I also blame modern journalism for being heavily centered around corporate interests. They won't cover any product or tech which isn't backed by big corporations. That is a major source of anti-competitive dynamics. It feels like every journalist has been bribed to the eyeballs to only cover products from certain companies.
They just punish Amazon for being successful.
On the other hand, they (DOJ) should use the maximum might of the criminal law to prosecute using fraud statutes for sellers (and Amazon itself) when ratings have been manipulated, resulting in decades in prison.
Incidentally I heard today how many laws against anti-competitive behavior were stripped with Carter and Reagan onward, and it's become a trend in our hyper-corporatist world now that's hurting workers and income classes below the highest.
Watch "DEF CON 31 - An Audacious Plan to Halt the Internet's Ensh*ttification - Cory Doctorow" on YouTube
>>> For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible. >>>
This means if Amazon sees a lower price elsewhere they effectively make the product unavailable on their site? Or is it more complicated than that.
On the face of it, while I am open to the stance this is monopolistic, I can naively understand why Amazon wouldn’t want to offer a product at a price that isn’t competitive.
I’m sure there’s more to it, can someone explain?
I believe the way it works is as a seller you’re no longer eligible for the buy box if your item is found to be sold cheaper elsewhere.
> One set of tactics stifles the ability of rivals to attract shoppers by offering lower prices. Amazon deploys a sophisticated surveillance network of web crawlers that constantly monitor the internet, searching for discounts that might threaten Amazon’s empire. When Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same product on Amazon, Amazon punishes that seller. It does so to prevent rivals from gaining business by offering shoppers or sellers lower prices
Price competition conflated as punishment. The FTC's mandate is to promote competition. Here, they attack Amazon for competing effectively.
Also, advocating for other online superstores is playing the world's smallest violin. Walmart has decimated mom and pop stores. They're unable to beat Amazon at the online game. Truly remarkable achievement, really.
Why are redactions even permitted in a lawsuit involving a government agency and a corporation? Don't mention Project Nessie at all if you can't tell the public what you're arguing about. "Trust us, they were monopolists" isn't the same as laying out the facts for all to see.
The fact that Amazon owns the market and fulfillment and even last-mile delivery is the most obvious case of vertical integration I have ever heard of, and I personally interact with it in some way at least once every week!
That's very nearly the same question.
It should be that you can sell a cheaper, better version of an Amazon basics product and overtake it.
If there is literally no way to do that... Amazon is clearly a market manipulator.
I'll have to see the argument they actually make in court.
The current state of Amazon is the result of a very slow trajectory taking 20 years. It happened in plain sight and still we allow it to grow until it's a monster where most of commerce has to submit to.
We allow Google to become the leading search engine, advertiser, browser maker, mobile operating system maker. Effectively owning the internet. These should be 4 companies, not one. And even the 4 companies should not be of the current size.
Stop allowing companies to grow into platforms, gatekeepers, monopolists that squeeze everybody dry.
The current state is anti-market and anti-capitalistic. There no longer is any market when you allow these monstrosities.
They're all terrified of the invasive investigations and what could be revealed, the scrutiny they'd be persistently under, and the time demands involved (it's no doubt miserable battling the government in a major anti-truist suit).
Doesn't seem likely to fully turn around as the next Republican president will likely appoint another toothless chair of the FTC.
Democrat presidents for the foreseeable future will probably be going after big companies more than their predecessors in the 90s and early-2000s did.
I think you can also measure their power in the same way as Amazon - The % of fees that they capture as a percent of sales volume goes up every year. Slow squeeze.
Does this mean FTC got a new spine (or have I misunderstood and they had one all the time)?
If so:
Can I also suggest someone looks into:
- Googles abuse of market position to take over the browser market
- Microsoft trying to abuse their market position to take over the browser market (again)
?
Nationalize all online selling, and have a central pricing authority?
Where does one draw the line, with an interest in not taking it to the extreme?
I don't think anybody actually buys that line.
Do they believe that internally?
- Don't be evil
- Drain the swamp
- Hope and Change
I know some folks who really genuinely believe that Amazon is a force for good, the criticism is exaggerated, will talk about how lucky they are to work for the World's Best Employer, and will get a bit sulky if you say anything negative about the company.
Generally though, I think it's understood that "most customer centric company" doesn't mean "we will put the customer before ourselves because we are such good people", but instead "strategically keeping the customer happy is better for the shareholders in the long run".
It's the same with most of the LPs. They're packaged in a way that makes Amazon sound like this amazing company that really cares, but they boil down to "16 ways YOU can enrich Amazon's shareholders (you won't believe number 15!)".
https://www.wsj.com/us-news/law/the-hedge-fund-that-made-a-k...
AMZN price will be largely unchanged.
There does seem to be some antitrust exposure there:
========= Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.
Isn't Prime a fulfillment service in this context? How would a seller be Prime eligible without using Amazon fulfillment?
https://i.imgur.com/5HpZT6Z.jpg
Google absolutely launched a nuke at Amazon.
What were those updates exactly?
Anti-trust cases usually only succeed once the court of public opinion has turned against the monopolist. If the public is still in favor or ambivalent, then you will not find the political will to successfully prosecute your case.
But once the company has abused their power enough to turn the public against them (arrogance in addition to greed), then the charges tend to stick.
My read is that there is no amount of lobbying that can be successful once the pitchforks have come out. But it could also be how many whistleblowers you can hunt up. Once your brother is giving you shit for working for the Evil Empire, it's a lot easier to get up the courage to be a witness.
They put the generics right next to the original products, and then charge the original seller for better shelf placement (as well as for various other things -- getting a product in a retail store requires a fair amount of payola in some form or another).
All of this adds up to basically the same thing: amazon copies a product and ranks it highly unless you pay for better placement.
You can say that this is bad, which sure, but it seems hard to make the argument that this is specifically illegal for amazon when it's widely practiced in the industry.
Alternatively: there's no trouble at all, Walmart/Safeway/etc are all clearly engaging in this anti-competitive practice and must be reigned in. Marketplaces need to be regulated as neutral grounds for sellers, the marketplace cannot double-dip and compete against sellers or engage in practices that reduce competition between marketplace businesses.
Generics and knock-offs are fine, it just needs to be done by independent sellers.
Practices like down-ranking sellers for offering better prices elsewhere is just blatantly violating any sense of neutrality, reducing competition among marketplaces and increasing prices for customers.
https://www.statista.com/statistics/274255/market-share-of-t...
The simplest pro-Amazon case is that they do not have monopoly power, because they are not a monopoly.
It's also odd that their retail business doesn't make any money if they're supposed to have market power.
They are like Kirkland of Costco most often.
It is one of the few brands on Amazon you can count on to not be Chinese crap. Even if it is made in China, the Amazon Basics products are generally good quality.
Technology, and in particular software, has greatly outpaced the definition of monopolistic power. Amazon and all the other large tech companies wield so much power it is scary. And they can literally just buy into any market they please with hardly any push back.
To not be sure how someone can make either case, without being familiar with antitrust law and framing the discussion in terms of it, is only to be expected.
I came to HN hoping to see some legal analysis, but I guess that's not what HN is for. You can get good technical discussion of technology, but when it comes to legal technical stuff it's just ideology and people talking about how they think things should be. What's HN for lawyers?
They don't hide the original products in a darkened corner of the back room where no customer can see them. They don't shove their generic into your hand every time you reach for a name brand. Amazon can hide the real products from search, or push it to the bottom of results, while putting their own products at the top of search results even when you search for the brand by name.
The least of which is selling end cap space (most walking traffic) to the highest bidder, meaning a lot of junk food and impulsive-purchase products are put in the highest traffic places.
At least on Amazon it's marked as a sponsored result. Even if most people click the first result anyway.
Both Amazon and grocery stores can be in the wrong.
Staples (peanut butter, canned fruit, etc.) tend to have store brands, but grocery stores doesn't have a store brand version of the vast majority of popular products.
At a Costco, they'll often stop selling the brand name product if they introduce a "Kirkland Signature" version. Amazon doesn't take down competing products when they launch Amazon Basics versions.
Not really intending to defend Amazon, because they are indefensible, but by big corporate standards, I don't see how they are anywhere near as bad as Walmart. And nobody is trying to break Walmart up.
The legal difference underlying the lawsuit between this behavior by Amazon and the behavior you raise by those stores is not the behavior, but its context.
Amazon, the complaint alleges, has durable monopolies in two relevant markets which the behavior leverages and reinforces, making it a means of illegally maintaining a monopoly.
The other stores do not have monopolies, so the behavior is not part of a system of illegally maintaining a monopoly.
This is very similar to the kind of discussion that happened at the time of the Microsoft antitrusts suit about bundling software: one of the ways Microsoft illegally leveraged their Windows monopoly – in this case to monopolize other markets rather than to maintain the Windows monopoly, but same kind of issue – was bundling IE with Windows. People made all kinds of “well, how is this different than maker A bundling software X with software Y”, and mostly it wasn’t, except that maker A didn’t have and thus wasn’t leveraging a monopoly in the market of software X, so them bundling software Y with it wasn’t an issue.
This is false. The Kirkland Signature versions are just the white-label version of one of the brands that are sold in Costco. For example, the Kirkland batteries are white-labeled Duracells; the Duracells are frequently sold right next to the Kirkland ones. The KS coconut water is just white-labeled Vita Coco and is sold right next to the VC coconut water. The point of the white-label product is to segment the market: the higher price of the branded version will make it seem like a more premium product while cost-conscious customers will purchase the white-label brand. Either way, the manufacturer gets paid.
If amazon had real competition maybe they would not have raised seller fees so much, and would not have prevented sellers from allowing lower prices in other places. So a cases can be made that they are using their market share to drive up prices, not lower them. Costing the consumer more.
There's other issues besides cost, for example counterfeits. If they had real competition then maybe they'd have to do something about all the counterfeit products they sell, which hurts both buyers and sellers.
Just a couple examples. There are other ways that monopolies can impact markets.
I've had similar thoughts about facebook. We could have had much better social/messaging systems, but facebook bought the competition. We likely missed out on more variety and perhaps much better options. Consumers were harmed by these lost opportunities.
You would be getting the same products for cheaper, that's the point. Their "two days or less" hasn't been true for several years. "Prime" to me basically has become "sometime in the next week" and there's a massive warehouse within 30 miles of my house.
Well, the obvious way would be "Amazon is not a monopoly." It's blatantly anti-competitive but hasn't produced a competitor yet. And heck, they didn't even have to buy off the competition from Jet.com, Wal-Mart somehow inexplicably did that for them.
Amazon simply hasn’t got monopoly market share or even e commerce monopoly market share.
And btw all retailers copy products. Surely you’ve bought store brand corn flakes at some point for instance.
I don't have a POV on this particular case but it seems reasonable to assume that there are other (reasonable) people that have different values and judgements than you do. Just because these companies and CEOs have a lot of resources should not automatically kick in the "David v Goliath" instinct that most people have
I feel like Hacker News types see themselves as "temporarily embarrassed monopolists."
Meanwhile, we have over 100 years over antitrust history and precedent pointing the other way. Sometimes Big Govt does need to step in and set the market right, because raw unfettered capitalism lacking regulation will always destroy itself. (For the record, and to preempt some strawmen, I don't think raw, unfettered socialism is The Way either.)
I remember online retail before Amazon dominance. Return policies and return shipping was a real mess. Amazon actually greatly improved the customer service experience. It also changed some markets in ways that were undoubtedly pro-consumer.
It also has had a lot of negative impacts, as their model (including the free shipping concept) has made it practically impossible for small independent stores to compete in online sales.
Put another way, very few things are all bad or all good. A lot of internet commentary wants to magically keep the good and vaporize the bad, but it just doesn't work that way.
Tribal thinking is the worst. You added nothing of value to the conversation.
You're not allowed to complain.
I think that's a very American thing right now... politically too.
But downstream, there are lots of issues that arise if one can't expect some kind of balance in check-n-balances.
Apple for example copies apps and makes them available as default in iOS. Companies go bankrupt because of it, but it is not monopolistic.
Of course all these are because of the strict legal definitions we have. In spirit I agree with you.
That's according to a peculiar interpretation of anti-trust law.
“Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition.”
Amazon’s Antitrust Paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...
37.8% of online retail.
Walmart is #2 at 6.3%.
https://en.wikipedia.org/wiki/Monopoly
> The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with a decrease in social surplus.
> Product substitutability: Product substitution is the phenomenon where customers can choose one over another. This is the main way to distinguish a monopolistic competition market from a perfect competition market.
What's the point of "Customer Obsession" if it's secondary to "Amazon Obsession"? Doing what's best for the customer unless it isn't also what's best for Amazon is just doing what's best for Amazon.
[0] https://developers.google.com/search/updates/core-updates
[1] https://developers.google.com/search/updates/helpful-content...
I do think the FTC should be more direct about prosecuting the vertical integration of Amazon's marketplace, fulfillment, and delivery services.
https://www.insiderintelligence.com/content/amazon-walmart-s...
Then obviously you're also got direct-to-consumer via your own website, and lots of niche channels like Etsy, Wayfair, and so forth.
Amazon on the other hand, actively makes it difficult to search for other products, by not only promoting their own brands at the top, but filling up the rest of the results with sponsored items.
It's more akin to an endcap with highest bidder items, but then every few feet you walk down the cereal aisle, the shelves separate and move farther away so another endcap can slide into view, pushing the cheaper alternatives farther and farther down the aisle the further you walk.
Not to mention the scale of the problem as well, grocery stores are finite, and amazon nearly infinite, at least in terms of how much time it takes to search through everything.
Capitalism is one tool in the free market toolbox, and it works very well in many ways. One way this tool doesn't work well is that it leads to monopolies, which stifle competition, which hurts the people listed above.
We just need regulations to ensure that vertical companies are engaging in arms length transactions. If Walmart charges a company $10 per linear foot of shelf space on the third row, then they need to internally bill the generic brand division the same rate.
My knowledge of foil suggests there isn't anything Reynolds could to that would reduce quality that would still be good enough to ship.
You might argue that having generics on the shelves at all means that new small brands have to pay more for placement, but that's not the same thing as stealing product ideas and leaving no other option but the generic version of that thing on the shelves.
It's so blatantly obvious if you've ever done a side by side in things like lamps, backpacks etc and other super simple designs.
Want an HDMI cable? Here's an overpriced Monster cable. Oh, don't want to pay absurdly high prices? Save money by buying one that is only 300% more than it should be instead of 400%!
The nice thing about Amazon was that it broke this model. Suddenly you could buy Anker or (insert small third party here) at very reasonable prices.
Amazon destroying those competitors is doing some damage to this, though.
They won't need to even call. Most FBA product listing inventory can be received directly from the factory (so Amazon knows exactly where it's made) and they can just go to the factory and offer to do 10x the volume for the exact same item (at a much higher discount).
When a name brand has market power and charges a premium for a basic product, then another company entering the market and undercutting them is great for the consumer. We can make regulations to ensure that a distributor, advertiser, retailer and the product owner engage in arms length transactions but there’s nothing inherently wrong with a store brand offering products comparable to name brand at significantly reduced prices.
imo the problem is specifically generics branded and marketed by the marketplace. That's where a conflict of interest between the marketplace and sellers arises, which ultimately harms end-customers.
Amazon Private Brands (APB) typically buys from the same companies that make the random generics like "XOFUNBO" no-name brands. The issue is Amazon can use it's insider data to buy, brand, and market generics in-house, without paying the fees charged to sellers - achieving costs that 3p sellers fundamentally cannot compete with. Amazon's own corporate training highlights that sharing sales data with 3p sellers is illegal and anti-competitive, I don't know why APB should be seen as any different.
This is not even considering how sellers need to earn end-customer trust while Amazon can muscle coasting on their trust as the marketplace.
Marketplaces must be neutral ground for sellers, full stop. No seller can be given privileged access. Otherwise the market distorts to favor a seller and that ultimately harms the end-customers in the long-term by suppressing competition.
Too many economic opinions are still predicated on the idea that the free market is still working correctly, and that there are effective controls in place. The reality is that - at least in the US - the controls are broken, and have been for a decade or more.
But yes - it's a step up from YAYWOWND which is a company that probably didn't exist last week and almost certainly won't exist in a month when their product spontaneously combusts and you try and chase down damages or at least a refund... Still, I'm actually finding myself buying more and more name brand crap because at least that way I know there's a company I can reach out to when it breaks down.
