17 ms·

The case for ending Amazon’s dominance

320 points by imartin2k 9y ago

p0rkbelly 9y ago
Amazon accounts for 4% of ALL retail sales. Where are the calls about Walmart? I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. Dominance is not illegal. Nor technically is a monopoly. Using a monopoly illegally is. Having said that we would have to fundamentally change the definition of a monopoly in order to break up the party responsible for 4% of the market -- and have a record of reducing prices.
- deleted 9y ago
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- voidlogic 9y ago
  When you compare Amazon to say Walmart or Google, I think the real consideration is that the later two have narrow verticals of dominance and Amazon's dominance spans e-retail, compute, storage, etc and is expanding. Having one entity control 60% of 50 verticals is much more dangerous for the economy anti-competitively than one company that controls 80% of say two verticals. The reason is simple they can use their multi-vertical footprint to apply pressures on a small competitor that a large competitor who was limited to a single vertical could not.
  - beeflaw 9y ago
    I wouldn't be surprised if the shareholders eventually got their way and have Amazon split its profitable businesses (like cloud infrastructure) from the unprofitable ones.
    - ahtu123 9y ago
      Alphabet is already taken so I guess they'll be the Numeric Table or something.
      - MaxBarraclough 9y ago
        A pity 'Bigtable' is also taken.
  - moosekaka 9y ago
    I don't understand why the author and many here consider splitting Amazon only AFTER they display behavior that is harmful to consumers (such as exorbitant prices and/or poor service). Reading his article, he seems to be saying Amazon does everything good for the American economy and consumers, and he's against false positives (wrongly calling out anti competitive behavior). But at the very last paragraph he suddenly waves his wand and concludes "Amazon is too dominant, we should split them into two, after all two Amazons would be better then one". It just seems like he forgot or got lazy to consider the pros and cons of having two smaller Amazons for the sake of it.
  - dpark 9y ago
    Walmart has a narrow vertical? In many areas, Walmart is the main place people shop for everything, from groceries to clothes to electronics to tools to hobby equipment. I would also not really consider search and ads narrow verticals. Those are broad industries that drive and direct large scale consumer behavior.
- nsnick 9y ago
  The mistake you are making is that you are only looking at the harm that monopolies do to their competitors. You should also look at the harm that monopolies do to consumers. If you are a monopoly you can effectively set the price of whatever you are selling. Just operating is using your monopoly.
  - beeflaw 9y ago
    Amazon has been consistently losing money on retail since its inception. If they raised prices, they would lose their dominant position. The main reason you don't see more competition is that retail (online or offline) simply isn't very profitable to begin with.
    - rocqua 9y ago
      Such selling at a loss is really weird from an anti-trust perspective. As a worst case, it allows a company to 'invest' in market share by selling at a loss to strangle the competition. Once this is done, they can entrench themselves and raise prices. If you only look at anti-trust as consumer protection, the above scenario only becomes problematic when its to late. That said, lines are hard to draw. When is a company lowering prices to strangle the competition and when is the competition being strangled a side-effect of efficiency? Is it okay if amazon intends to always stay cheap, and use retail as a loss-leader? What should happen when supermarkets dampen price fluctuation, taking a loss when prices spike to appease their customers. It's a hard problem, but we should be careful about companies operating at a loss just to strangle their competition. However, should this come at the cost of companies that strangle their competition by just being more efficient?
      - beeflaw 9y ago
        "Once this is done, they can entrench themselves and raise prices" If that strategy really worked in the long run, you would see countless examples of it. So called "price dumping" can actually be illegal, but it rarely needs to be enforced.
      - zdragnar 9y ago
- j9461701 9y ago
  I think you hit upon a really important idea. Amazon has been investing in itself for years, and focusing on longer term growth and success even at the cost of short term profit maximization. Which is... exactly what we as a society want. We want companies to think long term, to be investing in innovative new ways to succeed and relying on growing outward and always trying to be on the cutting edge. All that stuff is great, far better than companies run by finance degree holding businessmen that haven't invented anything in 3 decades and keep existing purely through rent seeking or quarter-to-quarter profit pumping. To bring Amazon down now, before its had a chance to reap the benefits of its prudence feels like the worst possible signal we could give the market. It'd basically be saying "Don't bother actually focusing on technical improvement, because if you ever do get really big as a result the government will step in and take it away from you". Though the article does kind of share this sentiment, so kudos to Tom Harford: >If that is a worrisome state of affairs — and it should be — then Amazon is the shining counterexample. The online retailer’s strategy is driven not by short-term profit but by investment, innovation and growth. If only there were a few more companies like Amazon, capitalism would be in a happier spot. I suppose the core disagreement then becomes I don't think the threat of Amazon becoming abusive is worth the negative signal going after them would generate, and he does. I'd be interested in reading a 2nd article from him that delves more specifically into this part of the issue.
  - aaron-lebo 9y ago
    You ever seen that Swole Bezos picture? He's that doughy, slightly nerdy guy who transformed himself into a hard assed cutthroat. This is Amazon. Bezos obviously has an incredible nose for business, but he's mainly shown that he's not incompetent and just by being that he's run circles around others. I've had too many bad experiences with Amazon that it tells me that his genius businessman mythology doesn't extend to the details. Went searching for a new smartphone recently. Was seconds away from spending $300 for what seemed like a new device only to see review after review from people who had been shipped poorly refurbished phones (shipped by Amazon) that would break a few months later. There's too much stuff like that. That's their own damn site, an Apple product, and it shows that people are getting regularly ripped off and they are powerless to stop it (or won't). I see that and I see them getting into groceries and healthcare and it scares me. How can they possibly keep quality up? There's too much mythology there, too much obvious greed, and not enough care that they appear to be building the world's greatest monopoly and we're patting them on the back.
- kerkeslager 9y ago
  > Where are the calls about Walmart? Are you seriously saying you've never heard anyone call for ending Walmart's dominance? > I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. The big picture for involves looking outside of the myopic view of growth, momentum, and investments, and seeing how it affects people. Growth, momentum, and investments are only a good thing when the gains benefit society, which only happens if they occur throughout a diverse market. Growth, momentum, and investments for Amazon only benefit Amazon, and if they're only in Amazon, it's at the expense of the rest of the market. > Dominance is not illegal. Nor technically is a monopoly. Using a monopoly illegally is. The implication that companies with monopolies don't use them, in direct opposition to incentives, is incredibly naive. Also, this is a conversation about policy should be, so telling people what policy is, isn't really very relevant. > Amazon accounts for 4% of ALL retail sales. > Having said that we would have to fundamentally change the definition of a monopoly in order to break up the party responsible for 4% of the market -- and have a record of reducing prices. On what basis have we decided that "retail sales" is the most relevant market segment? Why not "book sales" or "online sales"? It should absolutely be concerning to us that Amazon is dominant even in these smaller markets, with little hope of competition.
