies succeed is if government force prevents markets from functioning.
Tell me more about functioning markets and how they can only be prevented by government force.
I don't know why people think the historical lack of monopolies (without government backing) is some right-wing nut-job theory. Not even the robber-barons wielded monopolies that allowed them to engage in "predatory pricing" or the other feared ills of monopolies. Go read about Vanderbilt or Getty or Carnegie. In each of their industries, consumers saw prices fall dramatically, even after each consolidated control over major portions of their respective markets. The fear that they would raise prices dramatically after acquiring their near-monopolies never materialized.
Edit:
>>Tell me more about functioning markets and how they can only be prevented by government force<<
Sorry, I misread your snark. I never said functioning markets can only be prevented by government force (whatever that even means). I'm saying that throughout history, you do not get monopolies that harm consumers unless the government backs the monopoly.
But your points are worth noting, and Americans might feel a little differently if it was a foreign corporation.
Look, Prime is genius, their prices are ridiculously low, their return policy is more than generous, and as long as their shareholders are happy to subsidize me, the consumer, I'll probably never get enough.
Europeans feel that underpaying your employees to the point where they rely on welfare programs to subsidize their paycheck is not only wrong (that's fine, life's not fair) but distorted and not-free-market. I have to agree with them on the distortion part.
Edit: Maybe you're trying to say that Amazon's competitors pay their employees more than Amazon because they have bigger hearts and are willing to crash their businesses before paying (legal, but unfair) low wages. That's a pretty big claim that requires some evidence. I think it's more likely that they are losing for other reasons.
At least Amazon can still compete on service and convenience, which are their strengths anyways.
I'm not even saying I agree with labor law in France, I can just see, things being what they are, why this is more reasonable than it looks for them.
And given the Poujadist nature of french society you can add an order of magnitude at least to how this is considered in France.
It just makes sure that customers aren't allowed to get 5 percent discounts and free shipping.
I would.
This, plus great customer service and extremely popular/convenient services like Prime are probably the actual reason that Amazon is beating everyone else. The guy I was responding to is bringing his established beliefs about fair labor to a story that isn't about that, in other words.
See here: http://www.businessinsider.com/chart-of-the-day-a-long-view-...
I've seen a lot of sources for Wal-Mart employees under similar pay levels. It was SNAP, TANF and Medicaid primarily, not so much 'welfare'. Still a sizable subsidy, and a decent % of those people's ultimate pay/benefit package.
That's still hard to make a living on at 40 hours and no benefits, though. And it is unfair to competitors who pay a more livable wage without forcing their employees to get on medicaid.
As a Tax payer in the UK I am not happy about subsiding a profitable companies work force
This article may provide a better overview: http://www.businessinsider.com/brutal-conditions-in-amazons-...
All of that paid to someone that has only a high-school equivalence certificate.
While she won't get rich working there, she doesn't have to resort to food stamps or other forms of welfare in order to make ends meet.
So what's been happening is that chain stores have been eating independent book stores alive well before online shopping was widespread.
Why? Price, poor products and service and "blame it on the customer" culture.
Local businesses have been hanging themselves for years on these fronts.
Amazon sorts the above perfectly and you don't have to leave your house.
The entire time in the back of my mind I'm thinking I could have bought the damn thing on Amazon for cheaper and would not have to put up with this bullshit. As an American in Europe I'm sympathetic to some of these stores, but a lot of them are going out of business through their own incompetence.
Now I have a 50euro credit to a chain of stores that is bankrupt.
If the social-minded person wasn't the majority, they wouldn't have elected a government that would pass such a law.
It's a co-ordination problem: if one person does X, nothing much happens, but if everyone does X, it makes a difference. So each person, thinking as an individual, can rationally say, "It doesn't make sense for me to do X", but the same person can also rationally say "it does make sense for everyone to do X".
What you clearly don't understand is that if you prevent laws like this from occurring, then French cafe owners or bookstore owners would be forced by the market force - competition - to innovate. Create better service or product for their customers. If a cafe owner would succeed - and not be penalized with 75% tax - then he could open more and more cafes, having a franchise, succesfully competing with Starbucks. And if his innovative ideas were good enough, he could even start threating Starbucks position in the US. But that will never happen. Why? Because with Government protection on his side there will be no market force (i.e. customers who prefer competition) to force him to innovate. He will just sit there 8-5 like rest of the French society thinking that a GOvernment edict can somehow change the world in which he's living. It can't. Because people already voted with their money clearly showing winners and losers. And unless losers get to work, they'll be just that. Loosers.
Thinking that innovation is enough is a little bit naïve, you need more than innovation to get market space, ask Archos for details about that. Quick got a place in the sun with the very innovative position of selling hamburgers cheaply, end result: Burger King left the country crushed in the war between Mc Donald's and Quick, but innovation is zero on the hamburger front.
Notice that Starbucks and Amazon are american lifestyle companies, of course there is going to be an appeal to the lower income class for services that are immediate and cheap. Since they are paid a poverty wage, they are too busy working to have the time to do things like go out for lunch or cook a meal.
A woah, guess what? Those business models perpetuate the same conditions that lower work environment standards, wages, employee health and morale. It's a positive feedback system that needs to be nipped in the bud before it completely devours the French economy.
And there is another, moral hazard kind of a point: Why would you like to force people to buy something they perceive as worse? You are right they worked hard to get this money and this is not your or Government business how they spend it.
I know! Those independent bookstores should just move to Luxembourg so they can compete with Amazon.
If that is the true justification for the new law, it is at best "pre-crime" enforcement - protecting Amazon from themselves, from getting into a situation where them might risk committing predatory pricing and monopolistic practices.
More realistically, follow the money and apply basic public choice theory. It's not like the economic history of the world hasn't seen this pattern a few hundred times before.
It is interesting how in two comments we have encompased what are the two greatest flaws of practical governments and free markets.
In my oppinion this is a failure of competing merchants as they are sleeping and do not see writing on the wall. Instead of adapting they look up to the regulators to save their comfortable industries. Which in itself is a flaw of the modern western socioeconomic situation.
IMHO its a fact that Amazon is constantly maneouvering towards a situation where it becomes dangerous due to its modus operandi.
To be safe from Amazon threat, producers will have to find access to markets in a fashion that will prevent them from over exposing themselves to Amazon.
And any good regulation should be about lowering barrier to entry towards would be Amazon competitors.
I am certain that eventually producers will have to cut out the middleman (Amazon) or vice versa.