Where are all the actually reputable brands hiding?
I don't know if they ever fixed this problem (they have changed suppliers before), but I try to avoid using products from Amazon or no-name Chinese companies that plug into the wall.
“That's absurd” is an inadequate rebuttal to pp. 39-71 of the complaint detailing the basis for the claim Amazon has durable market power in two relevant markers.
Anti-trust rules cover both, with a (often complex to apply, because of the kinds of facts that need to be analyzed, but relatively well-developed) concept of “monopoly” which ultimately boils down to whether or not substitution happens in practice rather than whether there is exactly one firm ina descriptive market. There's no need to “move away” from one to the other.
https://www.ftc.gov/advice-guidance/competition-guidance/gui...
What individual grocery firm has a monopoly of the degree that the FTC has identified for Amazon in the two relevant markets for this case over any market, what is that market, and where is the evidence for the claimed monopoly?
I'm using peculiar in the sense of “Particular; individual; special; appropriate.” Distinctive. This may be somewhat archaic. Not in the sense of odd or curious.
If dumping actually occurs then the government or competitors can sue and win under the current antitrust laws by showing that consumers are now paying more due to the dumping scheme. Lina Khan’s view militates for prospective suits - suits where no consumer harm has yet occurred.
> Additionally, the consumer harm test focuses on the consumer which is the ultimate class of people antitrust laws seek to protect. Antitrust laws don’t exist to protect markets, they exist to protect citizens.
Citizens stop being consumers when they exit the store. Then they go to work or run their business, whereupon Amazon harms them to the tune of thousands of dollars - all so they can save a penny when they put that "consumer" hat back on. This is ludicrous and self-defeating.
> Quantitative tests are seen as less able to be abused because some judge has a particular view/vibe
Of course, the choice of which quantitative test to use is totally objective too, right? /s
And I can't even recall visiting a major chain grocery store where this was not the case (at least not in the last 5 years).
Yes they do. I can shop at safeway and buy nothing buy safeway branch shit easily.
If Walmart, for instance, were to start creating Walmart-branded everything after in-store product trials by small companies, that'd be a concern.
David vs. Goliath was a story about overcoming subjugation and oppression. A lot of people have been very much put-upon by the metaphorical Goliath here in a number of ways. There are piss bottles available as evidence.
I worked in logistics (elsewhere) for a decade, and quit when conditions shifted to incentivize smoking meth and pissing in jugs. It's abusive and just fucking gross.
I assume you aren't pissing in jugs to save time for longer lunch breaks. Why not?
Nobody pisses in jugs unless they're forced to. The example only falls flat because Bezos escaped the gravity well in his dick-rocket and it's really fucking hard to hurl bottles of piss into space with a sling.
I've still never seen a brand new product show up in the store and become popular only to be pulled off the selves and replaced with only a generic version of that product. When I see examples of that happening, I'll accept that grocery stores are guilty of doing what amazon does.
I disagree that nobody would voluntarily choose to pee in a bottle in the context of driving a delivery vehicle. But I do agree that the behavior in the context of being in a building that has a bathroom is a sign that something is horribly wrong.
But you don't see Walmart creating store-brand knock-offs of every popular product on their shelves.
This isn't the FTC's complaint but search "How Amazon treats their workers" and see why large companies get attacked. Typically the only way you're going to become this large is by abusing people in some sort of way. Amazon abuses their workers, their sellers, etc. Meta abuses their users. Google abuses their users. Uber abuses their drivers.
I would love to see 20 Amazons where half have a decent quality of life for workers compared to 1 Amazon where it's just awful for everyone except maybe consumers (debatable), executives, and tech workers.
But go to /r/starbucks and you'll sometimes hear that a lot of small shops are worse, for various reasons.
Large companies attract certain classes of criticism not by being worse, but by being more visible. Unfortunately, this actively masks some of the wrongs that they actually do.
Likewise, quitting your job is extremely disruptive and carries risk of bankruptcy if you can't get on to another employer in time. It's not simply a matter of "switch to the best offer available".
Amazon has some shitty practices but I expect a lot of pushback in this lawsuit as a bunch of other companies see a target on their back for stuff they've been doing for longer than Amazon's been around.
"other companies" don't have the same market power here, or indeed engage in the same anticompetitive behavior, but again, that's all explained when you read the FTC complaint detailing the actual behaviors in question
That is, as well defined as some concerns are, this complaint actually throws out a ton of that and makes it even less clear.
> Biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality.
> Degrading the customer experience by replacing relevant, organic search results with paid advertisements
> Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. [...]
> Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
That said, I have specific doubts. For one, search has always been crap on Amazon. I could believe they tried some of these tricks, but I confess I have my doubts they would execute on them well.
For second, some of this is standard BS that retail has just accepted. That is, bringing on "experts" from in the retail industry would almost certainly bias you in some of these directions. The standard contracts that retail stores have pushed for a long time are such that they absolutely should be curtailed. They can be good tools for small companies, but it is clear that as companies get larger, they amplify power imbalances.
For delivery routes, there's no simple solution for bathroom access (unless you want to talk about installing some step up from a "bottle" in all the vans). Meaning a driver will inevitably have to choose to spend time not delivering packages to leave the van and use an indoor bathroom.
If you are talking about the workers at the fulfillment centers, I do agree that is indefensible. That human need should be entirely owned by the business. If it takes workers too long to walk to the bathroom, or if Amazon insists on using time with security lines and whatnot, that's entirely on Amazon.
(Also to each their own, but using the bathroom and eating lunch are definitely mutually exclusive activities for me)
if the FTC didn't know whether their rules applied, they wouldn't have been able to draft a complaint explaining how they do
penalizing suppliers for offering lower prices elsewhere, for example, is pretty clearly anticompetitive
If we are going to rebuild some of the surrounding rules such that these practices are illegal, I'm all for it. If it turns out that I'm wrong and they do manage to make the market healthier with a suit against Amazon, great.
This doesn't look strong in that direction, though. This reeks of populist appeal from folks that know it is a politically savvy move to bash Amazon.
the criticism of this latest case, however, reeks of corporate worship from folks that know that Amazon is in the wrong (as the complaint documents)
Albertsons owns: Acme Markets, Safeway, Haggen, Jewel-Osco, Kings, Pavilions, Plated, Randalls, Shaw's, Tom Thumb, United Supermarkets, and Vons
Kroger owns: Baker's, City Market, Dillons, Food 4 Less, Foods Co., Fred Meyer, Fry's, Gerbes, Harris Teeter, JayC, King Soopers, Kroger, Mariano's, Metro Market, Pay Less, Pick 'n Save, QFC, Ralphs, Ruler Foods, Smith's
And now Albertsons and Kroger are merging together into one gigantic holy-shit mega corp.
Well, they want to, but its quite likely that the FTC will prevent or force major changes to that.
Its also quite likely that the big grocery merger won't happen as planned for that reason.
The only place where Amazon is even near 50% is in consumer electronics and office supplies.
The eCommerce market as such has a very long tail and a lot of competitive players just behind Wal-Mart.
From the link:
> The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.
The complaint says:
> Amazon uses a set of anti-discounting tactics to prevent rivals from 24 growing by offering lower prices,
But Amazon's contracts with big sellers specifically state that it may only discount when competitors first lower prices, making it in effect a price follower.
It goes on to say:
> Amazon deploys a sophisticated surveillance network of web crawlers that constantly monitor the internet, searching for discounts that might threaten Amazon’s empire. When Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same product on Amazon, Amazon punishes that seller
Which belies the fact that when you sell on Amazon you agree not to offer lower prices in other places. This is simply Amazon enforce one end of the two way part of the contract. Amazon agrees not to unilaterally slash your prices and you agree not to discount behind their backs. But you aren't as an eCommerce seller obligated to do business with Amazon, they don't have sufficient market share for that.
Furthermore, this statement is specifically false:
> By taming price cutters into price followers, Amazon freezes price competition 11 and deprives American shoppers of lower prices
Amazon is the price follower. If Wal-Mart offers a discount, so will Amazon. If B&H Photo discounts a camera, so will Amazon. The FTC is using sleight of hand here.
I just don't find their arguments here to be very compelling. I'm not against monopoly enforcement, but I just don't see how Amazon actually has the pricing power they're claiming.
Then there is Target/Home Depot/Lowes/Staples/Costco/Best Buy/etc
The lawsuit that is the subject here details Amazon's durable monopoly power in two markets.
But, yes, if Amazon did not have a monopoly, it could not, obviously, be illegally maintaining a monopoly.
[0] https://storage.courtlistener.com/recap/gov.uscourts.wawd.32...
Given that there are things such as Walmart.com, eBay, Shopify, and many hundreds of other online commerce stores, they are self-evidently not a monopoly. In fact, they don't even have a majority share of eCommerce in the US.
And they also don't have majority share in cloud services.
Nor do they have a monopoly in eBooks.
I did not say they don't have monopoly power, I said, they are not a monopoly.
(Other than obvious things such as "Amazon products"..., in which case every manufacturer or retailer is a monopoly in their own products.)
You can disagree there, but realize our disagreement here isn't that Amazon is a good company. It is on the strength of this case. It really feels like one that is being brought more for optics than otherwise.
I say this as someone that thought they should have had a strong case against Microsoft buying Activision. And yet, just look how that went. Maybe I'm wrong. Shouldn't take too long for us to find out, all told. I remember the stories of what Walmart did and still does in retail, though. It is obscene to see how that has played out in time.
You can disagree, and that's fine, I'm not saying your personal disagreement specifically is support for Amazon, it's just that's the optics of the individuals disagreeing with the case the FTC presented here, for a lot of us, seem to be corporate/capitalism worship and/or personal disagreement with the existing rules and laws against anticompetitive behavior that Amazon clearly violated here (as detailed in the complaint)
So, we'll see. Hopefully quickly.
The way this argument is normally presented is somewhat intentionally obtuse. Obviously Nike has a monopoly on Nike shoes, but "Nike shoes" isn't any kind of sensible market definition because you go to a shoe store and there are a dozen brands of shoes that are all pretty fungible with each other.
But then you get into something like "GM-compatible brake pads" and that is a sensible market definition, because if you have a GM car and you need new brake pads, they need to be compatible with your car. But you'll also notice that this isn't the same thing as GM-brand brake pads. You could get GM-compatible brake pads from a variety of OEMs that are all compatible with your GM vehicle.
Or, it could be the case that only GM makes GM-compatible brake pads. In which case they would have a monopoly in that market. Not because it's a monopoly on their brand of brake pads, but because it's a monopoly on any brand of brake pads compatible with that brand of cars -- which is something else entirely.
Notice that they don't even have to be the same company. If you have a Studebaker, the Studebaker Corporation is no more, and you may have trouble finding parts. It may even be the case that some independent third party has a monopoly on some such parts, even though it's a monopoly on parts for one specific brand of car.
> Notice that they don’t even have to be the same company.
As a specific example (and note, that you also don’t have to be the literal sole supplier to have a legal monopoly under US antitrust law), the market Microsoft was found to have monopolized in their big antitrust case was the market for operating systems for IBM-compatible personal computers.
That is not the applicable definition for US antitrust law.
https://www.ftc.gov/advice-guidance/competition-guidance/gui...
I think it's sufficient that I'm able to tear apart the section of the complaint that has bearing on something I have direct knowledge about.
Maybe other sections have merit, but the pricing part does not.
https://www.axios.com/local/seattle/2023/04/24/seattle-favor...
These figures seem to be for the Seattle metro rather than the city itself. Costco might be a competitor in some sense but it doesn't serve the area I live -- the nearest one is a 45 minute drive away. WinCos are even further away -- they serve some of the suburbs, but not the city of Seattle. Ditto Walmart. I've never heard of or seen Campeon. Whole Foods / PCC exist, but are expensive. Trader Joe's is fine but not really a full grocery store.
I'd love to see a longer take, though, addressing the specific points in the complaint, and what makes you think each one is weak. It sucks that most of the opposition I've seen is along the lines of "if Amazon isn't allowed to engage in anticompetitive behavior, the FTC is coming for your mom and pop shop next"/"where's the line???" and similar FUD (with a fair measure of "they don't own 100% of the market so it's not a monopoly so it's not anticompetitive" thrown in, too)
Paragraph 1, almost literally: "the early days of the internet were great for competition..." I, uh, don't know what to tell you here. Isn't even really a point.
Paragraph 2: Amazon is big.
Paragraph 3: Amazon is a monopolist.
4: Amazon's fees can be upwards of half the costs of sellers.
This point, finally, could be something. The examples that have been made public, though, are for sellers that are basically drop ship sellers. I'd love to see better evidence here.
5: Amazon also sucks.
I mean, this is kinda the core of my main counter point. Amazon is losing on its own terms. And if it doesn't get its shit together, it will lose soon.
That said, I do think this point muddies my view by discussing the old "relevant, organic searches." All of search has gotten bad. And Amazon's was never good.
6: Amazon sucks, but is getting away with it.
Ok...
7: Amazon doesn't enter agreements where people can undercut them directly in costs... Or something?
Sadly, I've run out of steam rather quickly on this. The claim here seems to be that Amazon enters all of the same agreements that other retailers do. With similarly bad results happening. I'd be delighted to find that general ruleset changed. I fail to see how this is even pretending to move in that direction.
8: We want to be clear it isn't just that Amazon is big. It is the practices they use.
This is the real kicker in all of this. The main practices they keep calling out are not unique to anyone in retail. Please make them illegal, but don't pretend going after Big Tech isn't an optics thing.
Skimming the rest: I'm now officially out of steam. What paragraph do you feel is actually strong? There is some neat analysis of the buy box... but it isn't that neat, all told. Amazon was silly proud of their 1-click nonsense for a long time. And it is probably a safe wager that, sure, most people don't make it to page 2 of searches; but also most searches don't result in a sale.
I'd almost be willing to take the price harm to consumers as a strong point, but Amazon has NEVER been price competitive for basically anything. It has always been cheaper to buy something somewhere else. This hasn't been a secret for anyone for a long time. It just wasn't egregiously more expensive for Amazon, and their pro consumer return policies made for a loyal customer base.
Again, don't take my criticism of FTC here as praise for Amazon. I don't vilify them as much as many do, but I do think they have been doing some hilariously non-forced screwups lately. This is still a pretty shit case.
I would have just gone on the allegations, but they are only done as assertions by design, and you would have to reference back to the paragraphs heavily. (I suppose the 17 allegations from the states could stand on the basis of the other allegations, but that is somewhat circular.)
The points regarding the search getting worse could be promising, maybe. However, I remember all the way back in 2014 that search at Amazon was already laughably bad. And search has been getting worse for everyone, not just Amazon.
The points regarding the buy box show a lack of any consideration to how retail generally works. There is a reason "top shelf" is a thing, and why the top shelf items are both more expensive, and likely sell more.
Preferred seller agreements and best pricing clauses are the norm in retail. By all means, lets get rid of them.
Claims that Amazon has declined in service while raising prices are interesting, but also kind of against the points in question. The services do seem to be declining. And competition outside of Amazon's own site have gotten better. The evidence that they are preventing newcomers feels weak when I consider that I do buy more from non-Amazon today than I bought at all online back in the early days of the internet.
Ironically, there would be a strong case here if only talking about books. But this seems to be specifically excluding books and digital.
So, again, what are the strong points?
Your excuses of "so and so did it too" are meaningless, as are any slippery slope fallacies, as are your personal anecdotes and observations (the latter of which, no fault to you, simply can't be trusted anyways, as my own observations are the opposite). The only relevant questions are whether Amazon did it (they did) and whether it fosters competition vs. stifling it (seems like the latter).
So, again, go ahead and try to honestly list the behaviors like the one above, and explain how either Amazon didn't engage in that behavior, or how the behaviors fostered competition vs. stifling it. Otherwise, it seems like more of the "where's the line???" FUD I mentioned earlier.
They claim that search is getting worse on Amazon. And that the old "organic search results" are worse now. I agree it is getting worse. I disagree that it was ever good. Largely the problem is one of volume there.
They have claims that some algorithms push sellers down. I actually am interested in seeing that explored more. My gut is that it is just poor execution from Amazon. Not from incompetence or malice, mind; but it is a stupid hard problem that nobody is executing on well.
My "excuse" of the favored vendor clauses existing is, I confess, largely sour grapes that that is allowed at all. It really screwed over a lot of small companies that tried to partner with Walmart back in the day. If that goes away, I'll be delighted.