  - Erik816 9y ago
    That is not a naive understanding of American antitrust law; it's perfectly accurate. It's not illegal to have a monopoly, it's illegal to abuse your monopoly position to harm consumers. This is in contrast to EU antitrust law. And yes, this is what I think the policy should be. We don't want to punish success. We want to protect consumers.
    - sbov 9y ago
      Which is odd, considering the plain language of the Sherman Anti Trust act not only makes monopolies illegal, but makes pursing a monopoly illegal. Has there been any laws passed that override this, or have the courts been unwilling to enforce the law as it's written?
      - 9y ago
- codingdave 9y ago
  > Where are the calls about Walmart? Everywhere you look. They have been criticized for decades about their business practices, the way they treat their employees, their usage of scale to crowd out small-town retail, then jack up prices once they are the only place left in town... all because they are big enough to make it work. If you haven't heard complaints about Walmart, you haven't been listening.
- coldtea 9y ago
  >I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. Why? As a an a-priori assertion?
  - wpietri 9y ago
    Agreed. I'm a big fan of free markets. But the modern tendency toward a sort of fundamentalist capitalism is repulsive. A good way to make a profit is to make something people need at a price they can afford while paying your employees well. But you can't work that backwards. Not everybody making a profit is creating value or contributing to society. If you don't have a conscience, or even if you're just not thinking very hard, it's easy to privatize a gain and socialize the losses. It's our job as citizens to make sure that is minimized.
    - Digit-Al 9y ago
      Unfortunately, If you make something people need whilst paying your employees well you'll have to charge more than your competitors for it and most people simply will not buy it.We all pay lip service to wanting employees to be paid well (after all, we're all mostly underpaid employees ourselves) but the reality is that most people just want to stretch their meagre wages as far as possible. Which means compromising on quality, and ethicality.
      - wpietri 9y ago
        That can happen, but it's not the only thing that can happen. Look, for example, at the way Toyota easily beat American carmakers for decades. "Respect for People" was at the core of the Toyota Production System, and by that they meant both workers and customers. Their extensive investment in workers let them create better products for less money. Their refusal to lay people off cost them in the short term, but gained them substantial competitive advantage in the long term. This only becomes more true the more we automate things. If machines are doing the dumb stuff, that only leaves smart stuff. And unhappy, underpaid people don't do smart stuff very well. For those interested in how a different philosophy can lead to a deep competitive advantage, check out the This American Life episode on NUMMI: https://www.thisamericanlife.org/radio-archives/episode/561/nummi-2015 https://www.thisamericanlife.org/radio-archives/episode/561/...
- wpietri 9y ago
  > Dominance is not illegal. This is tautological. Legality the wrong question to ask when we're talking about what laws we need. A good question to be asking is whether net harm outweighs net benefit. Another is whether we can get the same benefits with less harm.
- Noos 9y ago
  Walmart carries a very narrow range of goods, and leaves tremendous room for local businesses to still exist. Amazon will compete with everything at any time. Walmart doesn't carry criterion releases or foreign films, and there is potential for local art movie stores or houses to exist to fill the need. Amazon carries movies at a much lower price than a local business ever could, and streams them too, again at lower prices than a theater. They try an get their fingers into everything, even service-based businesses, while walmart just does low prices on a selection of goods.
  - sib 9y ago
    Sure Walmart carries Criterion series films: https://www.walmart.com/search/?query=criterion%20collection%20blu-ray&typeahead=criterion https://www.walmart.com/search/?query=criterion%20collection...
obblekk 9y ago
This article concludes by saying "... wouldn't two amazon's be better than one?" But I didn't find any case made for this claim in the article.
- IlGrigiore 9y ago
  The point of having a direct competitor to Amazon is to limit the possible actions they could do. Right now Amazon is well behaving and its supported by the customers. However, if Amazon were to change its actions, we would have a near monopoly that is not positively affecting people. Therefore, the theory of the author is to limit the power of Amazon by entroducing a competitor that would challenge the dominant position instead of waiting for the negative outcome.
  - prepend 9y ago
    Amazon has many direct competitors. It’s likely that this is why they are behaving so well. But my guess is just Bezos’ philosophy as a driver.
- Edmond 9y ago
  maybe the article didn't lay out a case but that question should really be viewed from the perspective of more vibrant competition in the marketplace. We know in general that competition is good both for consumers and in the case of the technology sector competition is good for innovation. I think the question applies to the likes of facebook (find me someone who is truly happy with facebook as a service, the whole world's social media needs cannot possibly be well served by the ideas of a handful of people in California), google..etc. There is also the question of economic equity (geographic for instance), there is a direct relationship between the concentration of market share and concentration of wealth.
sgwealti 9y ago
If anything it should be split into 3 companies - retail, logistics, and AWS.
- beeflaw 9y ago
  Amazon logistics without retail is pointless, retail without AWS (etc) would be highly unprofitable.
deleted 9y ago
[deleted]
matte_black 9y ago
This article is written by someone who probably holds a short position in Amazon or was badly burned by such a position. There are companies out there with much more dominant positions in industries and few are calling for their end.
dpweb 9y ago
Products are commodities and they often do not win on price before shipping. Shipping is the secret sauce. Their ability to ship at lower costs. I used to prefer ebay, prices are better, but after 2day shipping, you cant go back. I can start an online retailer tomorrow, but i cant ship a package for less than $3. China too. I bought an iphone case for 80 cents, problem there you have to wait 3 weeks but their shipping too also government subsidized. You wont find any huge corporation that wasnt somehow subsidized with public money.
- ghaff 9y ago
  As I said in a prior discussion, a broad catalog plus pretty predictable 2-day shipping was a real eye opener for me. I first got Prime mostly for the video because Netflix had just started charging for it separate from their DVD service. But I soon realized that I could order a broad assortment of items and get them before I'd probably have gotten around to going to the store anyway. The fact that I travel a fair bit and can reliably order things at a time when I'll be home is another big plus.
