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Ok, 20 years of sheer monopoly and yet Amazon can't raise its prices or it will be beaten by other, more specific, retailers, Google and Microsoft. The case for

by fiatjaf 10y ago

Ok, 20 years of sheer monopoly and yet Amazon can't raise its prices or it will be beaten by other, more specific, retailers, Google and Microsoft. The case for antitrust law and State action should fall apart now. https://mises.org/library/anti-trust-anti-truth https://mises.org/library/anti-trust-anti-truth

kuschku 10y ago
Eh, Amazon actually has recently raised prices. Many products are now only available to Prime users, or are more expensive if you search it via Amazon than if you get it linked by someone else.
Klathmon 10y ago
But Amazon can lower their prices and snuff out any threats before they get too big. Not to mention that price isn't the only reason why monopolies are bad. I had a period of about 3 months where Amazon just couldn't deliver to my house. They switched to using their own carriers, and they would just never be able to find my place. I actually had a hard time finding another retailer that would ship to my house for less than double the total price of some of the things I was buying. Plus the (very real) threat that they can just remove an item from their store for any reason (the one that comes to mind is that Amazon doesn't allow anyone to sell chromecasts' on their store. Rokus, Fire Sticks, and various other streaming "devices" are fine, but chromecast is banned completely) means they also have a monumental amount of power to hurt anyone selling through them at a moment's notice. I'm not in a position to say whether or not Amazon is a monopoly, and I wouldn't even know the first thing about solving the problem, but IMO the fact that they haven't raised prices isn't exactly proof that they aren't a monopoly.
- kemayo 10y ago
  Not just Chromecast -- they also completely ban Apple TVs. It's pretty sketchy.
- urs2102 10y ago
  A great example is their Diaper.com fight with their launch of Amazon Mom [0]. [0]: https://www.bloomberg.com/news/articles/2013-10-10/jeff-bezos-and-the-age-of-amazon-excerpt-from-the-everything-store-by-brad-stone https://www.bloomberg.com/news/articles/2013-10-10/jeff-bezo...
- naranana 10y ago
  >I had a period of about 3 months where Amazon just couldn't deliver to my house. And Amazon can also ban you forever from their service, for example if you return too many things in a short period. Imagine if that meant you couldn't buy anything at all because there aren't any competitors.
  - joemi 10y ago
    Loss of selling privileges can be a big problem too, and incredibly hard to fight. The store I work for once lost selling privileges for spurious copyright claims regarding books we had bought directly from large established publishers. Even with the publishers themselves (and sometimes the authors, too) writing on our behalf to state that there were no violations, it still took about two weeks to regain privileges. During a busy season, two weeks is a long time to be without profits for a small retailer.
btilly 10y ago
I wish more people knew the basic economic theory of monopolies. Because virtually all common public arguments, including yours, show abysmal misunderstanding of the issues. First let's start with something that your article got right. Virtually every monopoly is worth more in pieces than it is together. That is because maintaining the monopoly requires having profitable parts of the business subsidize other parts which are running at at unprofitable prices to shut down potential competition. The result is the sum of the pieces of monopolies that were divided by law were worth more than the original monopoly was. And THAT means that a divided monopoly almost immediately COSTS consumers more. So, as your article concludes, saving consumers money in the short run is not a reason to shut down monopolies. This immediately raises the question of why monopolies come around. If a monopoly is worth less than separate companies, why make one? The answer is that a monopoly is worth less than the entire area of business that it would monopolize, but it is worth more than any individual piece of that business. Therefore creating a monopoly is personally profitable to the one who does. OK, with that out of the way, why should we object to monopolies? The answer is simple. Monopolies are about establishing control. In the area that is controlled, the monopoly can make any unilateral decision that it wants. This is really, really bad for innovation. Innovation requires many different players trying many different things. With innovation, in time it is quite possible for consumers to get both better features and more competitive pricing than the monopoly would have managed. Getting rid of the monopoly is essentially always bad for consumers in the short run. But the long run could be a different story? As a concrete example, one contributor to the dot com boom was that the web offered a way to create businesses that Microsoft's monopoly could not squish. As another example, before the breakup of Bell Telephone, customers couldn't even choose what color they wanted for their phone! If they had not been broken up then it is unlikely that we'd have seen the rapid spread and improvement in things like smartphones. The long and short of it is that we should expect (relatively) cheap prices from a monopoly. And saving money is not reason to break one up. Our areas of concern should be continued innovation and availability of customer features.
- meanduck 10y ago
  And I cant believe I have to type this on HN of all places. No one denies that monopolies are risky. In fact this is the argument against anti-trust regulations, which is basically a monopoly granted to very few people (which in practice, means a guranteed monopoly to a colluding subgroup of political class). There are probably more cases of harm done by this monopoly than by corporations monopolies. Also one major difference, Corporations have to earn their monopolies where the political class dont. Only one of these two will not think twice before abusing it. We already have a protection agaisnt monopolies aka free market.
deleted 10y ago
[deleted]

by fiatjaf 10y ago

kuschku 10y ago

Eh, Amazon actually has recently raised prices. Many products are now only available to Prime users, or are more expensive if you search it via Amazon than if you get it linked by someone else.