But the entire study of the buy box is questionable. Amazon has long done everything they can to get it to "1-click" so that you buy. They famously had a patent on that nonsense. Yes, it makes a big difference on purchases and such. No, it probably is not being "weaponized" against some sellers. The entire dream of Amazon there is to get a sale from a web view. They have almost certainly tried all they can to take whatever step they can to increase that. As such, it is a very volatile place to be located and it will take effort to keep a vendor there. Pretty much period.
Can they show that losing a preferred location will lead to reduced sales for a vendor? I'd be shocked if they couldn't. The question there is why did Amazon do it? If they did it as retaliation to a vendor, that is BS and they deserve to get fined. If it was just them doing what they can to convert more sales? I'm less clear what to do there. If we want better rules around that sort of thing, I'm all for that.
I don't actually know that I can stay on this discussion much more. You haven't really offered anything other than "I disagree." And, that is perfectly fine. I am hoping to see some points that strengthen the case, though.
I disagree with this disagreement, and can see it getting worse, and given it seems the search was intentionally punishing sellers for anticompetitive reasons, I'd be interested in seeing if Amazon can present a convincing explanation otherwise.
> They have claims that some algorithms push sellers down. I actually am interested in seeing that explored more.
That does indeed seem like anticompetitive behavior, I'll wait to see if Amazon has a convincing explanation for it that fosters competition vs. stifling it.
> My "excuse" of the favored vendor clauses existing is, I confess, largely sour grapes that that is allowed at all.
Turns out, it isn't in this case (hence the suit). Makes sense, this also seems anticompetitive. I'd be interested in seeing if Amazon has a convincing explanation for how this fosters competition, vs stifling it.
> Can they show that losing a preferred location will lead to reduced sales for a vendor? I'd be shocked if they couldn't. The question there is why did Amazon do it?... If we want better rules around that sort of thing, I'm all for that.
The answer is explained in the complaint. I'd be interested to see if Amazon has a convincing explanation for how this fosters competition vs. stifling it. And as for the rules, turns out we don't need "better" ones, as the existing ones seem to be enough (hence the suit).
And note that I am making no real defense of Amazon here. It is frustrating to me that searching "PS5 controller" is largely results that I would not at all feel comfortable buying, at this point. What searches do you remember, "back in the early days" that were good?
And, really any search will reveal the actual "difficulty" here is that there is just too many hits. But can you really call out any of those as bad as long as you allow outside vendors? I'm not convinced. I don't want to buy from UPPERCASE vendor anymore than many folks do, but I see my purchase history has a ton of them.
So, again, this is a criticism of the case. They do pick apart many things that seem to have gotten worse. They rest a lot of their case on observations that Amazon themselves were chasing. Largely that the buybox is a huge driver of purchases. What they leave off is all of the behind the scenes that goes into that buybox. Most of it, unsurprisingly, is going to be based on costs to Amazon. This case is looking for twirling mustache villains looking to rob small vendors. But it is against a backdrop of an unusually large number of vendors that are all continuing to make money. In a field where Amazon is trying to optimize shipping and warehousing costs. Is it getting harder for people to do so there? Almost certainly. Is Amazon specifically retaliating against sellers? Maybe, but my gut is not likely.
I do appreciate the counter view that this is, in fact, a strong case. I have not seen evidence that convinces me of that. You keep saying it is "in the case," but that is our disagreement. The case is largely discussing the difficulties of being an FBA seller. One that many successful FBA sellers would be more than happy to tell you about. They have basically no evidence of Amazon intentionally mistreating any particular seller.
They have a lot of redacted comments about Amazon's analysis of their platform. But no hints that Amazon intentionally pushes sellers down. They have tons of details that having enticing offers at the top and in the buybox would be good for Amazon. Nothing hinting that they are trying to make it harder for any particular seller.
Even the anecdotes you will find online is that managing FBA is a full time job. Try managing a booth at your local farmers market. Just managing the booth is itself a job that you should probably look into getting specialized help for. This is no different.
I guess we will see if Amazon manages to put forth any convincing defense of their actions, like penalizing sellers for selling cheaper elsewhere. That just doesn't seem to me like it fosters competition. And the idea that this conveniently happens totally by accident to the sellers who do so, seems ridiculously unconvincing. If your "bad search" conveniently happens to have the same effects as an anticompetitive business practice, I don't see that pretext standing up in court.
Specifically, most of the quotes from Amazon seemed to be analysis they were doing about the same points. X% of purchases happen in the buybox. Y% of purchasers don't make it to page 2. In both of these, it is easy to imagine that Amazon was doing what they can to increase those numbers. They would not be doing things to reduce purchases, which is largely implied by the malicious implications. (Indeed, most of that is the internet learning about "below the fold" which has been well known in retail for a long time.)
Stated differently, to counter your point, Amazon only needs to show that it is selling more from more sellers to claim that they are driving more competition and fostering competition. That is almost certainly going to be an easy thing for them to prove. They aren't punishing sellers by pushing them to page 2. They are increasing sales by getting more likely purchases onto page 1.
Do I think this is healthy? Not really. That more low quality things make page 1 is frustrating to me and feels unhealthy. Is it frustrating that Amazon can probably increase sales of a low quality thing by putting the Amazon Basics label on it? Yeah, it is. Question is if that is stealing more sales from sellers than the other low quality items are already stealing. (It also begs the question that the Basics label is low quality.)
are they, though?
I'm not convinced that it's a total coincidence that sellers who sell for cheaper elsewhere are being penalized in search results, especially if the excuse is that a multi billion dollar company which relies upon search can't do search.
And honestly, that seems anticompetitive to me, thus wrong and illegal, thus the suit.
> They would not be doing things to reduce purchases
I haven't seen any evidence the anticompetitive behavior in question would reduce total income in the long term. They would be doing things to punish sellers for selling cheaper elsewhere though, and seems like they are. That doesn't necessarily mean reducing purchases though, especially if Amazon has already copied the product and started selling their copy themselves. And whether it reduced some purchases (but not others) for Amazon is irrelevant, as they could easily be willing to threaten taking a tiny hit to punish competitors.
You keep coming up with pretexts for the anticompetitive behavior, but they simply aren't a more convincing explanation than anticompetitive behavior. It's like saying you didn't stab a guy, he just ran into your knife 100 times. Maybe technically possible, but not convincing, and definitely not more likely than maliciousness. If it walks like a duck, etc.
If they aren't reducing sales/income in the long term, then that is also a defense to "not fostering competition." If they are literally selling more, this is easy to frame in a way that shows more competition. And again makes the case a bit weaker to prove that they were hurting what has been growing on their platform.
If you think they will be able to prove this, great. The plausible defenses here are just overwhelmingly against it. The criticism of Amazon going to crap is that Amazon is turning into a Dollar store, as far as quality goes. And, yeah, it is. Is why you don't have people making a killing as suppliers to Dollar stores...
It seems unlikely to me that they will be able to do so, especially with weak pretexts like "we aren't effectively punishing sellers who sell cheaper elsewhere, we're just rewarding those who don't", given how damning the anticompetitive behaviors in question are.
If you think they will be able to, great. The plausible interpretations of what we see are just going overwhelmingly against it.
> if they aren't reducing sales/income in the long term, then that is also a defense to "not fostering competition."
Definitely not. I don't see at all how that fosters competition to Amazon's marketplace. Especially since it seems Amazon is punishing sellers for selling cheaper in Amazon's competitors' marketplaces, which is, again, an anticompetitive business practice. Indeed, Amazon's sales here are irrelevant, because both a successful and a failing company can engage in anticompetitive business practices.
What evidence have we been given that they punished folks? There is evidence that it is punishing to be lower in the search results. But this is the same for any leaderboard mentality. Am I punished by having more people ahead of me when I join a peloton race that is live with 2k+ people? Or am I just more likely to be on a class with competitive people when I join it live?
So, reframe your complaint. They don't have to show it isn't punishing to be lower in the ranks. They have to show that they didn't purposely drop someone in the ranks for punishment. Competition is, by definition, fierce. You expect most competitors to lose when the contest is "be top 5 of N", the more so as N increases.
Oddly, bike racing is a good one here. I bet early adopters of Peloton and the like found earlier races much easier than they do later ones. They can blame cheating, of course. And we should do what we can to eliminate cheating. But, at large, more competitors leads to fiercer contests and more losses. Pretty much period.
> What evidence have we been given that they punished folks?
What evidence do we have that the ones who listed cheaper elsewhere happened to suddenly be "unable to compete" in the same environment without any action by Amazon? Seems like a convenient coincidence. An unconvincingly convenient one.
We'll see what more comes out as far as communication goes, but more importantly, as far as disparate impact goes: given the data we'll receive as a result of this suit, we'll be able to tell statistically if there was any difference in treatment for sellers who sold cheaper elsewhere vs. not, regardless of pretext (suddenly becoming "unable to compete")
>at large, more competitors leads to fiercer contests and more losses. Pretty much period.
Perhaps. Amazon is fighting competition by engaging in anticompetitive business practices, and they're still around. Maybe there's something to that. If we want more competition to Amazon, then, that means we need Amazon to stop engaging in anticompetitive business practices.
Competition is fierce, worse when your marketplace is engaging in anticompetitive business practices.
As for evidence that those that listed cheaper elsewhere would see lower ranking here, I only need to point at what is largely merchants arbitrage for so many items on Amazon today. By and large, if you see an ALL CAPS seller, know that you can get that exact item cheaper on another site. (Honestly, by and large, know that Amazon is never the cheapest option. Never really claimed to be.)
For maximum amusement, I've personally seen Walmart boxes from some sellers that were evidently taking advantage of a local sale to make some money online. (Not just 1-2 dollars, mind. Beginning of covid had people stocking up on trampolines and whatnot to resell online. You could easily flip some of those for 100% markup in that market.)
Hopefully this whole suit doesn't take years. Would love to see a prediction market on it. :D
A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range.
The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change.
Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead in the water most of us have had to commit 100% to FBA to be able to stay afloat.
With the increase in inflation and Amazon abusing its power to significantly raise its prices for FBA and force us to use its advertising services our revenues have been severely impacted.
This doesn’t include their unwillingness to meaningfully fight counterfeits
Or that they penalize you if you attempt to drive sales elsewhere with lower pricing on other sites
Bloomberg did a write up on this a few months back:
https://www.bloomberg.com/news/articles/2023-02-13/amazon-am...
"Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead."
I have a hard time sympathizing here. They farm out manufacturing to China and logistics/warehousing to Amazon, and then also lend brand to a marketplace they don't own. Assuming this is how FBA selling works on Amazon, it sounds like the low profits they make are just a byproduct of them not actually doing much work.
This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+. Like you say, I don't value the businesses that simply re-sell re-labeled products without ever interacting with anything very much. But let's not confuse the 'spam' of the problem with the squashing of actual business that this is historically known to cause.
But complaining that you need to use Amazon's warehouses to be part of Prime? That's rather obvious! You can always sell as non-Prime. Many do and are successful at it!
Basically, Amazon allowed many businesses to exist by creating a very convenient way to sell. Chances are a lot of businesses selling on Prime who are complaining would not have been able to exist at all.
(Source: I'm a former FBA seller).
If they are using a design from the manufacturer, I have no sympathy for them. They are just trying to make money by adding some marketing and connecting dots together.
Is there such a rule for fulfillment and delivery?
Of course, 56% seems monstrously high to me, but then again, so did 5x BOM cost before I had that explained.
- Firstly, not every Amazon seller is a drop shipper, or private label products. In fact most of the successful ones I know all design and brand their own unique products. We ourselves design everything in-house and own multiple design and utility patents on ALL of our products, you won't find these products on Alibaba. Yes, we manufacture in China, but it is really cost prohibitive and uncompetitive to do so almost anywhere else.
- Yes, Amazon's policies hurt us and is completely unethical. The biggest one being losing the "buy box" (ability for customer to buy from your brand) when a lower priced product from your brand is found on a competing website such as Target, Walmart, Shopify, etc. They essentially force you to have the best price possible on Amazon at all times or get severely punished. Why this is terrible... let me explain, let's say Walmart stores offer your product as a holiday sale item in their stores, or let's say a particular color variation of your product isn't doing well so they offer it as a clearance item. Now someone can buy that product at a discount, sell it back on a Target or Walmart online marketplace at a slightly lower price and guess what, your Amazon listing is now practically worthless. You lose the "buy box" and all your sales because another site has it listed for cheaper. This happens ALL THE TIME. And sometimes, there's almost nothing you can do about it.
- They practically force you to use Prime fulfillment. Technically you don't HAVE to use it, all you have to do is again, be uncompetitive with products that do offer Prime and lose half your sales. Same with Marketing, PPC, adwords, etc. They've created an ecosystem where all of these options aren't really options because there's no way to compete otherwise.
- Amazon basics and Amazon using private sales data to find out which products sell the best and compete with those brands directly. It's just really evil. They have all the info, all the data, and they know exactly which products to target to offer a cheaper version at a discounted price and steal all the sales...
I'll be the first to say that I owe Amazon a lot for allowing small businesses the opportunity to be making millions. But at the same time, some of the criticisms are valid, and with a few changes, the platform could be truly great for small business owners.
What you don't seem to understand is that they "let" Amazon handle warehousing and logistics because Amazon has in many ways forced this.
It seems like he's expecting some sort of crazy margins selling a commodity.
You miss the key distinction. The former part of that equation is competitive, the latter part isn't. A guy who sells firepits can't be expected to create a competitor to Amazon. Amazon has complete monopolistic pricing power. Whenever a company is in that position, they will abuse it.
Say what you will about their means of getting it, but this person did 100% of the leg work of getting that sale. That sale doesn't exists without them.
And Amazon gets the MAJORITY of the revenue cut for that?
I sympathize with the idea that China should get more of that, but make no mistake: Amazon's logistics and warehousing were not an option here. They were the cost of doing business. And Amazon took more for that service than this person who actually made that market happen.
It's nothing like listing on eBay where there's some haircut off the top and that's that.
There are fees for - accepting inventory, holding inventory, returning unsold inventory, shipping sales, processing returns, destroying returns, transaction fees, ads to promote your listings in market, and probably 5 other things I forget. Depending on the fee it is - fixed, % of $, weight based, volume based, or some combination.
The fees change constantly with not much notice. So every time you think you've got just the right size/weight/price balance you get screwed. And where else are you going to go?
Like Uber drivers, I imagine some % of FBA sellers don't know they are losing money in real time. You need to do some decent accounting to track as all these different fees hit at different times. It's not like Amazon gives you the data & tools to track your all-in costs per sale.
> So every time you think you've got just the right size/weight/price balance you get screwed. And where else are you going to go?
You've skirted around the obvious question: Why did you pick FBA to begin with? Amazon sellers existed long before FBA. They did their own shipping, so almost none of those fees apply. Many sellers continue to do well on the Amazon platform while not being part of FBA.
If you can't succeed without participating in FBA, then all that's happened is Amazon created an environment for previously unviable businesses to succeed, and has merely tightened it.
Edit: Amusing that this comment is being downvoted, whereas my other comment saying pretty much the same thing is being upvoted.
Have you ever run a business where you have to manage your own inventory? What you listed and likely the 5 things you omitted constitute real work. Perhaps amazon's fees are capricious but they're doing all the work for you. You can manage your own inventory and shipping logistics and still sell on Amazon
Whats different is that the fulfillment centers then couldn't see our books and weren't looking over our shoulder seeing our accounting figures, so as to grab the profits the moment it crossed the threshold of feasiblility.
Uber was easy and profitable in the beginning and clearly a superior value to car services and cabs. Many drivers took on debt to buy bigger better cars, never imagining the goalposts were adjustable by design so as to centralize all the profits.
FBA is Fulfillment by Amazon, where you sell things on Amazon and they handle payments and shipping to customers.
normally they'd need to pay for storage, stock, liquidation of stock they didn't sell, returns etc
and instead now you pay for all of that for them
and what do you get in return?
- a listing on page 17 of their ever increasingly shitty website behind legions of MINFARTO, PATRONICS and GIBRANKER aliexpress garbage
- customer service staff with an inability to understand simple english or basic problems
- your genuine stock mixed with counterfeits, that then they penalise you for
- paying to give your sales information to them as a potential competitor, as if you do well they'll ripoff your product
not a good deal at all
In 2016, they collected 35.2%. In 2022, they collected 51.8% in fee.
That's insane.