- dingaling 9y ago
  > but after 2day shipping, you cant go back Maybe it's a US-market issue, but I don't understand why Amazon is lauded for two-day shipping as if it is unique. They don't have any particular delivery logistics genius except bulk-purchase discounts from the carriers. The 'Amazon Prime' air cargo fleet is leased from an industry-standard cargo airline, nothing unique or exclusive. And they make silly errors that show how their shipping system works; they won't ship lithium batteries ( or even DSLR cameras ) to Northern Ireland even though they have a logistics warehouse here. Because the inter-warehouse backhaul is via Royal Mail, who won't carry hazardous items.
  - Spooky23 9y ago
    They made massive capital investments that allowed Amazon to bypass carrier routing. So they use government subsidy to deliver to expensive addresses (USPS), UPS to handle exceptions, (and to tie up capacity from competitors) and job out delivery to cut rate services whenever possible. Few other retailers do that. A retailer like Willams Sonoma has one warehouse in northern Mississippi and one in Nevada, close to UPS/Fedex hubs. They probably get 3 day delivery for 50% of orders, but can not commit to anything.
Cknight70 9y ago
Would there really be any benefit from splitting up Amazon right now though? Assuming there were two symmetrical Amazons, both focusing on consumers, innovation, and growth, the only way I can see either being competitive is to cut corners. In my opinion, there would be a much more compelling reasons to split up Amazon if they ever begin to focus on profits.
peoplewindow 9y ago
The author laments the rarity, excellence and thus dominance of companies like Amazon, although this article could have been about Apple or Google too. Rather than ponder to what extent if any government regulation is the answer, it'd be better to ask why Amazon is so dominant and why competitors have such a difficult time competing. This isn't specific to Amazon. "Disruption" is a word that has come to mean tech firms, which we can roughly define as firms founded by computer programmers that make heavy use of computers, entering a new market and rapidly out competing the incumbents. These firms start with no particular competitive advantage and frequently have major disadvantages. When Bezos started selling books he had no knowledge of the books business, no warehouses, no logistics operation, no business relationships and no capital beyond his own savings and $300k his parents invested in the business. His only edge was that Bezos had a computer science education and knew programming. Despite starting with literally nothing, Amazon now controls most of the entire book sales market. There was a story on HN recently about how Barnes and Noble is basically giving up and laying off employees. Same thing for Steve Jobs and phones or Google and mapping. All relatively mature industries, all obliterated the incumbents (well, in phones the incumbents only survived by adopting Android wholesale). But Amazon is the best example because retail is such an old and established industry. I've come to think that a big part of this is down to the different way programmers think, vs regular 'business people'. Any of the existing retail giants could have built an Amazon. Bezos didn't have any unique eureka-moment patent or other moat. And they all started way ahead of him in having warehouses and distribution networks. But they didn't, they never successfully did that, I don't think they ever could, because they were run by people who weren't software developers. There are two big parts to this: 1. Understanding software projects and software developers. 2. Clarity, precision and energy of thought. (1) is obvious enough, people with a business background can't judge the skill of developers or quality of software directly so they have to rely heavily on proxies that aren't very good - things like "is this project hitting its projected deadlines" which projects never do, or "what are other companies doing" which creates herd behaviour and eliminates edge, or "is this solution backed by IBM or Microsoft". They tend to make basic errors like saying, well this company over in India says they'll write the software we need for 1/10th the cost of our own development team, and software is software so that's a great saving! And they don't understand the vast gulf in skills and quality of the possible outcomes, or how critical quality tech is to their business. (2) is more controversial, but I can't escape the feeling that programmers tend to think a lot more clearly and rigorously than many business people. Writing software demands intense focus and concentration for long periods, very precise thinking, and computers cannot tolerate internally inconsistent thinking. Way too many people simply cannot or will not actually think things through in detail. Their thinking is often vague, contradictory, shallow and they are constantly looking for clever ways to get out of thinking at all, like by outsourcing their thought to consultants or repeating buzzwords they don't really understand (IoT, AI etc). I'm not arguing that programmers are incapable of self delusion, woolly thinking or anything like that - I've seen plenty of dumb behaviour from supposedly smart people. It's more like maybe they can do it, if they are reasonably free of biases and are given enough time and are motivated enough. But if it's true that programming improves your general capacity for thought then we should expect to see tech firms systematically out-compete every firm in which the playing field is level and not radically tipped in favour of incumbents by regulators and governments. Retail is not very regulated so no surprise that Amazon is systematically taking over. Edit: SpaceX is a better example of Amazon-style disruption than Apple. Musk went from knowing computer programming and nothing about space at all, to radically disrupting the existing aerospace industry with reusable rockets, in less than 20 years.
rweba 9y ago
The author does not offer ANY evidence for Amazon's supposed "dominance". How exactly is Amazon dominating? What percentage of online retail sales does Amazon have? What percentage of TOTAL retail sales (online and offline)? And more importantly, how is Amazon's market position harming consumers? It's remarkable that Tim Harford wrote this entire article without citing a single figure or statistic. What seems to be going on is that there is a PERCEPTION that Amazon is totally dominating and monopolizing retail, but retail is so big that you can grow massively and have revenues of a $100 billion without coming close to being a monopoly. Points to note: (1) Amazon has no MOAT. Anyone can set up shop and start delivering things to people. There is no switching cost. (2) Amazon has MASSIVE well-funded competition in all of its areas: online retail (Walmart), Cloud (Google), video streaming (Netflix), Books (the big publishers who own the content) (3) You can live quite comfortably and cheaply and conveniently get almost everything that Amazon has to offer without having to use Amazon if you don't want to (books, retail items, cloud services, etc.). This is not the case with pure monopolies like utilities, or monopolies like Intel or Microsoft where completely avoiding them is a big pain for the average person.
- fnl 9y ago
  Fully agree to all but (3). From personal experience (here in Spain), every year it is getting more difficult for me to not buy from them (yes, I "religiously" avoid giving companies I consider harming society a dime, if I can...)