Klathmon 10y ago

But Amazon can lower their prices and snuff out any threats before they get too big. Not to mention that price isn't the only reason why monopolies are bad. I had a period of about 3 months where Amazon just couldn't deliver to my house. They switched to using their own carriers, and they would just never be able to find my place. I actually had a hard time finding another retailer that would ship to my house for less than double the total price of some of the things I was buying. Plus the (very real) threat that they can just remove an item from their store for any reason (the one that comes to mind is that Amazon doesn't allow anyone to sell chromecasts' on their store. Rokus, Fire Sticks, and various other streaming "devices" are fine, but chromecast is banned completely) means they also have a monumental amount of power to hurt anyone selling through them at a moment's notice. I'm not in a position to say whether or not Amazon is a monopoly, and I wouldn't even know the first thing about solving the problem, but IMO the fact that they haven't raised prices isn't exactly proof that they aren't a monopoly.

kemayo 10y ago
Not just Chromecast -- they also completely ban Apple TVs. It's pretty sketchy.
urs2102 10y ago
A great example is their Diaper.com fight with their launch of Amazon Mom [0]. [0]: https://www.bloomberg.com/news/articles/2013-10-10/jeff-bezos-and-the-age-of-amazon-excerpt-from-the-everything-store-by-brad-stone https://www.bloomberg.com/news/articles/2013-10-10/jeff-bezo...
naranana 10y ago
>I had a period of about 3 months where Amazon just couldn't deliver to my house. And Amazon can also ban you forever from their service, for example if you return too many things in a short period. Imagine if that meant you couldn't buy anything at all because there aren't any competitors.
- joemi 10y ago
  Loss of selling privileges can be a big problem too, and incredibly hard to fight. The store I work for once lost selling privileges for spurious copyright claims regarding books we had bought directly from large established publishers. Even with the publishers themselves (and sometimes the authors, too) writing on our behalf to state that there were no violations, it still took about two weeks to regain privileges. During a busy season, two weeks is a long time to be without profits for a small retailer.

btilly 10y ago

I wish more people knew the basic economic theory of monopolies. Because virtually all common public arguments, including yours, show abysmal misunderstanding of the issues. First let's start with something that your article got right. Virtually every monopoly is worth more in pieces than it is together. That is because maintaining the monopoly requires having profitable parts of the business subsidize other parts which are running at at unprofitable prices to shut down potential competition. The result is the sum of the pieces of monopolies that were divided by law were worth more than the original monopoly was. And THAT means that a divided monopoly almost immediately COSTS consumers more. So, as your article concludes, saving consumers money in the short run is not a reason to shut down monopolies. This immediately raises the question of why monopolies come around. If a monopoly is worth less than separate companies, why make one? The answer is that a monopoly is worth less than the entire area of business that it would monopolize, but it is worth more than any individual piece of that business. Therefore creating a monopoly is personally profitable to the one who does. OK, with that out of the way, why should we object to monopolies? The answer is simple. Monopolies are about establishing control. In the area that is controlled, the monopoly can make any unilateral decision that it wants. This is really, really bad for innovation. Innovation requires many different players trying many different things. With innovation, in time it is quite possible for consumers to get both better features and more competitive pricing than the monopoly would have managed. Getting rid of the monopoly is essentially always bad for consumers in the short run. But the long run could be a different story? As a concrete example, one contributor to the dot com boom was that the web offered a way to create businesses that Microsoft's monopoly could not squish. As another example, before the breakup of Bell Telephone, customers couldn't even choose what color they wanted for their phone! If they had not been broken up then it is unlikely that we'd have seen the rapid spread and improvement in things like smartphones. The long and short of it is that we should expect (relatively) cheap prices from a monopoly. And saving money is not reason to break one up. Our areas of concern should be continued innovation and availability of customer features.

meanduck 10y ago
And I cant believe I have to type this on HN of all places. No one denies that monopolies are risky. In fact this is the argument against anti-trust regulations, which is basically a monopoly granted to very few people (which in practice, means a guranteed monopoly to a colluding subgroup of political class). There are probably more cases of harm done by this monopoly than by corporations monopolies. Also one major difference, Corporations have to earn their monopolies where the political class dont. Only one of these two will not think twice before abusing it. We already have a protection agaisnt monopolies aka free market.

deleted 10y ago

[deleted]