A neighbor of mine who makes high end silver jewelry was doing fine with the gallery he used (in Santa Fe). The gallery collected about 30% of his sales price in fees.
Another gallery approached him, asked to represent him instead. They took 50% in fees. He switched anyway.
His income went up (and stayed up). Presumably the new gallery provides some combination of better environs, more and/or different customers, better salespeople.
It still seems wrong that fees could be this high, for a jewelry gallery or for amzn. But it shouldn't be assumed that the high fees necessarily mean reduced income for the original seller.
Back in the 80's, my company sold compilers through third party mail order houses. They all demanded providing the product to them at 50% of their selling price.
It's what having somebody else advertise, collect orders, process payments, ship, and deal with returns is always going to cost you.
If it's unacceptable to your business, sell directly. My company did both.
It's interesting, Amazon also put a lot of mom and pop businesses out of business during this time period as well. The overhead that used to go to local commercial property owners, independent trucking and warehousing companies and such now all goes to Amazon. It's a total monopoly in the old school robber barron sense. Not only do they own the railroad they also own the steel plant and the coal mine.
Break 'em up like Bell I say!
Amazon controls the connection to the customer.
Walmart/Family Dollar control pricing.
Stamps.com controls independent shipping/stamps.
Stripe and the major card companies take a chunk of fees for credit card transactions.
Can you explain this further?
> The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change.
you either wouldn’t have a business at all without FBA, or you’d have higher margins with the same net earnings.
if you don’t like FBA try advertising on facebook. it’s very expensive because it’s very effective. the cost of the ad is so great that socks have to cost $20 and t shirts made in china have to cost $30.
i used to buy from marketplace on amazon. but dealing direct with sellers is worse than the ebay gamble. so i only buy FBA. i prefer direct sale from amazon if possible. the price is always higher but i have guaranteed no hassle.
otherwise i shop local.
i don’t know about dirty tricks but from my POV amazon earned their market by having consistent and reliable customer service. if you want to increase your sales it’s worth it to ride on _their_ brand. $250k to $5m for a mom and pop drop shipper sounds absolutely fantastic to me.
I don't merely say this as a "fuck Amazon" reflex or a "fuck capitalism" reflex. I say it because it obviously would allow so much of the dying segment of mom and pop small business to become viable again. Just from a policy perspective it's a home run because it's a way to juice GDP, improve consumer purchasing power, AND reduce income inequality.
As a matter of fact I would suggest that Amazon as it exists is anti-capitalist. It is feudal. Capitalism is the deployment of capital and assumption of risk in pursuit of new value creating activity. Amazon is not marshalling new capital to innovate or improve its digital marketplace. Rather, Amazon simply owns digital real estate and extracts rent, like some kind of futuristic dystopian corpo-baron.
The best part of all this is that Amazon doesn't have to be forcibly nationalized or broken up or anything like that. The government just needs to support and endorse a good alternative, because Amazon seriously sucks.
> Amazon is not marshalling new capital to innovate or improve its digital marketplace. Rather, Amazon simply owns digital real estate and extracts rent, like some kind of futuristic dystopian corpo-baron.
What on earth are you on about? They own a url.
if the market was working correctly Amazon's profits would be driven down to zero and you'd effectively have this
> As a matter of fact I would suggest that Amazon as it exists is anti-capitalist. It is feudal.
absolutely
* Project Nessie is an algorithmic pricing system
* "Amazon's Project Nessie has already extracted over [redacted] from American households."
* "this scheme belies its public claim that it “seek[s] to be Earth’s most customer-centric company,”"
* It's related to Section VI.A.3 (Amazon maintains its monopolies by suppressing price competition with its first-party anti-discounting algorithm)
Amazon themselves identify Nessie as the system that monitors spikes or trends [1], so my hunch is this is some sort of surge pricing system. Does anyone here know more?
[0] https://www.ftc.gov/system/files/ftc_gov/pdf/1910129AmazoneC...
[1] https://www.aboutamazon.com/news/amazon-offices/the-surprisi...
Amazon has implemented an algorithm for the express purpose of deterring other online stores from offering lower prices.
[redacted]
Rather than trying to compete, Amazon uses
[redacted]
Ultimately, this conduct is meant to deter rivals from attempting to compete on price altogether-competition that could bring lower prices to tens of millions of American households. As a result of this conduct, Amazon predicted, "prices will go up."Meanwhile, I have to order from direct sellers to be sure I will get a genuine, new product. So I don’t even get Amazon’s lower-but-still-higher-than-optimal price, but a yet higher one.
As far as I’m concerned the whole company’s a giant scam and I can’t believe it still hasn’t caught up with them. They benefit so very much from enabling bad actors, and have for so long clearly without any serious attempt to stop it, that I’ll do a happy dance the day they go under or get broken up. I just wish the eventual consequences could force Bezos to have to work for a living again, since he’s built his empire on fucking people weaker than him. Shouldn’t get to keep a penny of it.
I was doing FBM (fulfillment by merchant) because I like shipping my product directly from my place of business but I had to switch to FBA to get my sales to go up. They were already getting half but now Amazon is getting more than half of my revenue.
I also have my own site where I can sell for the same price and keep much more of the revenue, but most shoppers won’t buy if they didn’t find it on Amazon. If I leave Amazon or raise my Amazon price to recoup the costs or stop paying for FBA and Amazon ads, I lose almost all of my sales. This is all because Amazon is doing anticompetitive things with its monopoly power. Enforcement is needed. I don’t know what the injunctions will propose to do but I’m eager to find out.
What really kills me is knowing how my customers would feel if I told them how much of their purchase price is being kept by Amazon. They value my product enough to buy it for that price. The few who really understand Amazon always offer to buy it directly from me so I get to keep more of the money. If only everyone understood that.
I have to spend some more time and money optimizing my Amazon listings and then I will turn my focus onto my site and spend all my effort building my business to survive in spite of Amazon.
Literally in spite.
And this came out last time they were doing monopolistic inquiries against amazon. Yet...
So I'd love to see something positive come out of it, but I have my doubts.
- Online marketplace
- Consumer products
- Internet infrastructure
- Delivery logistics
(Edit: format)
We don't have a surplus of regulation in the US (contrary to what Republicans who want to get rid of the EPA, FDA, etc would say). When we actually have laws that say things like, you can't union-bust, you can't defraud investors, you can't behave monopolistically--and there may be subtleties to those laws that most people don't understand--and companies go so far as to violate those laws, it's a very good thing when they face consequences.
User xattt says in a different thread on this story (https://news.ycombinator.com/item?id=37667379)
> I bet dollars-to-donuts that half of those folks don’t know how to articulate the sentimental attachment to their Prime subscription either.
It seems that applies up and down the population.
Where? All of the comments above yours are anti-Amazon.
Regardless of which “side” is “right,” I don’t think you can argue that HN has a blind pro-big-business slant.
(In my experience it's also the community that has the most anti-intellectualism/distrust of science as well, but that's a discussion for another time)
Notably: health insurers. They're an oligopoly whose revenues total something like 4% of US GDP. They engage in anticompetitive practices, and the end result is far more consumer harm than Amazon can do. (Because people generally spend a lot more on health insurance premiums than they do on Amazon in a year.)
Similar could be written about e.g. airlines.
Lobbying works. Tech will eventually figure this out.
Obviously a firm that massive can’t be all bad. As a consumer, the only thing I have is choice in how I spend my time and resources based on the information I have.
“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.”
Public perception isn’t their motive, I’m just cheering for it. Moreover I’m glad that antitrust enforcement has ramped up of late. I wish it had started sooner, I believe we would have a healthier internet ecosystem if that was the case.
Right now FTC going after low hanging fruit. But we all know Amazon will challenge it in court, appeal, appeal, appeal, pay the reduced fine, slow roll any changes, and business will continue as usual.
Break up the tech giants and each individual unit cannot survive as-is.
Edit: just saw that ihaveajob posted the same idea in another reply.
It sends a chill down my spine to see that one of the perks of being a Prime member is unlimited photo storage.
It’s sickening to realize there’s a bunch of Gullible Guses and Ginas that are holding off cancelling their Prime subscription because their pictures are held hostage by Amazon.
I bet dollars-to-donuts that half of those folks don’t know how to articulate the sentimental attachment to their Prime subscription either.
>Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
I feel like ultimately they are accused of violations because they are big. I don't think that's the worst thing. But as others have pointed out - their tactics are very similar to deals grocery stores and retailers make with suppliers all the time. The only difference seems to be that Amazon is big enough that suppliers can't legitimately threaten to take their business to another store - because there isn't one.
Their complaints that Amazon makes prices higher for products across the internet is clearly only true because they are so big.
I really don't mind their being a different set of rules if someone has the ability to dictate most of the market, but exclusive deals are routine for smaller players.
This is partially solved by Shopify for Shopify sites, and Apple Pay/Google Pay/PayPal for third parties, but it's still often more friction to go to a 3p store.
For a while my price got listed on the main book product page. Only briefly though. Then it disappeared, and another seller got the glory of the link for a "New" 3rd party seller, and their price was HIGHER than mine.
Amazon does not want to advertise your price if you are too low for their liking...
Suddenly, in July, my mom dies. I have to travel to the east coast for the funeral, etc., so I put a hold on the one and only item in my inventory -- my book. Effectively this takes me offline temporarily as an Amazon Seller which was fine.
BUT . . . when i get back home, I try to re-activate the account and find I cannot. INSTEAD, I get this notice from Amazon that my account is suspended, and that it's mandatory I go watch all these training videos about COUNTERFEIT products, how to spot them, why not to sell them, why it's illegal, etc, and that I do not have permission to sell counterfeit "Pantheon products." And I'm like, WTF? I'm selling the real deal, from Pantheon, and I AM THE EFFING AUTHOR AND THESE ARE MY OWN BOOKS.
I try to communicate with Amazon Seller Program and get nowhere (I think they deliberately hire only people who don't understand English). They refuse to explain anything about this absurd counterfeit stuff.
So I contact Pantheon. They just laugh. They had nothing to do with it, but weren't surprised -- they kind of hate Amazon.
THEN I get a new notice from Amazon that my account is disabled permanently due to lack of use.
WTF!?
So: here is my theory. They were pissed I had a super-low price, and when they saw me temporarily disable my inventory as I'd be away for a week for a funeral, they swept in and shut me down, with some kind of made-up lie about COUNTERFEIT (I mean, can you believe these guys!?). And nothing is resolved, and we're on the verge of October.
Amazon sucks.
- Shopify small store explosion
- Google search adding products DIRECTLY to the search engine results
- LLM vs Search Engine battle. Whoever controls the LLM controls the product listing.
- Temu & Shein exploding onto the scene. WSJ just had an article on this yesterday.
My real annoyance with the FTC is why they refuse to go after REAL monopolies that actually hurt consumers, such as Apple and their closed App Store.
I find this a funny comparison because Amazon and Apple are so similar in the business practices people complain about. Are you sure you're not just on the supplier side of Apple and the consumer side of Amazon?
What more does US govt want?
My family buys on Amazon a lot but I am well aware that I can buy any of that stuff, including at times for a lower price, elsewhere - from company website to Costco to Walmart market, via Google shopping, etc.
Doesn't the existence of these infinity choices make claims of monopoly a bit farfetched? I am sure it's more complicated than this, but... is it?
You haven’t? What sorts of products do u typically browse/shop for?
I'm no fan of Amazon, but that kind of makes sense - if they use another fulfillment service, Amazon wouldn't be able to guarantee next-day delivery for their products?
Consumers pay for Prime, and with it the 2 day shipping on eligible items, and so they prefer buying items with Prime eligibility. I must disagree with the "costly" description, as cost incurred shipping with Amazon and drastically lower than shipping with other services.
Having worked with dozens of businesses on establishing their Amazon account, there are very few that can move the volume needed to achieve the economies of scale necessary to match the costs of using FBA services.
Amazon still has decent things obviously. But if you're going to buy junk, atleast buy it straight from the source for pennies on the dollar.
Network effects have not been accounted for in antitrust. That’s the core of the problem. Not the fact that Amazon is tweaking algos. Every major player is doing that.
I like Jerry Chen’s piece on “The New Moats” (ahead of its time published in 2017) that calls out the progression of tech going from systems of engagement -> systems of record -> systems of intelligence. It feels like this is one (of many) consequences of that progression:
At some point, I had a complaint, refunded the customer completely, and they outright banned my account and held my money for 90 days (I got all of my money back after the 90 days). It completely wiped my business out and I never looked back.
I was banned to the point where if another seller was associated why my account at all, they were also banned. All of my calls went nowhere and I was pushed to automated responses.
12+ years later and I have my seller account back. Not like I'm ever going to sell anything on Amazon again.
Really, really hope this isn't another woke crusade by Lina "0-2" Khan that promises to delivery a random victory to "the common person" and then ultimately fail to do anything meaningful.
https://26043.mc.tritondigital.com/OMNY_SOUNDON_P/media-sess...
Everyone vies for control/power. Once you have control, you can exert pressure to get more from less (this is essentially what "bullying" is). There's nothing (but any laws set up to counteract this) stopping you, so you do it, because relative to you, there's only upside. Can you really blame these entities for taking advantage?
Literally, the thing we all want more of (success and control), will turn us into bullies. Veeeeery few people, or companies, get to that point and then continue to "play fair", at least completely. So we set up the system with rules we think will limit this, but it's not perfect, so rules get exploited.
In games (which are systems and sets of rules), one of the most fun things is to discover an "exploit". Sometimes this comes from a developer oversight, sometimes this comes from rule complexity leading to unexpected states, sometimes from bugs. I remember figuring out how to get an extra enchant on a weapon in Neverwinter Nights (I somehow got 1 past the supposed limit) and how fun that felt. But there was no cost to other people in doing this. (At worst, if I found too many exploits, the game would stop being fun due to not being challenging, and I would just "cheese" through it.)
Amazon is a bully that is cheesing its way through the rules, at some unknown but probably large success cost to many other people vying for the same control. Perhaps it's time to dismantle the bully dominating the schoolyard lunches.
Could you get together with a large bunch of other FBA folks and somehow fund an alternative?
I understand a bit about digital marketing, but not why this was so bad...
What was the "post-iOS change" and why did this make it difficult to go elsewhere?
Why is Facebook/Instagram/TikTok alternative dead in the water?
Amazon is a marketplace and provides exposure - in other words, they bring you traffic besides providing ecommerce functionality. Possibly a lot of traffic if there's not much competition already in your space.
With Shopify you have primarily an online store solution. It's up to you to do your own marketing somewhere to drive traffic. Shopify does have what they call "Shop" now, which works like a marketplace, but in my experience that's still a relatively small channel for Shopify sellers.
Amazon does a great job of making it appear that they are the best option to shop at. But they really aren't. Even with Prime Free Shipping, if you search eBay correctly - the prices are likely better there.
I know what some are probably thinking, eBay is full of scammers and knockoffs etc. That's not really accurate. Especially when you figure out how to use it correctly.
eBay policies are designed to protect the buyer. If the item doesn't arrive, you're getting a refund. Every. Single. Time. If you're unhappy with the item: tell the seller. Most will make it right for fear of negative feedback, and knowing they'll lose the INAD. INAD? If the seller wont fix it, file an Item Not As Described claim. You will win and they'll be forced to either refund you or accept a return.
What is the iOS change you’re referring to?
They were using the Amazon platform for what it was intended for, and Amazon made more millions off of them. It was supposed to be a mutually beneficial relationship.
Can you expand on what you think Amazon is doing wrong here?
When I buy products online, I almost exclusively buy them from Amazon because I've had too many bad experiences with other sites. That strikes me as a case of consumer choice, not anti-competitive practices.
I once purchased a Japanese candy pack from a supposedly-reputable website that was supposed to be a Christmas gift, but they didn't give me a tracking number and wouldn't refund it after a month of no delivery until I filed a chargeback.
By contrast, I've never had any trouble getting Amazon to honor their refund policy for "Prime" products, which is why I've stuck with them.
In my category Amazon takes 15% of every sale. That’s even true for FBM where Amazon never lays eyes or hands on the merchandise. Also still true even though I have always taken perfect care of every customer. Good luck selling anything on Amazon without paying even more for Amazon advertising, a closed system with high prices. And then there’s the Prime badge and FBA, more expenses that you can hardly afford not to pay. Buyers are trained to demand them and Amazon reaps the profits.