  - sah2ed 9y ago
    How is Amazon harming society? I don't see how they harm consumers since either way, consumers are the biggest winners of those low prices. If you are referring to self-published authors distributing ebooks being forced to take 35% on < $3 sales and 70% on > $3 sales on their platform; or merchants leveraging their reach to sell to a larger audience being undercut by Amazon on price then yes, they are harming society in some way. But even their "harm" is as debatable as the "harm" of Henry Ford's mass produced cars displacing horse-drawn carriages mostly because they were more efficient at transporting people over the same distances as horses. https://www.quora.com/How-long-did-it-take-to-get-horse-drawn-carriages-off-the-roads-in-lieu-of-cars-1 https://www.quora.com/How-long-did-it-take-to-get-horse-draw...
prepend 9y ago
I remember a little bit of debate and a lot of consternation in 2002/2003 on whether a preemptive strike on Iraq was justified given their likelihood of having/using WMD. And in Minority Report how the theme was about how convicting on precrime was a right violation. But has society really shifted thinking that acting based Amazon’s potential future dominance is a substantial discussion? Our predictive ability is not very accurate to be able to act preemptively (eg, no WMDs in Iraq). So ending Amazon’s pre-dominance seems rather inefficient and bad for society.
deegles 9y ago
I don't believe that most investors really have a grasp on how "long term" Bezos' thinking is. It's not multi-year, it's multi-decade... maybe even multi-century[0]. This is all just speculation from his involvement with the Long Now Foundation, but one of their goals is to foster long lived institutions... I believe that this is Bezos' vision for Amazon and that investors hoping for it to stop its self investment and growth are in for a very long wait. [0] http://www.wideopencountry.com/there-is-a-10000-year-clock-under-construction-in-west-texas/ http://www.wideopencountry.com/there-is-a-10000-year-clock-u...
- moosekaka 9y ago
  Bezos dream of shifting all heavy industry and mining to the asteroids would be so beneficial to humanity and the planet, that whatever short term pain (short as in timescale of decades) to either current incumbents business performance or consumer choice should be balanced against this promise.
dpweb 9y ago
OP is dreaming. The US has perhaps never been more pro-business, hands off, and unwilling to do any anti-trust, than they are now. They will not be breaking up any companies any time soon. A 1990s Microsoft anti-trust case, you wont see. In fact I think we’ll see corporations increasing their influence. acting as banks, keeping private armies, controlling political affairs.
- the-dude 9y ago
  And the MS case resulted in basically a flick on the wrist, nothing else.
  - maxxxxx 9y ago
    It definitely slowed them down a lot. Things could be looking very different if there had been no action.
    - the-dude 9y ago
      Like what? Pretty baseless claim without examples.
      - maxxxxx 9y ago
        For example they had to decouple their browser from the OS. In Europe they were forced to offer alternative browsers. I also wonder if their investment in Apple was at least in part motivated by them being investigated. There may be no Apple today without that.
        guitarbill 9y ago
        I think the EU was right to do it, because they realised how important the web is. But we didn't really feel the effects. Normal people still used IE, until they didn't. In the end, I think Microsoft brought the demise of IE on themselves, because of how terrible it was. They couldn't undo that reputation, not even with Edge, which still feels clunky compared to FF or Chrome. So this example is ambiguous w.r.t. hands-off vs. hands-on regulation at best.
dawhizkid 9y ago
I really hope Costco steps up and saves itself from Amazon.
- ako 9y ago
  If they do, probably by reducing costs, it will likely be at the cost of manufactures, farmers producing the goods, and employees.
  - dawhizkid 9y ago
    I mean they've completely underinvested in technology and new experiences. The in-store experience and the website feel like they haven't changed in 20 years. Maybe that is part of the Costco charm, but the "if it ain't broke don't fix it" attitude is going to haunt them if they don't change. Lots of headwinds in the next decade or so: younger consumers aren't driving as much (i.e. to big box stores with giant parking lots in the middle of suburbia), they are moving from suburban to urban centers, they're having fewer kids, buying anything online including perishables has become easy, etc etc.
- ars 9y ago
  Not a chance. Costco is actually heading toward failure, not success. People want to shop online, people want to at the very minimum look up prices online. People want to just go in the store, get what they need, and get out. But Costco keeps moving things because of their "treasure hunt" atmosphere" (to force people to go searching) and "store experience" that they are trying to cultivate. It works - for now. Until it won't. Low prices won't save them forever. Costco is on the record saying they refuse to have online shopping because they want people in their stores having a "treasure hunt". Costco has a record of every item a member bought - it would so very very very easy for them to make an online "reorder this" shopping list. And a "you might like" section by data mining and correlating with other shoppers. They have so much potential, but they are going to be like Sears, and they are going to blow it.
OscarTheGrinch 9y ago
I've tried supporting the little guy with my online purchaces, and been ripped off several times, whereas Amazon has always put things right. Do we really want to go back to the wild-west days of online retail?
- moosekaka 9y ago
  Unless the little guys were the original creators of whatever wares you were purchasing from them, their role in the value chain was merely that of a middle man. In that case, what moral, economic or societal benefit would come from purchasing from the little guy vs a giant retailer?
kemiller2002 9y ago
I have a little different take on the whole Amazon is too big argument. My family has owned small businesses for over 40 years. My dad and I have a vastly different opinion of Amazon. My dad is constantly frustrated by them, because its "cutting into our business". We simply can't compete on price on some items, and people choose not to buy products from us when they can just purchase them and have them shipped home. Now this isn't a poor us, feel bad for us statement. Like I said my opinion of them is vastly different. I want them around. I need them around. They make logistics for us a 1000 times easier. In 3 clicks I can get items ordered that we need and not have to worry about it. (Need a new storage rack? BAM! Be here on Tuesday? We need a new printer ribbon? Phone camera + Amazon app = I have the exact one I need to replace.) I hear retailers largely complain about them, because they are taking away business that they have come to rely on. That's not Amazon's fault; that's the business' fault. This is no different than the Walmart's, Barnes and Nobles (remember when there were small bookstores?), etc. of the world. Amazon is different, because it's threatening them too. Amazon is making people realize that they need to be constantly searching for new products and new sources of revenue, but the truth is that they should have been doing this all along. Literally every time I walk into the store, I talk to the manager and ask, "What are we doing to move forward?" Amazon isn't what should be scaring people, it should be the fact that they've been asleep at the wheel not realizing they are driving of the road. My point is that competing directly with Amazon is stupid, but so is competing with any other large dominant company. They don't have a monopoly on anything, it's just that their presence is more widely felt by a larger number of people at the same time.
- JonnyNova 9y ago
  Their monopoly is more abstract: they have a monopoly on convenience. They ensured their product selection covers a wide variety of common objects that most people end up buying and streamlined their checkout process (they had the patent for 1 click checkout for 20 years) to reduce as much friction as possible to ensure that carts would not be abandoned.
  - mathperson 9y ago
    I'm frustrated that is patentable
RestlessMind 9y ago
As much as I believe in free markets and less regulation, I believe we do need a law / regulation which disallows companies to use profits from one business to subsidize completely unrelated business while undercutting economics of the second one. For startups, they should be allowed to subsidize low prices only for a specified duration of time or until they hit a threshold of marketshare in a given market. So Amazon should not be able to use AWS profits to subsidize retail, when other retailers don't have such cushions. Google should not be able to use Ads profits to undercut economics of browser or mobile OS. Uber/Lyft should not be allowed to capture more than 5-10% of SF/NYC taxi market unless they are profitable there. Just to be clear - if someone can upend an entire business while being profitable, they should be allowed to flourish (eg. Netflix with rental movies, Apple with phones). One possible exception - if there is no established business in a field and someone wants to move the technology forward there, they should be given some exception. So SpaceX can experiment with their rockets and Google can experiment with self driving cars because they won't be competing unfairly with any competitors. Finally, I really hope EU adopts regulations along these lines. I have no hopes from US or China.
- cortesoft 9y ago
  This would be really hard to enforce. A big company could just invest in a startup, and have that startup spend money to earn market share while not being profitable.
  - RestlessMind 9y ago
    I covered that as well - startups should be allowed to subsidize their operations only for a reasonable length of time and/or until their market share is below a certain threshold. (So Uber should be allowed to operate in a market without profits until they serve, say, less than 8% of taxi rides).
- Turing_Machine 9y ago
  Hmmm... so under your plan would a bricks and mortar retailer be allowed to offer (say) free air conditioning or heat for customers who come in the store, or would they be required to charge for that? How about lighting? If so, how is offering free air conditioning to attract customers different from Google offering free search to attract customers?
ourmandave 9y ago
Related: Scott Galloway's take on breaking up Amazon. https://www.youtube.com/watch?v=1ebKI4x_k8A https://www.youtube.com/watch?v=1ebKI4x_k8A
fnl 9y ago
This article misses the real issue of "the Amazons" of today: The low-wage workers Amazon has built it's empire on (or, the "gig-economy" of others), and the massive scale, legal tax avoidance schemes only companies with global scale can play with. If anything, companies of a certain revenue level should be taxed by (localized) revenue, not (globalized) gains. That alone would already go some way to put SMEs on a little more equal footing. Addendum: In fact, we should tax all companies by a progressive revenue scale.
- p0rkbelly 9y ago
  The hourly employees are paid significantly more than Walmart/Best Buy/Target employees. In my home state, they start at $14-$15. About 2x Walmart.They also have programs for veterans to make even more. They will also pay for community college degrees for those employees -- and it doesn't have to be related to their job nor do they have to stay at Amazon. I believe only in certain fields though, like STEM degrees.
  - fnl 9y ago
    Well, those are not really SMEs with high quality jobs either... I'll happily accept your word that Amazon's sweatshops are better than X's sweatshop - but that just makes more shitty jobs...
    - guitarbill 9y ago
      Ah yes, the world without "shitty jobs" utopia. "Shitty" as compared to what? Who should do those jobs? Robots? Assuming what parent said is true, except for paying employees much more than competitors and education options, what should they do in your opinion to make the jobs less "shitty"?
      - fnl 9y ago
        Doesn't matter, that bright future is an Utopia, as you already correctly derived. So the question becomes, how to avoid the opposite, the dark future of extreme inequality that our world is steering into. Which brings us back on track: Taxing corporations by revenue, not gains, thereby allowing for a better distribution of wealth.
amarant 9y ago
Meh, Amazon does good things, many different good things, so we must stop them? If they start abusing their position we can have this discussion, but until then I'll enjoy the good they provide instead.. This seems more like jealousy they're doing so well. Screw that
tonyedgecombe 9y ago
I'm not convinced, I stopped buying from Amazon and haven't had any problems finding other suppliers.
aj7 9y ago
“Yet for all this, I am deeply uneasy about Amazon’s apparently unassailable position in online retail.” I have found online ordering at both Costco and Walmart to be easier and much more efficient than Amazon. NewEgg, Lowe’s, Home Depot are all websites I visit more than Amazon. Part of this is I am not much of a media consumer. But all, I do not have time for distractions and “suggestions” when online purchasing.
- zanny 9y ago
  Thinking about it if anything other services are finally catching up. I've ordered as much stuff in the last 2 months from walmart and best buy as I have from Amazon despite being a prime member. There isn't really as much of a network effect to Amazon they can abuse. For a lot of people, the day they jack up prices to exploit their position is the day a lot of people tab over to walmart or target.com and buy the thing from there instead.
ekglimmer 9y ago
Not sure if it was intentional or not but I enjoyed the irony of putting two Amazon links to the book "The Box" directly in the article.
- crtasm 9y ago
  As well as his own book at the end of the piece; be the change you wish to see and all that.
moocowtruck 9y ago
please no, amazon makes life better, saving me so much time to focus on other things.. i do NOT want to go back to the time before that
skookumchuck 9y ago
Any other country would love to have a company like Amazon. But the US wants to tear it apart.
austenallred 9y ago
Maybe I’m alone in this, but I feel like if you’re going to break up a company with antitrust regulation you should at least be able to point to a way they’re abusing their power or are making a worse experience for customers. The article goes as far as to admit that Amazon is currently not doing anything wrong. Should we really seek to regulate away hard-earned (and valuable!) advantages because they make it possible to abuse the position? Surely we should wait until they’re actually abusing it? As an aside, I can’t think of any advantage Amazon has that wouldn’t open up opportunities for a competitor should they start to abuse them. That’s the goal of capitalism, in a sense; you have to be great or people just go elsewhere. Seems odd to fight against that.
- cmurf 9y ago
  I do not think it is good public policy to wait until companies are abusing their power before something is done about their size; that suggests the problem is not size, but behaviors which should already be illegal if they're wrong regardless of size. Are they a natural monopoly? If so they should be regulated as a monopoly. If they aren't a natural monopoly, then why is the market not more competitive; and why is it wrong for policy to create a competitive environment? And isn't there an opportunity cost in every case, even if you don't know what it is? What businesses aren't being created because of Amazon's sheer weight? Many of these questions are asked and answered (not entirely satisfactorily in some cases) in the case of Standard Oil.