If you buy from my website I pay a small transaction fee, shipping, and advertising. I can afford to sell for much less, making my customers just as happy or better since I can personalize the service in ways Amazon just does not allow.
But I can’t lower my prices anywhere off Amazon because they will retaliate by burying my product where nobody will find it.
Amazon customers (I admit I am one, too) are paying higher prices for almost everything they buy. But they/we are also supporting a marketplace regime that forces prices up everywhere. Everyone, not just Amazon customers, gets to pay the higher Amazon price.
My website customers are essentially subsidizing the profits that Amazon is making from my sales on their platform.
You might think you want someone big and strong like Amazon protecting you from scammy sellers. If they wanted to do that they would get rid of them and keep the good ones. Instead they keep the bad ones around so you get to experience their protection racket. You’re sticking up for the bully and paying for the privilege.
(1) https://www.yalelawjournal.org/note/amazons-antitrust-parado...
Amusing trying to see people claiming the opposite.
The article has been discussed around here before:
Have you ever heard of the monkeys and ladder metaphor?
Things need to change. It's great to be skeptical, but not if you're not also optimistic at the same time.
Monopolies are bad for many reasons, not just because arbitrary "rules" or whatever you think is easily dismissed, but because of the opportunity costs that even the owner of the profits incurs. We're not talking about money or status or power, but actual meaningful change of the total composition of their culture & society and the world. They are literally preventing themselves from experiencing a world that gives them everything they can't have now and clamor and hurt themselves chasing after. It's the ultimate irony.
So yes, you should have hope. There is NOT a "good" reason for being a greedy parasite. People have just forgotten and/or been manipulated into believing in fake power. This false faith (fear) is literally what enables these fake leaders like Jeff Bozos the clown to succeed.
Please next time contribute more to the conversation than just whine.
It also makes it very easy for the bigger groups like AB Inbev to play games with distributors around pushing enough volume of their products if they want to get allocations of more in-demand bottles like Goose Island's Bourbon County Brand Stout.
I did not think I would ever see someone seriously arguing that the three-tier system for beer is a good thing for smaller players.
This is also why businesses are furiously and unanimously anti-union. Labor is their biggest cost and they get ahead if they can keep labor fragmented while they consolidate.
This seems like a bad example given how its arguably led to massive consolidation in beer
Reminds me of the weird law in a lot of states where breweries and distilleries can't use the same equipment or physical location - which pushes out smaller more varied players since you need capital in order to operate multiple locations.
Proof: worked as an SDE for AWS and Amazon for 7 yrs.
I wonder if there's a model where carriers cooperate on last-mile delivery. Maybe form company they all invest in that goes from regional hubs to homes. It can't be efficient to have 4+ carriers delivering to the same neighborhood.
This may have been true a decade ago, but today there is an entire microbrewery scene in the US where there are hundreds of them inside individual states. Better is subjective, sure, but any kind of beer you get in Germany you will find a few dozen US microbreweries making the same.
Does that mean brewpubs can't exist or just that they couldn't also sell the beer bottled?
But regarding Amazon, I agree.
For that one, it's mandated by publishers. There's nothing that can be done for e-readers from vendors that don't support third-party applications.
Amazon e-books are accessible on Android and other platforms in addition to Kindle devices.
Kindle is also not locked to only ebooks from Amazon, but third-party DRM schemes are not supported. Calibre for example comes with good tooling for that use case.
I believe the publishers want DRM. I'm not sure they want DRM that effectively locks in their readers to the Amazon ecosystem. I don't believe publishers would be upset if I could directly purchase books from Apple, Google, Kobo, or any other similar vendor directly on the Kindle.
Is the audiobook market different? I know Cory Doctorow for one would like to sell his audio books through Audible but they require DRM. Care to defend that?
We need to quit getting lost in the word, "monopoly". No part of this problem is from a single actor dominating the entire market. The problems are anti-competitive behavior and vertical integration.
DRM is literally intended to support copyright monopoly. The entire purpose and function of DRM is to prevent competition in the form of "copyright infringement".
At the Publisher's request, this title is being sold without
Digital Rights Management Software (DRM) applied.
They have a web based kindle app. They have apps for android, iphone, pc, mac and probably 10 other things I'm unaware of.
Amazon’s latest file format KFX hasn’t been entirely cracked and it’s possible it won’t ever be entirely cracked. The best anybody can do so far is to buy an older Kindle and download it to that in order to get a crackable version. The problem with that is you lose all of the typography improvements only available in KFX.
Tech is well aware of this, and is spending accordingly[1]. However I think politics are a bigger motivating factor, and taking "tech" to task is viewed as a good way to score points (probably helps that legacy media views tech as direct competitors, and covers them accordingly).
[1] https://www.cnbc.com/2023/01/23/apple-ramped-up-lobbying-spe...
Break all these companies up, before we find ourselves even deeper in a cyperpunk dystopia.
The whole thing is a worthless Alibaba ripoff now.
Nowadays, I'm fine buying consumables from Amazon if I need them asap, but for any name brand stuff I specifically want, I prefer purchasing elsewhere. If reviews were trustworthy, it'd be one thing, but with Amazon having turned into AliExpress, it's impossible to know whether any of the Chinese brands are actually trustworthy and of high quality.
IMO people buy cheap generic Chinese brands for the same reason they buy cheap dollar store products. They're gambling they can pay 30% the price for 90% of the function. Amazon reseller premium = they're paying slightly more for returns in case things break. They can save more buying from Ali resellers. Even more while temu subsidizing orders. The only people looking for quality are people who order from resalers of established PRC brands, i.e. Xiaomi. In the days before Amazon cracked down, you had brands like MPOW decide better marketting strategy was to give people gift cards for reviews and give no question asked replacements well outside of warranty period. Pretty win-win for consumers.
What's great about Amazon is that they kicked their competitors into gear and there are a lot of reputable vendors that offer cheap overnight shipping now. (B&H is my go to for electronics.)
If true, we have a name for this, its called fraud. Little people like you and me go to prison for it.
Yet, if you are big enough, the government can barely muster the strength to issue a fine. Rarely to executives at big firms go to jail unless there was something Enron sized egregious happening
Does Amazon retaliate and ban you permanently if you win?
I believe it’s, mostly, these unfair, monopolistic practices that made those companies giants because they can, technically, crush anyone willing to swim in their red ocean.
Normally, you could easily file a lawsuit against them and got them pay you 10x the damage they caused.
Manchurian commenter activated … proceeding to step 2 …
the other seller likely reported you as counterfeit, and Amazon believed them.
The FAANG corollary:
When you make it a point of pride to only hire the smartest, most elite engineers on the planet, presumption of stupidity no longer applies.
I’m not sure but I feel the need for some legislation to force large companies to provide human-to-human contact in the event of a dispute.
Even in the world of Brazil, the 1988 movie, there were humans somewhere in the mix.
Huge corporations do not get pissed. It's not personal. They were not angry or acting spiteful.
Note: I'm only addressing those three words, not any other points you made.
See:
* FTC: https://www.ftc.gov/legal-library/browse/cases-proceedings
Those aren't FTC issues regardless of merits, so they don't factor into FTC priorities. The first is mostly state insurance regulators, the second doesn't seem to be a violation of existing law (though it might be a legislative issue, mostly at the state or local level like most land use issues), the third is for the inspector-general or similar authority of the agency employing the contractor.
https://www.ftc.gov/legal-library/browse/cases-proceedings/2...
There is only one Amazon and I am sure the FTC is receiving a ton of complaints against them.
They're just profiting off of a supply shortage. Fix the shortage and they won't be able to make money.
Amazon does exercise a fair amount of their market power. FBA policies are generous to the consumer and to amazon, taking it out of the third party sellers. The other classic example was IIRC diapers.com which was a sharp competitor until Amazon bought it and raised diaper prices. It's possible this was all a ZIRP fad, and diapers.com was burning through investor cash, but still a pretty clear-cut case of consolidating market power (at the time the FTC did not consider it illegal).
By what reasoning? If it’s not harming consumers then what is the issue being raised
A truly competitive marketplace allows any supplier to easily match with any customer. Suppliers gain market share by being the ‘best’, not by being the only option.
They also got insight into every states future plans (which are secret for some reason ) when they offered to build new HQs but then decided not too. This gives them a huge advantage over anyone else who wants to setup a nation wide logistics service.
Almost every major grocery store and convenience store chain does this. These are the store’s generic brands, they are specifically designed to be copies of the name brand, and they are positioned more favorably on the shelves. (They often say “compare to [name brand]”.) In general, this is highly beneficial to competition and the consumer.
If you want to make an argument that Amazon’s high market share makes this strategy damaging when it would otherwise be good, then sure go ahead and do that. But the argument needs to be specific and quantitative.
is solely an anti-competitive tactic, because how else would Amazon guarantee the fast shipping, etc. if they aren't in control of the fulfilment? I thought prime is only possible through amazon distributing third party products to their warehouses all over so that the shipping can be so fast.
People will walk away, there's no choice and MegaCorps know this, so they will subtly lock down movement.
Medium sized businesses are the buttery smooth, slippery slope to hell these days.
Attention management and product discovery has to be done by permenantly white organizations, monasteries, regulated-to-inaction government arms, independent offshoots of a benevolent billionaire's philanthropy...
The panopticon doesn't just effecy day-to-day life... it also strangles the power and wealth of businesses to death.
I have been saying it for years, and people just dismiss it, why would a billion dollar company prey on a million dollar company, they have bigger opportunities...
Well. There it is.
It should be illegal to convince people economically that a certain lifestyle is worth switching to when you are keeping secret your plan to slowly boil the ocean tweaking it so that you can get your exit.
Meanwhile Amazon is full of fake reviews, counterfeits, sponsored listings, and other scams that are passed off as legitimate or even premium.
Any business owner is free to build their own website, set up payments, set up accounts with FedEx and UPS, and rent some warehouse space. That’s a tough row to hoe!
The girls here actually have a competitive advantage! They have a time limited product (beauty, youth) that is not easily replicable.
I'll either find a better channel, price point or give up on my dream of dirty bath water money. Point being the actual value is the packaging and selling of said bathwater.
In general, cost per unit is cheaper if you have more volume.
I buy tons of stuff on Amazon. I buy from them rather than from eBay or an independent online retailer because I know it'll actually get delivered to my house on time. For me, the marketplace is basically irrelevant - it's the promise of fulfilment by Amazon that I care about.
I sometimes reluctantly buy from an eBay seller or a random e-commerce site when the item I want isn't available on Amazon. Those retailers tend to offer "FREE DELIVERY", but they also tend to be very evasive about how long it'll take and which company will do the delivering. Sometimes they'll advertise next-day delivery, but take two or three days to actually dispatch the package. Sometimes they'll use an ultra-cheap delivery service that takes 3-5 days, with no prior warning of which day they'll actually try to deliver on. Sometimes their terrible delivery service will decide that they just can't be bothered to deliver to my house, so they'll lie about having tried to deliver it and tell me to collect it from a warehouse. Sometimes they deliver to somewhere random in the vague vicinity of my house (a neighbour, underneath a parked car, behind a bush) and I get to play a fun scavenger hunt where the prize is something I already paid for. These bad outcomes literally never happen to me when I buy from Amazon.
In the event that something did go wrong with a delivery, I'm confident that I could just contact Amazon and they'd make it right; when something goes wrong with $OnlineRetailer, I often find myself refereeing a dispute between the retailer and the logistics company, both of whom deny responsibility.
There are plenty of alternatives to Amazon, but from a customer's perspective they just suck.
They're two entirely different things (you can actually use Amazon fulfillment for items sold on other websites, although it's typically too expensive). If Amazon fulfillment continues to dominate on an independent platform, that's great, they earned it, but at least they won't have absolute pricing power because sellers will have alternatives, and at least other companies will have a chance to impress you, too.
I'd figure that the marketplace would show the fulfillment company in addition to the way that the courier is typically indicated, so that customers could express their preferences. If the item does a lot of volume, perhaps a seller would even have inventory with multiple fulfillment companies, and buyers could pay a surcharge to get their preferred fulfillment, same as shipping.
You've missed the idea entirely. No shipping services are envisioned whatsoever by the "public utility". It would just be the actual marketplace connecting buyers, sellers, and fulfillment.
Amazon can continue to do order fulfillment if they like, it's just that any company with a warehouse can actually begin to compete with them. Sellers would be able to freely associate with whatever fulfillment company best suits their needs, rather than being captive to FBA.
> What on earth are you on about? They own a url.
Right, from which they extract enormous rents. It is not a product in which they continually invest. If you have used it with any frequency over the past decade, you've almost certainly noticed how shitty it's become. That's not an accident; their "sellers" (tenants) are locked in, and are paying something more like obligate rent rather than indicating with their dollars that Amazon's product is the best.
It would be the same story with privately owned power lines or privately owned roads. You're not using them because they're the best, but because you don't have a choice. We screwed up with the actual internet cables, but we still have time to get it right with internet marketplaces.
Are you sure? Consumer behavior seems to be to simply go to their default marketplace rather than to search the whole internet (which is slow, painful, and low-trust), so it ends up being a winner-take-all system where alternative marketplaces like eBay are almost irrelevant and Amazon charges whatever they like and basically ignores counterfeiting and review fraud.
There are "natural monopolies", like with roads and power distribution networks, and I would argue that online marketplaces have turned out to be another one, and we should modify our public policy to reflect that.
There's an increasing trend of foreign manufacturers copying (or even simply producing unlabelled variants) popular products then white labelling them. You see this all over Amazon where there are dozens of brands selling the exact same product with their name stamped on it. Those products are always some slight variation of a bit name.
* Solo Stove - dozens of identical knock-offs
* Power screwdrivers - Nearly limitless variations of the popular brands
* Theragun/Hypervolt - Literally dozens of knock-offs with slight variations in packaging.
This continues for nearly every single category.
a quick google search turns up this store. whether they designed these firepits themselves or it's a catalog design from a chinese seller, i don't think it's really fair to compare it to an iPhone. and given the sheer number of designs in his store, i think it's a fairly safe bet that they're reselling catalog products from chinese sellers.
https://www.alibaba.com/product-detail/Black-Crossweave-Larg...
alibaba unit price(list): $40.00 amazon seller price: $199
That's astoundingly rich
Wonder what additional fees are associated with it.
On these items Amazon fully realizes they can charge 90% and the seller is still making a profit, so they do.
If you're selling appliances or TVs or computers the % is not nearly that bad.
The warehouse and shipping fees on such large & heavy items would be onerous would be my guess.
Yeah, I've done enough FBA to rank somewhere between a serious hobbyist and an actual lifestyle business.
There is a sweet spot. If you're selling lightweight crap items, even the small shipping and fulfillment costs still tend to dominate. If you sell huge stuff, the shipping will bite, but not as bad as you'd expect -- Amazon has very good rates. The big problem for bulky items tends to be warehouse fees, and also the logistics of getting it to the FBA warehouse in the first place.
I'd say around 1 cubic foot is exactly where you want to be (with the dimensions carefully chosen to keep you in a favorable category, of course). I believe 18"x14"x8" is the biggest legal standard package.
Somewhat counter-intuitively, if you miss that standard cutoff, you might as well go big (3+ cubic feet) since you're paying the same oversize rate either way, the only drawback is warehouse costs. There's sort of a no-man's-land in between toaster-size and microwave-size.
Anyway, here's the actual fulfillment fees, if you're curious (notice how reasonable the rates are in the "Large Standard" range):
https://sellercentral.amazon.com/help/hub/reference/external...
https://sellercentral.amazon.com/help/hub/reference/external...
Or you can not be on Amazon but "just don't sell Windows if you don't want to pay extra" didn't work for Microsoft...
Amazon charges for all of those things still. This isn't 50% off and we deal with everything it is ~50% but you still take all economic risk.
Nobody was being stupid here. Or maybe I should say that one learns the ropes fast or goes bust.
There is a difference between "let me buy from you and I need room to make a profit" and "you can sell through me but you bear all costs but I still want my profit".
What leg work? Customer acquisition? They paid amazon for that. Delivery? They paid amazon for that. Manufacturing? They paid China for that.
I don't really see it that way. The sale wouldn't exist without anyone in the pipeline (Amazon, manufacturer in China, shipping merchant, etc.)
I think it's actually worse than that. The merchant is the only party that is not needed.
In fact, calling a lot of these folks "merchants" at this point is probably a little too generous. Amazon is the merchant. Many of these other guys are sourcing and marketing "partners" for Amazon and the manufacturers.
https://www.sellerapp.com/blog/how-to-get-your-shipments-fro...