  - wpasc 9y ago
    Taxpayer dollars and regulators' attention are rival commodities. There are plenty of monopolistic/oligopolistic companies and industries that merit examination and reform much, much earlier than Amazon because they currently are exploiting their market position (Chicken companies, Monsanto, etc.) If no mono-/oligopolies existed that were abusing their power, then maybe our government could talk regulation Amazon, but still you'd have to make a strong case. I think it's a tough sell to have an inefficient entity that does not have to compete in a corporate survival sense (the government) tell a very efficient entity that has seen many similar "monopolies" fall (e.g. microsoft) to act differently.
indubitable 9y ago
For some interesting context on "Amazon's dominance", in 2017 they managed a total marketshare of 4% of retail. Surprisingly even if we restrict it to e-commerce only, they 'only' achieved 44%. [1] [1] - http://www.businessinsider.com/amazon-captured-4-of-us-retail-sales-in-2017-2018-1 http://www.businessinsider.com/amazon-captured-4-of-us-retai...
drawkbox 9y ago
Amazon re-invests nearly everything back into the company, that is to be desired and they deserve to win because of it. Competing with them is hard due to this intense research and development investment culture they have. It would be hard to claim they are a monopoly with Wal-mart out there but also in cloud computing, there are many competitors. Amazon just knows how to develop not only products but markets for their product. Amazon has helped small to medium retailers sell on Amazon and small to medium development/technology companies compete with infrastructure. Amazon will hopefully disrupt healthcare with their new venture with Berkshire (who owns Geico and should make healthcare/insurance more consumer focused like auto insurance) and it is a welcome initiative. They might even solve the fixed pharmaceutical pricing market.
bahmboo 9y ago
Amazon is a convenience not a monopoly, not even close. They have 4% of the retail market share.
xg15 9y ago
I think a good criterium for antitrust applicability (which the article implicitly mentions) is potential for damage: Even if a company doesn't hike prices, cut quality or blocks customers right now, how easy could they do this and how large would the damage to society be? I think by that metric, Amazon (and others) should ring some alarm bells: If Jeff Bezos woke up tomorrow with an irrational hatred of redheads, he could immediately decide that his company should stop doing business with any redhead and denand that any partner company does the same - or they, too, will be kicked off Amazon. That would probably put redheads at a severe disadvantage in day-to-day activities pretty quickly. Another thing I haven't seen discussed so far is creating sub-markets within your product. E.g., in the market for smartphone apps, Google and Apple are not large competitors or even monopolists, they are the government. They have full information about each market participant, can subject all participants to arbitrary regulations and instantly sanction players who don't confirm. Except, unlike an elected government, they are not required to justify the regulations, make them fair or even make them completely public. Im kind of surprised such "sub-markets" seem to be completely unrelated so far.
djhworld 9y ago
It's a tough one. I've been an Amazon Prime customer for a few years now and notice my buying habits centralise further and further on Amazon. The main "selling point" for me, and this is where Amazon's dominance probably doesn't help things, is they own every facet of their distribution chain. So when they say on the website "guaranteed delivery tomorrow!" I can be certain that the item will arrive tomorrow. Before Christmas last year I needed to get a thunderbolt to HDMI adapter for my Mac so my family could play a game, Amazon got that to me on Christmas Eve. All turned around within the space of about 18 hours. Additionally the Amazon lockers make it simple for me to pick things up on the way home from work (there's one just outside my tube station). I'm not sure what other businesses can do to compete really, Amazon isn't necessarily always the cheapest place anymore, but they offer the convienience - and I haven't seen another business be able to match, or even beat that
jacksmith21006 9y ago
The problem is breaking up Amazon or any of the other big tech will just be replaced with another. The issue is things gravitate to winner take all or at least most. We had tons of ecommcerce companies but now one dominate. We had tons of search engines and now one dominate. I believe the issue is the Internet. I was involved in 86 and honestly thought it would be the most democratizing thing ever. But intuition was wrong and instead it is causing capitalism to break. Instead we are getting crazy concentration with companies and solutions.
- 2muchcoffeeman 9y ago
  Isn't this just the 80/20 rule though? What inherent property of the internet would prevent the majority of people flocking to the few websites that are slightly better than their counterparts?
  - mzzter 9y ago
    There isn’t one that I can think of. The Internet is accessed using just a handful of browser clients. That in itself drives most users to start browsing at only a few websites.
adventured 9y ago
So you want Amazon to provide incredible products and selection at the lowest reasonable prices, fast delivery, with the absolute best customer service. But you don't want them to become giant and or dominant in the process of providing such an extraordinary service. No no no, we should have two of them instead. Why? Because! Dominance! What would two of them do better than one is already doing in terms of providing service? No answer. Maybe the twins would lower prices further in a competitive death spiral and both could go bankrupt thanks to their currently barely existent profit margin. How could anyone fail to miss the absurdity inherent in the premise? We want you to be incredible for the consumer, but not too incredible such that everyone uses you and you get big and dominant by doing it. So Amazon should provide ok but not great products, ok but not great delivery, ok but not great customer service (or some combination of good and mediocrity). Maybe they should regularly mistreat customers like Comcast and charge far higher prices or provide really shit customer service. Really overall just bring their business game down to a lower level, so other mediocre companies can keep up with them. That'll show the consumer.
pascalxus 9y ago
Before you go after Amazon, I think there's far more egregious fish to fry: like the big ISP cartel and the pharmaceuticals
criddell 9y ago
From the article: > Punish it for success and you send a strange message to entrepreneurs and investors. Bezos is one of the wealthiest people on the planet. Do they think breaking up Amazon at this point is going to discourage anybody? Like maybe the fact that you can become a billionaire but probably not a trillionaire means I'm probably not going to launch my idea.
kdk282iejrkoqn 9y ago
“Written for and first published in the Financial Times on 19 January 2018.” When people with power and a platform are concerned, out come their calls for government action. But when the warehouses are stifling, and people are expected to wait in line unpaid to go through security... well, those folks can find other jobs. Free market and all. The bourgeois are rattled by Google and Amazon lately. The finance sector is sick of your shit, guys
pessimizer 9y ago
Sorry, it'll never happen. Not having to pay taxes and being the best of the tiny group of first movers in the online catalog shopping space space has allowed it to eliminate both brick and mortar and online retail competition. It's even confident enough in its institutionalization that it's been gradually lowering the quality of its service while making wildly successful investor fueled infrastructure plays for both the basic fabric of the internet and the logistics of all physical world home-deliveries. A government whose elements nearly-unanimously insist that a company isn't a monopoly until it both controls 100% of all possible industries that can be substitute products for its own industry and owns all of its suppliers, could "ironically" never muster the power to break up a theoretical business that met that standard. At that point, that business has become an inseparable part of the government, itself. Sorry for the scare quotes around "ironically," but I can't help believing that this mistake is intentional, not accidental. People who insist that a company has to be all-powerful before it's necessary to break that company up (in order to protect the improvements from competition that free markets use to justify themselves) can't possibly fail to see that all-powerful companies can't be broken up, because they are all-powerful. It's like having a law against dictators that only kicks in once someone has completely taken over the government.
- ars 9y ago
  > Not having to pay taxes Amazon pays (collects) taxes nationwide: https://www.theverge.com/2017/3/24/15055662/amazon-us-sales-tax-collection-all-states https://www.theverge.com/2017/3/24/15055662/amazon-us-sales-...
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randomsearch 9y ago
I agree with Peter Thiel’s observations about allowing monopolists to reap the rewards of their innovation. And almost no-one (ok, Elon, I heard that cough) has innovated as much as Amazon in the last decade. That said, banning chromecast etc is a dangerous precedent and I’d like to see Bezos apologise for that. It’s an unusually shortsighted move that does not fit at all for me. If you’re going to attack a tech giant for being rubbish and monopolistic, Facebook is right there doing very little other than milking ads, acting irresponsibly, and burning a whole lot of time out of the economy.
ilaksh 9y ago
Amazon and other large companies and even institutions should eventually lose most of their business to distributed applications running on peer-to-peer protocols or light-weight companies built on those types of public protocols taking small cuts. This includes Amazon, Google, Uber, Waymo, Instacart, the US dollar, banking and government in general.
feralmoan 9y ago
Amazon is the literal expression of pied piper consumption. You know what would mess with Amazons dominance? Consumers having critical thinking skills enough to make long term decisions. Everyone here knows what the game is, which is kind of disgusting/amusing/predictable. Carry on :) Particularly you, Bezo/Freud/Bernays, you lovable sociopaths. Here for the comedy not for the crowd.
- fzss_ 9y ago
  Critical thinking skill: I’m too smart to make a comment with substance.
greggman 9y ago
just an anecdote but a Chinese person I met told me how crap Amazon is for buying clothing vs taobao. she said taobao has models for most clothing and showed us some examples. seems like there is plenty of room compete with Amazon and that's just one example.
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320 points by imartin2k 9y ago

Amazon accounts for 4% of ALL retail sales. Where are the calls about Walmart? I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. Dominance is not illegal. Nor technically is a monopoly. Using a monopoly illegally is. Having said that we would have to fundamentally change the definition of a monopoly in order to break up the party responsible for 4% of the market -- and have a record of reducing prices.

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voidlogic 9y ago
When you compare Amazon to say Walmart or Google, I think the real consideration is that the later two have narrow verticals of dominance and Amazon's dominance spans e-retail, compute, storage, etc and is expanding. Having one entity control 60% of 50 verticals is much more dangerous for the economy anti-competitively than one company that controls 80% of say two verticals. The reason is simple they can use their multi-vertical footprint to apply pressures on a small competitor that a large competitor who was limited to a single vertical could not.
- beeflaw 9y ago
  I wouldn't be surprised if the shareholders eventually got their way and have Amazon split its profitable businesses (like cloud infrastructure) from the unprofitable ones.
  - ahtu123 9y ago
    Alphabet is already taken so I guess they'll be the Numeric Table or something.
    - MaxBarraclough 9y ago
      A pity 'Bigtable' is also taken.
- moosekaka 9y ago
  I don't understand why the author and many here consider splitting Amazon only AFTER they display behavior that is harmful to consumers (such as exorbitant prices and/or poor service). Reading his article, he seems to be saying Amazon does everything good for the American economy and consumers, and he's against false positives (wrongly calling out anti competitive behavior). But at the very last paragraph he suddenly waves his wand and concludes "Amazon is too dominant, we should split them into two, after all two Amazons would be better then one". It just seems like he forgot or got lazy to consider the pros and cons of having two smaller Amazons for the sake of it.
- dpark 9y ago
  Walmart has a narrow vertical? In many areas, Walmart is the main place people shop for everything, from groceries to clothes to electronics to tools to hobby equipment. I would also not really consider search and ads narrow verticals. Those are broad industries that drive and direct large scale consumer behavior.
nsnick 9y ago
The mistake you are making is that you are only looking at the harm that monopolies do to their competitors. You should also look at the harm that monopolies do to consumers. If you are a monopoly you can effectively set the price of whatever you are selling. Just operating is using your monopoly.
- beeflaw 9y ago
  Amazon has been consistently losing money on retail since its inception. If they raised prices, they would lose their dominant position. The main reason you don't see more competition is that retail (online or offline) simply isn't very profitable to begin with.
  - rocqua 9y ago
    Such selling at a loss is really weird from an anti-trust perspective. As a worst case, it allows a company to 'invest' in market share by selling at a loss to strangle the competition. Once this is done, they can entrench themselves and raise prices. If you only look at anti-trust as consumer protection, the above scenario only becomes problematic when its to late. That said, lines are hard to draw. When is a company lowering prices to strangle the competition and when is the competition being strangled a side-effect of efficiency? Is it okay if amazon intends to always stay cheap, and use retail as a loss-leader? What should happen when supermarkets dampen price fluctuation, taking a loss when prices spike to appease their customers. It's a hard problem, but we should be careful about companies operating at a loss just to strangle their competition. However, should this come at the cost of companies that strangle their competition by just being more efficient?
    - beeflaw 9y ago
      "Once this is done, they can entrench themselves and raise prices" If that strategy really worked in the long run, you would see countless examples of it. So called "price dumping" can actually be illegal, but it rarely needs to be enforced.