Yep this is definitely true. I sort of saw it as a two birds kind of situation. I wasn't privy to the reasons for c suite decisions but imo they are definitely cognizant of regulatory concerns.
It was a galaxy brain political move early in the administration and a direct reason why we're seeing these antitrust cases prosecuted.
Apple realized this and was able to bully their way to a deal that worked for Apple, and the labels had no real ability to counter Apple. Amazon has yet to do so.
Arguably, Amazon has substantially more market power now than Apple did back in the Jobs days when they were building out iTunes and negotiating with the major labels.
That said, I am not aware of any actual anti-competitive practices that they do there. The examples that some high profile folks have used feel very weak. Prices are lower for customers than they have ever been, and profits for the talent are almost certainly up due to increased sales volume. Their percentage profit per sale is down, but the history could also be that keeping that percentage high would not have grown the market? Such that, they could not have gotten the larger pie without the smaller slice. But, now that the pie is big, they want the bigger slice.
Yes the overwhelming majority will lose but it makes continuing business as usual as expensive as humanly possible. There is no way all these companies can recover every last penny if this is continually done every election. (There are small time elections happening every year so there really needs to be challengers at all levels)
That seems the most likely reason. I am sure there are services to automate these kind of blackhat actions.
> "(b) using their inside access to Amazon’s network to suspend competitors’ 3P accounts; and (c) providing consultants with information about Amazon’s internal algorithms, which allowed the consultants to flood competitors’ product listings with fictitious negative product reviews."
https://www.justice.gov/usao-wdwa/pr/six-indicted-connection...
There's another thing where well known brands will hire a company like https://amazzia.com/brand-protection-2022/ for "brand integrity." In reality, what this means is that they monitor Amazon for listings of the brand's products that violate the brand's Minimum Advertised Price policy and then report them a bunch of times as counterfeits or contact some Amazon employee they have a (potentially corrupt) relationship with.
Just because the average person can't prove them wrong by argument doesn't mean their right.
It's getting pushed harder due to things like Shop Pay being a thing. I've actually been trying to use it more, given I do purchase an increasing number of things from Shopify-powered retailers - but their search and targeting still needs a lot of work for it to behave like a proper marketplace.
Shopify did try to get into providing those services for its clients but they later reconsidered:
https://www.freightwaves.com/news/flexport-acquires-shopifys...
Has anyone created software or a web site to generate hilarious Amazon brand names automatically?
Edit: Looks like there are lots of AI-fueled Amazon/business name generators. Most of the names weren't as funny as your examples, though I got some good ones (electrofakes.com, etc.) from prompts like "low quality tech products" and "cheap knockoff technology products."
Another site gave me the more Amazon-appropriate LAMOFY, HOROLY, YORBAX, etc. (all with .com domains and premade logos.)
As the NYT noted, "Amazon is to fake products as Facebook is to fake news."
But then again, I remember seeing COBY products right next to SONY products and I guess they're still around. :)
I bought products from all these Amazon vendors last year, hilariously they're still around.
The world wide web + google and facebook make finding eyeballs open for all. Fedex, UPS and USPS make shipping products open to all. Stripe makes accepting payments open to all. Cheap 3rd party manufacturing makes making things open to all.
We've probably never been further from a monopoly in any of the areas in question. The reason it's so damn hard to make any money selling random products is that there is just so much competition.
It's not clear to me why droppshippers deserve special care and treatment by the FTC.
In the case of a firepit, local consumer channels would likely be speciality shops, hardware and big box with probably a couple of layers of distribution and logistics in between. That market however is more likely to offer $500-$1000 firepits, because that's the way it WAS before Amazon, ALi, etc etc opened up new digital channels to drive down volume, manufacturing and up quantity (which eventually results in either greater margins or lower prices).
Those same non Amazon channels will also sell Joe FBA's $200 firepit as well, perhaps for $400 using those other channels.
To access and operate a business around those traditional / other channels however is nowhere near as simple as "order 50 of these on Ali" + "sell these as FBA on Amazon" = $profit.
It's a lot of work. I wouldn't necessary call Amazon a shortcut, but it's a path to market that is easier, but at a cost.
Newegg Best Buy Walmart Home Depot bh photo wayfair webpage that takes you to shoppay or something else
The only viable business here would be a product you’re self-manufacturing or having made bespoke, and even then you better hope you can get some recognition behind your trademark before the chaps out in Shenzhen get a hold of it.
Perhaps selling a higher priced product would find a lower share going to Amazon?
I don't know myself
I agree. It just gets passed down to the customers. Most of my shock was directed at the 50% increase in fee in just a few short years. You can't do that without having a lot of leverage.
That's a common but not an accurate belief:
As a business owner pricing a product or service, if your costs increase you can either take the marginal cost out of your net income or increase the price.
Taking it out of your net income is simple: You keep prices the same, revenue remains the same, and profit drops a bit.
Increasing the price is more complex; you are changing one component in a system of dynamic feedback: When you raise the price, fewer people buy your product, so the outcome may be less revenue and less profit. The impact of price changes on purchasing is called elasticity: Some products - e.g., fancy restaurant meals - are easily forgone and are thus price sensitive. Others, like necessary healthcare, can be priced extortionately and people will still buy it.
Arguably, if you are the mythical optimal manager, you've already priced your product to maximize revenue and therefore any change will decrease it. In that case, price increases will only worsen your profit.
The reason for your price increase is orthogonal to the customer's purchase decision - you raise the price, they buy less. They usually don't know and don't care why - do it for greed, to cover additional cost (and maintain your beloved profit margin), because your finger slipped on the price-your-goods app, whatever.
FBA is like eBay, PayPal, FedEx, Google Ads and a warehouse all wrapped into one. But they charge you varying types of fees based on different measures, at different times, for each of those parts of the stack. And you cannot cross shop, mixing and matching other vendors in to keep them honest on pricing.
It's easy to use, but you are locked in to their stack.
The entitlement these entrepreneur types exhibit is the economic equivalent of wind-drag. If buying stuff from random AliExpress sellers and charging 300% markup to sell it to people who don't know better on Amazon isn't working out for you, maybe you should find a way to contribute to the economy instead of just inserting yourself between existing profitable businesses and demanding money for sending some emails.
You're criticism seems to be grounded in a distaste for the kind of business being done (and I think it's quite fair to be critical of the business model based on cheap Chinese labor). But that's not really relevant to the question of did Amazon utilize anti-competitive behavior that violates the laws that govern how businesses are allowed to behave.
The hard part. Finding a product people want.
If that were so easy, Amazon would just be a store, no sellers. That part they can't do themselves.
If you can find a single private equity firm doing that to a functionally bounded market to secure a monopoly on, say, rental housing, sure.
But that isn’t the complaint I’ve heard about PE effects on housing markets.
(I don't think it produces a volume of data that escapes the free tier, but I'd have to check)
All other clouds provide a detailed cost breakdown report for free.
Is it? The moaning from higher in the comment tree seems to disagree with that assertion.
Maybe it was once profitable, but it seems as Amazon's reputation for hosting tons of cheap resold goods gets worse, it's becoming significantly less so. I personally have known for years that it's possible to oftentimes find the gadgets sold for $15-20 on Amazon on AliExpress for a few bucks. This isn't exactly arcane information anymore.
> You're criticism seems to be grounded in a distaste for the kind of business being done (and I think it's quite fair to be critical of the business model based on cheap Chinese labor).
My criticism is that the same people who cry from the rooftops about how free commerce is essential and how they have a right to sell marked up goods under any name they like to people who can't trace their supply chain have zero basis to complain when consumers get wise to their shenanigains and go elsewhere. It's literally this kind of "business owner"'s fault that Amazon is becoming near unusable now. I'm not shocked one bit that Amazon is cracking the whip; their reputation is on the line and has been trending steadily down for years.
"Buyer beware" they chant. Until the buyers start bewaring, and then they start whining about unfair competition and high fees for their store that is entirely operated by a third party and literally cannot exist without it.
Amazon is no angel here either of course. They have monopolized the absolute shit out of online retail, one of the ways they did was offering reseller services and getting businesses on their platform in the first place. Neither "side" of this is right, per se. Both of them would send me as a customer up the proverbial river to make a single dollar. As far as I'm concerned, them fighting in court is strictly entertainment, apart from whatever precedents get set that might affect other businesses I actually give a shit about down the line.
But like, the businesses I give a shit about are like, local ones. Ones run by people, to serve people. Not ones pulling tag clouds from trending social media topics or buying ad space on instagram to sell an egg beater shaped like a cat for $35 that they got from a Chinese manufacturer for $5.50/10,000 and dropshipped to people. This is just that, with an extra step. And the entity that's the extra step is realizing how raw of a deal it is, and they want a heftier cut to put up with these middle men. And on that particular point I don't blame them one bit.
There's no option to sell on Kindle's own store with DRM disabled indeed.
edit: A poster has a link saying otherwise. Will ask what's up on the Audible side then.
> At the Publisher's request, this title is being sold without Digital Rights Management Software (DRM) applied.
(Specific title as just a convenient example from that publisher)
This is the problem.
She has literally been building this case against Amazon since she was a student. It’s not just about dropshippers. It’s also about how Amazon uses automated price controls, guided by scraping of competitors, to engage in dumping [2] and predatory pricing [3] to wipe out competing e-commerce sites. Since everything is automated, prices can change in a matter of seconds, so once competitors are destroyed, prices go back up automatically.
[1] https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
[2] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)?wprov...
[3] https://en.wikipedia.org/wiki/Predatory_pricing?wprov=sfti1
From what I recall, the reason why her argument was recognized is because it solved a thorny problem of US anti trust law, proving harm.
Currently, in the US what matters is showing that consumer welfare was harmed. AINAL but proving harm is not easy - Amazon in particular reduces prices to the end customer, increases choices and makes sales easier.
This is where most arguments died, however her approach had enough merit to pursue.
However, it seems her approach and argument has changed, and is more couched in terms of current legalese - more focused on showing consumer harm than applying a new legal approach.
How is this different than a grim reaper strategy taught in econ 101?
There some genuinely good beers around, but they are few and far between and WAAY more expensive than great beer in Germany. And from elsewhere in the thread, it sounds like our 3-teired system does indeed majorly suck for microbreweries. It may be a big part of why they have to cheap out on ingredients and try to cover it up with palette-dominating hops in order to turn a profit and stay afloat.
American craft brewers lean heavily into hoppy IPAs because that's what craft beer buyers like. IPAs are almost always the best selling beer that a craft brand makes. If you talk to them, they will say they'd love to make more varieties of other styles of beers, but IPAs keep the lights on, thus 40% of their product portfolio ends up being IPAs.
I hate IPAs and the style of hops American brewers use, so I tend to drink imported German/Czech lagers and pils a lot.
That was a unique situation that couldn't be replicated later for video and other media sadly.
So how can you make the case that Amazon doesn't have "leverage" to negotiate DRM-free publishing?
> together with CDs not having DRM
I don't recall printed books ever having any form of "DRM".
Whereas I have many eBooks purchased years ago from Apple's store that I can only read on Apple devices, not on my Kindle.
The FTC claim is that Amazon _over_ prices products. They are in direct opposition.
Further, the essay was written six years ago, and to an audience of legal scholars. This case is about Amazon today and the audience are courts. The facts and arguments derived from them are naturally different.
I would suggest reading the entire thing, especially the excellent summary on the history of legal and economic theory applied to anti-trust to understand the deeper meaning behind the abstract itself. It's hard to boil down a nuanced and complex argument into a single paragraph. There's a lot of meat there.
The Yale article argues that Amazon has avoided anti-trust scrutiny because most anti-trust regulators are laser-focused on price and output (is Amazon fixing artificially high prices? Is Amazon artificially limiting output?), and this approach misses the ways in which Amazon limits competition (mainly predatory under-pricing and vertical integration). The article goes on to suggest that by ignoring these, antitrust regulators are "overlooking the structural weakening of competition until it becomes difficult to address effectively, an approach that undermines consumer welfare."
You're right that the article does talk about practices that aren't mentioned in the complaint, like predatory under-pricing.
However, it also discusses the ways in which Amazon uses vertical integration to create barriers and reduce competition. Here I quote from the article:
>Amazon is positioned to use its dominance across online retail and delivery in ways that involve tying, are exclusionary, and create entry barriers. That is, Amazon’s distortion of the delivery sector in turn creates anticompetitive challenges in the retail sector. For example, sellers who use FBA have a better chance of being listed higher in Amazon search results than those who do not, which means Amazon is tying the outcomes it generates for sellers using its retail platform to whether they also use its delivery business. Amazon is also positioned to use its logistics infrastructure to deliver its own retail goods faster than those of independent sellers that use its platform and fulfillment service—a form of discrimination that exemplifies traditional concerns about vertical integration.
>The clearest example of how the company leverages its power across online businesses is Amazon Marketplace, where third-party retailers sell their wares. Since Amazon commands a large share of e-commerce traffic, many smaller merchants find it necessary to use its site to draw buyers.These sellers list their goods on Amazon’s platform and the company collects fees ranging from 6% to 50% of their sales from them.
These quotes map pretty cleanly onto two of the complaint's allegations:
>Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.
>Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.
At the end of the day, Amazon is a very big company that does a lot of different things at the same time. It could be under-pricing ebooks and overcharging FBA sellers at the same time.
The point of the Yale Law School article is that anti-trust law ignores anti-competitive practices until they significantly distort prices across the company's largest market, but that these practices have a chilling effect on competition far before that point. Khan argues that anti-trust regulators should go after companies using these practices before they cement market leadership and fully edge out competitors.
>On the Chicago School’s [(the pre-existing paradigm's)] account, Amazon’s vertical integration would only be harmful if and when it chooses to use its dominance in delivery and retail to hike fees to consumers. Amazon has already raised Prime prices. But antitrust enforcers should be equally concerned about the fact that Amazon increasingly controls the infrastructure of online commerce—and the ways in which it is harnessing this dominance to expand and advantage its new business ventures.
This is exactly what Khan's FTC is doing now.
Every national grocer does this. It seems to be a pretty close analog yet nobody bats an eye at the practice.
That is the definition of a pro competitive behavior.
Lower prices for consumers is the whole point of a competitive market!
Yes, big companies can compete in the market, by offer better quality stuff, for a lower price. Thats what we want!
You are literally arguing in favor* of monopolies, and against competition by saying that other companies shouldn't do a better job.
Thing is, these silly UPPER-CASE-NONSENSE-COMPANIES are winning against established brands with quality products.
Except there is a trend now where a brand with products of known good quality like YETI can now charge outrageous amounts of money - like 10x or more.
This is still at-risk because you are not required to list on Amazon to use FBA.
The handwritten note is a better indicator for sure.
I contacted Amazon and told them it was fake, without hesitation they told me to throw it away and they were sending me a replacement.
It would be hard for me to believe that they didn't know exactly which company shipped them that product.
It would be easy for me to believe that they didn't notify every other customer that received that product from the same shipment.
I don't know the law very well, but I would hope there's a legal doctrine that responsibility has to effectively land somewhere. If a company is passing responsibility en masse to some other entity that cannot be effectively sued, then the responsibility should actually lie with the first company.
That’s a very different (I’d argue healthier) world than online retailers where Amazon has like 36% but the next largest (Walmart) is like 6%.
You need to weigh the market share against the number of players in the space.
Also that’s not to mention how all 3 major game console players have some kind of moat or walled garden (exclusives.)
Most online retailers are basically interchangeable, but Amazon is still the single largest player by far at 36%
To your numbers, though, I'm not sure I see the argument? I'd be very surprised if that 25 is evenly split between Nintendo and Microsoft. And where is Valve in that?
Playing into your argument, is Walmart really only 6%? Of all sales that happen period, how is the online/offline split? From my perspective, folks love to hate tech companies. You'll see silly headlines about 1 in 169 people work for Amazon. You don't often see similar headlines for Walmart, which has twice the associates, if I recall...
With Amazon however, it's more complicated since they control so many businesses. Visiting a website? Very probably it's hosted on AWS, or on a platform that runs on AWS. Visiting a friend with a smart doorbell thingy? Quite probably an Amazon Ring. Want to buy an e-book to read? Sell your soul to either Apple, Google or Amazon, or other smaller platforms (or pirate the book or buy it physically).
Maybe your point just sucks because finding some cheap garbage on AliExpress that you can sell with instagram ads isn't actually all that hard, or that much work, which is probably why this exact business model was sold to people who, as stated by people selling it, had low skills and no interest in acquiring them, so they can generate passive income by operating an automated storefront on Amazon.
Come on.
That is what I meant.
I'm not as confident that they have the agreement include that they will not offer authors a way to have DRM free content on the platform, but I would not be surprised by it.
If Amazon was actually motivated to refuse DRM, then we would be in an entirely different situation. The reality is that the opposite is true, and that Amazon itself is one of the publishers requiring DRM!
"They're bad, but they aren't as bad as those other guys. In fact, I think they are stupid for not being worse."
The fact that we’ve heard nothing strongly suggests it isn’t happening.
Before Snowden PRISM was considered impossible (even though previous people had leaked it but never got picked up by the media cycle), before Epstein it was impossible that billionaires were trafficking children for sex, before 2008 it was impossible that wall street was colluding to rig the market - the consistent thread in all of these is that the "impossible" was happening for several years before it was ever exposed.
I understand the incentive to leak it exists, but that doesn't mean there isn't a stronger incentive to keep it a secret.
If you work on PRISM leaking its existence does nothing for your career. Quite the opposite in fact. But if you work for a newspaper and leak a massive story it’ll be very beneficial for your career.
We’re talking about professional journalists here. I’m quite sure they’re aware of it all. If the story is newsworthy and backed by evidence you’d be able to take it to any competing newspaper. I imagine the Wall Street Journal’s legal team would be happy to bear the brunt of any fallout, it’s their job.
I know evidence the contrary: The Post is clearly on the Democrat side, and it's Democrats that seek more regulation and who are suing Amazon.
You mean the (left-leaning) newspaper that Bezos bought in 2013 vs Diapers/com that Amazon bought in 2010?
My point is that that question was never asked: practically all of the publishers that sell on Amazon's marketplace - including Amazon Publishing - agree that they want DRM incorporated into Amazon's digital marketplace platform.
And you seem to be dodging my point? My assertion/wager/whatever is that the publishers actively want it so that Amazon has to have DRM on their devices and sales. Just as they want it on libraries lending. Do I /know/ this? No. That is why I worded it as something that would shock me.
I agree that my willingness to wager on this would go down as I extend it to my larger guess, that they also have terms covering things that Amazon publishes. That said, it lowers my willingness, but it does not seem beyond the pale.
Amazon represents something like 40% of all online sales. Typically having a large plurality in a market raises the likelihood of actions against you.
>It seems to be a pretty close analog yet nobody bats an eye at the practice.
Or, more likely, tech people pay attention to Amazon and not the myriad of suits occuring in the retail and grocery world.
We're listening. Feel free to toss some examples of these myriad of law suits against brick and mortar stores for their in-house brands.
The supermarket wouldn't stock the national brands at all if customers weren't buying them.
Well for one it’s different in that store brands are often made by the same manufacturing/processing plant as the regular brand.
So not only is consent implicitly build in because the producer agreed to make the store brand variety, it’s another income stream.
And secondly the store brands typically go out of their way to differentiate themselves from the main brand to such a degree that if you hold the two boxes next to each other you wouldn’t mistake one for the other.
Thirdly they significantly undercut the other brands and sellers. They can do so because they don’t have to pay themselves a commission and all the other fees, which in turn forces the other brands and sellers to match or eek out a small price difference in which they’re cheaper in the hopes to get some sales, cutting into the already thin margins that are left after paying Amazon’s fees.
Amazon is also in a better position because of the vertical integration, they have a direct relationship with the manufacturer which cuts out the margins of the middle men (the sellers and distributors), regular sellers on Amazon have the distributor’s margins to deal with and then their own margins and as opposed to Amazon they can’t sell their items as a loss leader.
As for Walmart and similar retail, it’s a whole different situation. The manufacturer sets the price and within it, their margin. The retailer then purchases it at that price and tacks on their margin, but if it’s on the shelves then the manufacturer has been paid so there’s no risk for the manufacturer because the retailer carries the risk.
There are some nuances and exceptions, such as manufacturers sometimes being able to force a MSRP onto the retailer or a retailer being big enough to leverage a better price or a risk shifting agreement where the retailer doesn’t have to pay for delivery until the items are sold, nevertheless, in general the relationship is entirely different from the relationship Amazon has with its sellers.
And lastly, Walmart doesn’t hire people to walk beside you in the store to swiftly grab a Great Value variant and push it in your hand each time you so much as think of buying something.
The cereal factory that makes Kellogg’s cereal also making Great Value cereal is therefore not comparable to Amazon.
Amazon typically makes their Basics items look identical to the most popular brand and place it at the top of search results.
Now the original brand is forced to pay to get their item at the top of the list, and even then it’ll get second place, underneath the Amazon branded one (often barely above the fold).
Take this example of me searching for a padlock[0][1].
Not only is the Amazon branded lock identical to the one below it, it’s placed prominently at the top of the results in such a way that it’s the only product that can be seen in full.
The one immediately below it doesn’t get top spot despite being “sponsored” (i.e. paid to be prominently displayed) and if you look at the price they’re trying to be a little bit cheaper than Amazon in the hopes to generate sales but given how minor the price difference is with the Amazon branded lock, it comes across as a painful thing for them to do because it seems to me as a meaningless difference (but admittedly that’s me reading into things).
The issue is that when you’re the platform holder that sets the fees for sellers, controls what people see, have insider knowledge on sales and you use that to benefit your manufacturing and sales division, then you have too much control and are abusing your powers imho.
Brick and mortar retailers don’t have this much control over and information on their suppliers.
Edit: Heck, just playing movies on my computer DVD drives was less than straight forward. For the longest time you basically had to feel like a hacker to get it working on a linux machine.
> finding some cheap garbage on AliExpress that you can sell with instagram ads isn't actually all that hard
It's very hard. What you're missing are all of the thousands of people who try it and fail. And you see one person succeeding and say that's easy, they're just buying shit from China. No, they combined skill and a lot of luck to find a product in China people want. That's not just ordering shit from China. If it were, Amazon would do it themselves and cut out all of these middleman. Which they can't, because it's not scalable. Which was my original point.
> What you're missing are all of the thousands of people who try it and fail.
It's not easy or hard. It's lucky. It's getting your ad seen in the right place with the right audience and taking off with enough sharing to build virality. Then your store will do a brief burst of good business before you fall back into irrelevance and continue.
It's highly analogous to gold rushes. And then as now, the people who get reliably rich off gold rushes aren't mining gold, they're selling shovels and pickaxes, namely: hustle influencers, shopify, and indeed, Amazon.
> That's not just ordering shit from China. If it were, Amazon would do it themselves
Buy some Amazon Basics stuff and check where it's made, then get back to me.
> and cut out all of these middleman
Which is what they seem to be doing.
Like again, for emphasis: Amazon is not a good guy here. They are neutral, at best. But I have very low sympathy for people who build their entire way of life on one single platform that could at any moment tell them to kick rocks. It's bad when YouTubers do it, it's bad when instagram influencers do it, and it's bad here too. And all of these usually end in similar ways. You're only as good as your last post, your last sale, your last quarter of profits and if your and the platform's interests diverge enough, you'll be dropped like a flaming bag of dogshit.
> It's not easy or hard. It's lucky.
Great, thank you for teaching me about the English language. None of this addresses a single thing about my point, it's just nitpicking my choice of words.
Use whateeeeeeeever words will make it through your compiler, insert those in place of mine - and that's what I meant.
> Buy some Amazon Basics stuff and check where it's made, then get back to me.
> Which is what they seem to be doing.
Nitpick 2, Electric Boogaloo. Now you have a problem with the way I've used some other words or the absence of some qualifiers.
Building all the infrastructure required for FBA is much more difficult than choosing products. The proof is in how many people have done one v the other. Amazon does a decent job on both sides - building the infrastructure, and figuring which products to sell, at scale (they do 100's of billions of non 3rd party sales every year).
FBA is scalable.
These people are doing the unscalable part.
"But I was nitpicking whether the word nitpicking was accurate"
I'm not choosing a new word, get out your thesaurus. Then read this: https://en.wikipedia.org/wiki/Principle_of_charity
ATT: Apple's App Tracking Transparency, not AT&T
FBA: Fulfillment by Amazon, not related to FB
DTC: Direct To Consumer, not Depository Trust Company
"boo hoo, I can't invade my users privacy anymore! Waaaaah! It's unfair"
In fact they explicitly prohibit using in-app purchases for physical goods, presumably because they don’t want to deal with the headache that comes with providing customer support for those transactions.
I don't think there is nothing at all there. However, most of the criticisms you will see in the wild about how AWS pays for retail are almost certainly from ignorance of how retail had to literally seed AWS.
And don't take my criticism of that point as some sort of promotion of Amazon. I can be critical of the complaints without having to worship them.
>by offer better quality stuff,
Amazon, for example, offering counterfeits of your product as your product is not under the definition of "better quality stuff"
>for a lower price
Again, offering a lower price consistently is one thing. Using pricing as a weapon, for example selling a product lower than cost in order to monopolize a market is not.
If the price stays low and never goes to high monopoly prices then it is a good thing.
If a company becomes a "monopoly" by being cheap, and staying cheap, thats just competition by definition.
Which is the situation we are seeing with amazon.
Not necessarily, but it goes a long way to balancing out the negative consequences. The problem, though, is they've never had prices stay low. Eventually, prices go up. So far, Amazon does this through loss-leaders; products that have low prices allowing them to capture a market and charge high prices for other products as a monopoly.
>If a company becomes a "monopoly" by being cheap, and staying cheap, thats just competition by definition.
If that was all they were doing it would be legal.
Big companies compete in the market by offering the same quality for a lower price. That's good, no problem with them doing that.
The problem is when the big companies crush nascent competitors by using their advantages in the market and not by being better quality or more consistent. That's bad; it stifles innovation and creates market concentration, resulting in monopolies and allowing large companies to charge supracompetitive prices.
But they have a lower price.
That's competition working as intended.
Yes, the lower price thing should win out against the more expensive product.
> to charge supracompetitive prices.
We aren't seeing too high prices.
We are seeing low prices and then competitors that suck complaining about the fact that they suck in comparison to the more competitive company.
So you can have pro-competitive behavior (lower price) that balances out anti-competitive behavior (crushing nascent competitors through market manipulation or cartels); That doesn't mean everything you do is above board. It means that while the lower prices are there, a certain amount of anti-competitive behavior has been acceptable because the net outcome to consumers is theoretically positive.
[edit] Think about this - if you can win with lower prices, why do the other anti-competitive behaviors? Why not just have lower prices and let others try to compete with higher quality or lower prices than you? Wouldn't that be better?
The reality of this is, though, that the monopoly you form affects far more than the consumer product price. What the FTC is saying here is that they are moving back to structural restriction rather than simply allowing anti-competitive behavior so long as the price is good, a la the Chicago School.
>We are seeing low prices and then competitors that suck complaining about the fact that they suck in comparison to the more competitive company.
That's not what we're seeing, though.
What we are seeing is artificially high prices. One of the allegations is that if a seller prices below Amazon, Amazon removes their access to market.
If it does well enough, Amazon can use the same manufacturer and release a branded "Amazon Basics" version that pops up in the same search for the same product but cheaper as Amazon doesn't have to pay someone else $112 for the listing and warehousing, and the original seller that did all of the actual "work" (as far as making it a profitable venture) is SOL.
Throw in a few dozen word salad named drop shippers who undercut Amazon in exchange for increased shipping times and the originator is wedged out of the market or cut to razor thin margins for years of effort.
Rinse and repeat.
It’s not like they’re putting banners over their product pics saying “hey, you know you can buy this exact same product for like half the price on alibaba if you’re willing to wait a couple more weeks for it right?”.
I don’t like Amazon consolidating this much power either but if they can push you out of your business that easily you weren’t the critical component of it.
Also, it's not like you have any choices. If you manufacture your products yourself, you have to fund a massive venture to handle the workload. If you outsource the products, then the companies you pay to manufacture your stuff can easily make knockoffs and then let drop shippers undercut you with inferior versions of your own products.
Look at a lot of the stuff for sale on Temu for instance. There are hundreds if not thousands of products that were invented, tested, and designed by Western companies that you can now buy a reasonable facsimile of on Temu for a quarter of the price.
This includes art work, enamel pins, battery packs, woodworking tools.
You're on a hard path either way, but if you make it to the point where you have a standout product knowing that at the final step Amazon can easily step in and price you out of existence, even if they had to take a loss on it just to destroy you, they could and there's not a damn thing you can do about it.
That should be broken up. Monopolies are bad. Monopsonies are bad. They are bad for the country, bad for the people, and bad for the flow of money.
I hope we see record fines against them and that everyone affected by this gets to be part of an earth shattering nuclear verdict.
Alternative suggestion: modern monopolistic corporations are disproportionately powerful. If they can topple a country to sell bananas cheaper, they sure as hell can kill a small business, no matter how relevant that business is.
Go ahead, call up your local 7-11 and ask them what their sales were for the quarter. They'll tell you to fuck off.
They have an inside advantage that no one else on the planet outside of ebay and Alibaba (and its ilk) have.
It entrenches them and enriches them unjustly. They make profit off of their competitors and have the option of destroying anyone who rubs them the wrong way without repercussion. The capitalistic market cannot speak on the matter as there is a monoposonistic gatekeeper on the market path.
Sellers are offering a generic product without barriers to entry like trademark, patents. Somebody else notices and contracts the same manufacturer to produce it or finds someone else who will (or makes it themselves). The new entrant sells it for cheaper.
All I see is basic economics. Business cannot stay afloat if their marginal cost exceeds marginal revenue. This is the best outcome for consumers.
Is this not just a market effect of saturating the market with competition because suddenly running a business is comparatively easy (communications technology, platforms and existing logistics and production networks) to any other era.
I can probably start a company drop shipping crap on Amazon in a short amount of time with a smartphone from my bedroom. The barrier to entry has dropped, rather quickly.
The slices of pie are getting very thin indeed. Especially when there are only a few pie delivery services to choose from and they take their slice first.
Good fat margins are a result of an ineffective market.
Why shouldn't they be allowed to do this? If you want to sell on their market, you promise not to undercut them.
Amazon exists as a discovery tool for consumers. They don't want third party sellers to get free advertising. That isn't anticompetitive.
I'm not clear on the relevance to this particular story. For one, ebook practices are literally not part of this case. For two, the assertion in this branch is that that exists at the demands of publishers.
Also, Apple didn’t limit their own advertisers from measuring conversions. So if you click an ad in Apple News and then buy an app from the App Store they will measure and charge the advertiser for that conversion without ever popping up a scary message saying Apple wants to track you. Go figure.
The companies have worked around these issues by doing stuff like statistical modeling to guess the conversion rate, but this has obvious downsides and makes everything harder, which puts them at a competitive disadvantage vs. vertically-integrated players like Apple and Amazon.
But also, Amazon doesn’t rely on product recommendations in the first place. When I want to purchase something, I usually go to amazon.com and type in exactly what I’m looking for. No need for Amazon to guess. Amazon does make recommendations, but at least in my case they represent a tiny fraction of purchases.
In that way I’m voluntarily contributing to Amazon’s monopoly. I feel bad about that. But I use Amazon anyway because there are no alternatives that offer even a remotely comparable buyer experience.
That’s a hell of an assumption.
1. Manufacturing does not happen in America anymore.
2. The proliferation of counterfeiters does not allow dropshippers to scale to a meaningful size. Everyone is game to Alibaba.
Within our industry of paper goods, our manufacturers have to get their parts and raw materials from overseas.
The larger FBA mom and pops will design and market their products here in the US using American workers and have them manufactured overseas completely or in-part.
The impact of Amazon’s monopoly power on American online product businesses is less jobs that pay well.
- Less accounting and bookkeeping jobs
- less marketing jobs
- less design jobs
- less seller fulfilled packing and logistics jobs
- Amazon offers a marketplace to sellers, which happens to be the largest marketplace with the most potential buyers.
- Amazon charges a fee to list on their site.
- Amazon doesn't let buyers sell their products for lower on a site that isn't Amazon. (Makes sense; they want to be paid for attracting consumers.)
- Buyers are cost sensitive and buy the cheapest product.
The outcome seems to be the most favorable condition for consumers. The complaint here seems to be that Amazon is so efficient that people would prefer to buy from them.
You are right that the current state of dropshipping is an abomination, and there's not much left to save of that job. But the reason for that is that more and more of the job and benefits from that business are being taken by Amazon, and the sellers are left with that doesn't really justify their position.
What they're left with - being a plausible scapegoat and discovering new products - is not their choice, it's the part that is not profitable to Amazon.
How many famous journalists can you name? I'm not saying there aren't journalists that want to do good work and become famous as a result. But despite their efforts they're mostly fighting a losing battle.
I’m not sure how that’s relevant. Ask a dozen people on the street who John Carmack is I’m sure you’d get a lot of blank faces. But if he walked into a dev shop looking for a job I think he’d probably get one.
Of course breaking a massive story is going to lead to you being well known. Perhaps only within journalistic circles but in the context of your career that’s the only thing that matters anyway.
(and to answer anecdote with anecdote: Woodward and Bernstein. Both have lived to ripe old ages, too, for what it’s worth)
My argument is the opposite. You can break a massive story and people can still not care. That was why I brought up the Panama Papers.
Anyway, let's just agree to disagree.
[0]: Put another way, if its expensive, it gets more scrutiny by the average consumer (whatever their definition for expensive is). The other circumstance is if they care about the category or are in the slice of shoppers who do quality research, which is less common than you might think, until the cost factor kicks in, usually.
[1]: This is brand awareness, and other related verticals. Effectively, this is what brand and mass marketing is about.
Well said. Also, let's not forget time. I've spent countless hours researching many things I intended to buy only to give up partway down the road. It's in part because of the endless results on Amazon (referenced here) but also elsewhere.
Let's say, for example, I'm trying to find the best saute pan. Amazon gives me thousands of results, but so does Google. My search results are littered with tons of X-best SEO-optimizing websites that don't help narrow down choices. So, in that situation, it's less about the price and more about the time: I'll just buy whatever seems reasonably rated and not outrageously expensive and move on.
I really enjoyed the earlier days of the Wirecutter - tell me the thing to buy in my search category even if it's not the cheapest or most commoditized.
[0] https://harvardlawreview.org/print/vol-134/fanciful-failures...
So the gamble is that UCNN is sourced out of the exact same factory as the product/brand you actually want. It's the the evolution of the Warby Parker model.
Until I do it incorrectly, and then I'm deliberately misconstruing your point into something you didn't say. Or if I do it in a way you feel makes you or your argument look stupid, at which point I'm arguing in bad faith.
No thanks. If you'd like to discuss things I'm happy to do that, that's why I'm here as Obi Wan says. But I'm not responsible for steel-manning your point for you because you lack vocabulary.
> Nitpick 2, Electric Boogaloo. Now you have a problem with the way I've used some other words or the absence of some qualifiers.
This is still not nitpicking. You have repeatedly put the notion of product acquisition on a pedestal, including the fact that pulling goods from China is this difficult, laborious task (which, it does take labor, that is true). But Amazon knows how to do that, it's basically how it became the retail juggernaut it is.
And that includes Amazon Basics products, which without even looking at one, I'd be willing to bet non-insubstantial amounts of money are manufactured mostly in China. That doesn't make them inherently bad: Chinese firms will make your products as good or as bad as you're willing to pay for.
That's what you're doing now, aside from pretending it isn't deliberate.
I strongly suspect all of you are Amazon astroturphers, so I'm going to disengage now.
Sorry, couldn't resist :)
If you want to trot out the principle of charity, it goes both ways. You assumed people were nitpicking. It was wrong. Every way you want to spin it by changing words, wrong.
And the remainder is not scalable. All of that done by their sellers. As evidenced by the fact that they are not doing it themselves.
I'm beginning to think this thread is being astroturphed. All of you are employing an identical strategy of latching onto minor issues with how things are phrased. A standard PR tactic. And Amazon has a long documented history of astroturphing.
How does it victimize?
Defeating competitors with lower prices is pro competitive, not anti competitive.
It is exactly what competition is supposed to do.
> why do the other anti-competitive behaviors?
Notice how I made no comment on anything to do with vague "other behavior".
Instead I was only directly responding to the idea of "undercutting" competitors.
This is competitive and the whole purpose of competition.
Undercutting competitors and copying them is the only thing I was responding to.
So my point stands.
That thing is pro competitive.
Go back and read the comment that I responded to here:
>> So you can have pro-competitive behavior (lower price) that balances out anti-competitive behavior
>Defeating competitors with lower prices is pro competitive, not anti competitive.
I already acknowledged that lower prices is a positive, not sure why you repeated that. If that's your only point, then yes - you are right, lower prices is a positive for consumers. It's a balance, though; lower prices don't mean there is no anti-competitive behavior happening.
Undercutting competitors and copying them is often fine, though the process by which a competitor is undercut can be anti-competitive itself and have structural consequences that are anti-competitive, and copying competitors is obviously restricted by patent and copyright. It's not a blanket 'this is the whole purpose of competition' thing.
>Notice how I made no comment on anything to do with vague "other behavior"
It's not vague - it's laid out in the indictment. I get that you don't want to respond to it and only want to prove that lower prices is good, but that conversation ended, we all agree that lower prices for consumers is good. The question is how good. Good enough to balance the bad behavior? The FTC clearly thinks otherwise.
When you respond to me and bring something up, it comes off as if you are trying to refute something that I am saying.
If you are now that that I was correct completely, and that you were just bringing up a separate point that is irrelevant and does not refute anything that I said, well then OK?
No one who sells on Amazon is a competitor. If you are selling on Amazon you are a customer, and every once in a while, Amazon comes in and starts selling your goods for less than you can because they decided they would make more money without you in the picture.
For a little proof, try to find Ammoon products on Amazon. They used to be everywhere. And the information isn't exactly public but there was a falling out between Ammoon and Amazon and now you can't buy Ammoon products on Amazon, but you can find Lekato and Sumimma and Joyo and Cuvave knock offs of the exact same products, and not long after this happened, Amazon started selling cheap guitar pedals under their Amazon Basics brand.
You may say, sure, whatever, but the primary product Ammoon sold was the cheapest ($35) looper pedal on the market.
Amazon undercut that price (to $26.50) and also booted their closest competitor and biggest customer in the guitar pedal looper segment.
Who would defend that kind of scummy action?
The fact that they didn't sell every single product on planet earth doesn't mean they aren't a competitor. They are practically in the "easy to manufacture by a third party in china consumer products" market. If a company adds so little value that Amazon's 5th rate people (The best minds at Amazon aren't sitting up at night worrying about the guitar pedal looper market) can beat them, they aren't adding value. And, one single distribution channel (the amazon website) doesn't define a market (with almost zero exceptions, amazon's website not being one).
For example, Amazon cannot swoop in and sell a cheaper Amazon Basics version of a product to which you own a critical patent.
They are really saying, though, that without barriers to entry and in a competitive market, players that don't innovate don't survive.
>First movers should not get a license to continue to reap a profit in a competitive market absent real innovation, which would come in the form of reputation (trademark) or technology (patent).
The problem with that is that this is not a competitive market, so the player that wins is not innovating, they just have market power because of their size.
That is the definition of winning a competitive market. The consumers win.
It is no different than Nike, who requires no discounts on specific products, etc. Amazon isn't prohibiting selling on non-Amazon platforms. Amazon is prohibiting undercutting them if you choose to sell with them.
How is that anti-competitive?
Yes, they are. They are using their influence and market power to prevent others from competing on price, using the threat of economic retribution on their platform. If this isn't anti-competitive, then nothing short of sending assassins on your competitors is.
While amazon is covering their own warehouse & fulfillment shipping costs, that's really that different from costs normally borne by retailers who have warehouses and handle delivery to their retail outlets.
For all of history we've known that this would lead the least competitive to liquidation.
The Panama Papers were a huge story, they won a Pulitzer! If you’re a journalist of course a story like that is going to open doors.
I feel like you're not actually considering what I'm saying and I'm exiting this conversation.
There is no victimhood if the business voluntarily transacts.
The FBA middlemen are more like traveling salesmen - they take an order, send it in to HQ, and HQ ships it to the 7-11. They don’t do anything but take orders. They are Tom Smykowski - they take the plans to the engineers!
You’re complaining that the storefront that the goods are sold through has its own sales information. The amount of sales you have through Amazon may be a trade secret, but it is not a trade secret from Amazon.
It's hard for me to say Amazon shouldn't be able to do it while every grocery store can, but there seems to be a quantitative difference because of the ridiculous number of options online vs the finite shelf space of a brick and mortar.
All the same economic games are played. Items are placed on specific shelves to drive specific sales, etc. Sale numbers are known by the store and they get their cut.
The distinguisher is supposed to be in the quality. Premium vs generic. That doesn't seem to play out healthily in Amazon's marketplace.
Maybe one difference is the consumable nature of the grocery products vs what one typically buys online (Amazon batteries as opposed to an animal carrier). Or maybe we have given up too much with the consolidation of grocery chains the last few decades and that is equally problematic.
I’m all in favor of suppliers competing with each other, as that’s in the best interests of society overall. But when the platforms/marketplaces themselves participate in that competition they have tremendous advantages, which is anti-competitive, and it benefits no one but themselves.
Amazon is actually more open than other stores about this information, giving product rankings so that you could decide to knock off popular products too.
On amazon, if you want to browse "electric bike tires with motors" you will have to browse through dozens of full electric bikes, electric scooters, hoverboards, tires without motors, tricycles, and all sorts of close but not quite what you're looking for items to find 1 that you might be interested in.
Want to price shop them? Good luck finding others to compare with.
It would be like looking for a 5 lb bag of white sugar in the grocery store so you go to the sugar isle and finding 1 half pound bag of brown sugar amongst all of the flour and seasonings and honey and agave nectar and sweet n low in the first 100 feet.
Any grocery store organized like that would fail and be replaced by a company with decent organizational flow.
But amazon makes money by charging the vendors on its market for visibility, in addition to listing fees, storage fees, and whatever else.
Amazon has a perverse incentive to not show you, the customer, what you are looking for when there is anything else close enough to what you are looking for that they will make more money for selling to you.
There isn't a better word than evil for this, even if it is the benign sort of evil that only added to the chaos and misery of the world without directly harming anyone.
Edit: Also companies like Google scan emails for information. Amazon stopped including prices in their emails because Google was getting a direction stream of sales data with full costing info.
If other competitors could get their costs as low or lower than Amazon's, then they could enjoy those margins themselves.
Where Amazon wins is the range of stock and its next day deliveries. Which means most people default to Amazon because it’s quicker and easier than shopping around. But you can definitely get cheaper if you were to shop around.
Also by Amazon owning the whole pipeline, from stock to delivery, they can squeeze costs down and thus improve their margins. For example, I guarantee you that other online retailers are paying more to ship their products than Amazon are.
if amazon captures a large ratio of people buying goods online, i would certainly consider amazon itself a market. But unless they also control some other aspect of the online market, it would be hard to claim they're a monopoly tbh.
_Anyone_ can setup an e-commerce site and sell online. Amazon doesn't quite fully control the hosting, IP and backend servers completely!
That is totally valid. Amazon provides the eyes; they don't want to provide a service for free. Think of all the people that go to best buy to feel a product and then buy it online. Amazon doesn't want that to happen to them.
Hell, they're even extremely anti-competitive with their employees. Their NDAs are very restrictive and have threatened non-senior employees with them, even ones that they let go.
There's a reason for struggling artists: nobody demands their product, so they end up in different occupations that actually provide value.
You just did the exact opposite.
How many companies will not enter the market because of Amazon's monopoly? How many products will never get invented because of the awareness of the system?
And even with this, with a monopoly it is not a race to the bottom. Once the monopoly is in place, you can raise the costs to whatever you want and the market has no choice but to grin and bear it or go without.
Monopolies are never good for the consumer.
You don't need to have lower prices long term if you control the market.
I get the argument, but it's a grim reaper strategy taught in econ 101. It's a well known strategy and completely valid.
Consumers win in the short term but lose in the long term. Except they can just consume different products or wait for someone to re-enter the market.
1. That was not the definition of pro-competitive behavior. 2. Lower prices for consumers is not the whole point of a competitive market.
You are 40 years behind on the modern day interpretations of the anti-trust laws by the courts then.
An analysis of how much consumers benefit or are harmed by certain behavior is what the courts use for most anti-trust laws.
And lower prices are almost the court decided definition of a consumer benefit.
So yes, the point stands.
Someone else was complaining about competitors being undercut, and I responded by saying that actually lower prices are good and this is what our anti-trust laws are trying to promote, not stop.
That's not the policy of Lina Khan and the current FTC. She was literally put into the position she holds because she was critical of that framework for antitrust.
Yes, since the 70's Bork and the Chicago school has held sway in courts, but that's changing. So no, I'm not behind - this is why the FTC is bringing this case in the first place.
Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created.
Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider.
Why say you agree when you only go on to disagree with me?
I've bought plenty of things cheaper on other sites. Delivery included. There have been things that were cheaper on Amazon as well. This is why I said it's about average. But there are so many variables at play here (location, items you're looking to purchase, etc) that it might just be easier to agree to disagree.
> Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created.
Those vertically integrated pipelines come with significant cost savings though. That's why they do it. And because it saves them $$$, it then also increases their margins.
> Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider.
Those two arguments aren't mutually inclusive. Other companies might be offering cheaper prices but making a loss in the hope that loyalty will win customers in the long run. Or other corners might get cut that could ultimately lead to that businesses demise, such as not hiring skilled staff, not following health and safety or other local laws, etc. And even if none of the aforementioned is true, it still doesn't mean that Amazon aren't being anti-competitive.
Also "anti-competitive behaviour" applies to how they block other businesses from competing. You cannot be "anti-competitive to the consumer"
At some point you have no choice but to give them a slice of your revenue and some control of your product, lest your access to customers is severely limited.
Kinda like app stores.
It is the exact same thing as is argued by social media companies: they have the right to moderate the content posted on their platforms because it's their platforms. You can do whatever you want on your own site.
Yes, companies cannot influence behavior of people or businesses that have no business relationship with them, direct or indirect. In other words, you are saying that indeed, the only anti-competitive action is sending armed thugs to sabotage your competition. Everything else, every contractual condition, is fair game.
I'm saying that entering a voluntary transaction knowing the terms of the trade does not amount to anti-competitive behavior. Nobody forced you into the trade. Nobody prohibited you from entering the trade.
Entering the trade with clear conditions is voluntary. You could easily just not do business with that partner. Here that would be not using Amazon's marketplace.
Oh OK, so then I am correct under the overwhelming majority position/framework which is the only interpretation that matters for enforcement, which is the interpretation held by the court system.
I am more than happy to accept that concession and only be "wrong" under the minority position that hasn't been relevant for 40 years.
> That's not the policy of Lina Khan and the current FTC
They can make whatever bad arguments they want in court, and lose their lawsuits I guess.
They don't decide the outcome of these court cases.
If anything this strategy is actually harming then, as they make failing arguments that the courts won't listen to.
You do realize that, by this definition, nothing short of fraud or forcing someone into a contract at gunpoint, could qualify as anti-competitive?
They started out as a retailer, and opened up a bunch of their infrastructure to competitors. The idea that they'd make it easy for competitors using their infrastructure to beat them makes zero sense.
Semantically, what company that (Relies on Amazon to operate) couldn't they destroy on a whim?
So the logical response wasn't to assume you were being circular. The logical response was to assume you were inferring Amazon is big enough and capable enough to squash any business.
Aramco? Air Canada? Samsung? Memory Express? Digikey? McMaster Carr? McDonald's? The Big R? Cantillion? Texas Instruments?
"Show me a business" is quite vague
I’m sure Amazon has put a sizable dent in their sales without even really trying.
Amazon now has special search tools for buying fasteners that make it easier to find exactly what you need.
Prices are cheap, risk is high, but prices are cheap.
Easier but they are no McMaster, by a long shot.
If your business depends on potential competitors for it's existence, then being eventually forced out seems like a pretty natural conclusion.
If people keep choosing to reward dishonest cheaters and criminals just to get something for lower cost, we are not in a good place. And either cheating or disguising the true nature of your company is becoming the easiest way to stand out in a commoditized world.
More important than how you vote is how you buy.
Then I still got the wrong part delivered. It doesn’t matter how great the selection tool is, the rule is always: garbage in, garbage out.
Almost never happens like that.
Especially anti-dumping rules are most often just exploited as a tool to get a competitor in trouble.