    - zdragnar 9y ago
j9461701 9y ago
I think you hit upon a really important idea. Amazon has been investing in itself for years, and focusing on longer term growth and success even at the cost of short term profit maximization. Which is... exactly what we as a society want. We want companies to think long term, to be investing in innovative new ways to succeed and relying on growing outward and always trying to be on the cutting edge. All that stuff is great, far better than companies run by finance degree holding businessmen that haven't invented anything in 3 decades and keep existing purely through rent seeking or quarter-to-quarter profit pumping. To bring Amazon down now, before its had a chance to reap the benefits of its prudence feels like the worst possible signal we could give the market. It'd basically be saying "Don't bother actually focusing on technical improvement, because if you ever do get really big as a result the government will step in and take it away from you". Though the article does kind of share this sentiment, so kudos to Tom Harford: >If that is a worrisome state of affairs — and it should be — then Amazon is the shining counterexample. The online retailer’s strategy is driven not by short-term profit but by investment, innovation and growth. If only there were a few more companies like Amazon, capitalism would be in a happier spot. I suppose the core disagreement then becomes I don't think the threat of Amazon becoming abusive is worth the negative signal going after them would generate, and he does. I'd be interested in reading a 2nd article from him that delves more specifically into this part of the issue.
- aaron-lebo 9y ago
  You ever seen that Swole Bezos picture? He's that doughy, slightly nerdy guy who transformed himself into a hard assed cutthroat. This is Amazon. Bezos obviously has an incredible nose for business, but he's mainly shown that he's not incompetent and just by being that he's run circles around others. I've had too many bad experiences with Amazon that it tells me that his genius businessman mythology doesn't extend to the details. Went searching for a new smartphone recently. Was seconds away from spending $300 for what seemed like a new device only to see review after review from people who had been shipped poorly refurbished phones (shipped by Amazon) that would break a few months later. There's too much stuff like that. That's their own damn site, an Apple product, and it shows that people are getting regularly ripped off and they are powerless to stop it (or won't). I see that and I see them getting into groceries and healthcare and it scares me. How can they possibly keep quality up? There's too much mythology there, too much obvious greed, and not enough care that they appear to be building the world's greatest monopoly and we're patting them on the back.
kerkeslager 9y ago
> Where are the calls about Walmart? Are you seriously saying you've never heard anyone call for ending Walmart's dominance? > I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. The big picture for involves looking outside of the myopic view of growth, momentum, and investments, and seeing how it affects people. Growth, momentum, and investments are only a good thing when the gains benefit society, which only happens if they occur throughout a diverse market. Growth, momentum, and investments for Amazon only benefit Amazon, and if they're only in Amazon, it's at the expense of the rest of the market. > Dominance is not illegal. Nor technically is a monopoly. Using a monopoly illegally is. The implication that companies with monopolies don't use them, in direct opposition to incentives, is incredibly naive. Also, this is a conversation about policy should be, so telling people what policy is, isn't really very relevant. > Amazon accounts for 4% of ALL retail sales. > Having said that we would have to fundamentally change the definition of a monopoly in order to break up the party responsible for 4% of the market -- and have a record of reducing prices. On what basis have we decided that "retail sales" is the most relevant market segment? Why not "book sales" or "online sales"? It should absolutely be concerning to us that Amazon is dominant even in these smaller markets, with little hope of competition.
- Erik816 9y ago
  That is not a naive understanding of American antitrust law; it's perfectly accurate. It's not illegal to have a monopoly, it's illegal to abuse your monopoly position to harm consumers. This is in contrast to EU antitrust law. And yes, this is what I think the policy should be. We don't want to punish success. We want to protect consumers.
  - sbov 9y ago
    Which is odd, considering the plain language of the Sherman Anti Trust act not only makes monopolies illegal, but makes pursing a monopoly illegal. Has there been any laws passed that override this, or have the courts been unwilling to enforce the law as it's written?
    - 9y ago
codingdave 9y ago
> Where are the calls about Walmart? Everywhere you look. They have been criticized for decades about their business practices, the way they treat their employees, their usage of scale to crowd out small-town retail, then jack up prices once they are the only place left in town... all because they are big enough to make it work. If you haven't heard complaints about Walmart, you haven't been listening.
coldtea 9y ago
>I think we have to see the bigger picture. Growth, momentum, and investments should be a good thing. Why? As a an a-priori assertion?
- wpietri 9y ago
  Agreed. I'm a big fan of free markets. But the modern tendency toward a sort of fundamentalist capitalism is repulsive. A good way to make a profit is to make something people need at a price they can afford while paying your employees well. But you can't work that backwards. Not everybody making a profit is creating value or contributing to society. If you don't have a conscience, or even if you're just not thinking very hard, it's easy to privatize a gain and socialize the losses. It's our job as citizens to make sure that is minimized.
  - Digit-Al 9y ago
    Unfortunately, If you make something people need whilst paying your employees well you'll have to charge more than your competitors for it and most people simply will not buy it.We all pay lip service to wanting employees to be paid well (after all, we're all mostly underpaid employees ourselves) but the reality is that most people just want to stretch their meagre wages as far as possible. Which means compromising on quality, and ethicality.
    - wpietri 9y ago
      That can happen, but it's not the only thing that can happen. Look, for example, at the way Toyota easily beat American carmakers for decades. "Respect for People" was at the core of the Toyota Production System, and by that they meant both workers and customers. Their extensive investment in workers let them create better products for less money. Their refusal to lay people off cost them in the short term, but gained them substantial competitive advantage in the long term. This only becomes more true the more we automate things. If machines are doing the dumb stuff, that only leaves smart stuff. And unhappy, underpaid people don't do smart stuff very well. For those interested in how a different philosophy can lead to a deep competitive advantage, check out the This American Life episode on NUMMI: https://www.thisamericanlife.org/radio-archives/episode/561/nummi-2015 https://www.thisamericanlife.org/radio-archives/episode/561/...
wpietri 9y ago
> Dominance is not illegal. This is tautological. Legality the wrong question to ask when we're talking about what laws we need. A good question to be asking is whether net harm outweighs net benefit. Another is whether we can get the same benefits with less harm.
Noos 9y ago
Walmart carries a very narrow range of goods, and leaves tremendous room for local businesses to still exist. Amazon will compete with everything at any time. Walmart doesn't carry criterion releases or foreign films, and there is potential for local art movie stores or houses to exist to fill the need. Amazon carries movies at a much lower price than a local business ever could, and streams them too, again at lower prices than a theater. They try an get their fingers into everything, even service-based businesses, while walmart just does low prices on a selection of goods.
- sib 9y ago
  Sure Walmart carries Criterion series films: https://www.walmart.com/search/?query=criterion%20collection%20blu-ray&typeahead=criterion https://www.walmart.com/search/?query=criterion%20collection...

obblekk 9y ago

This article concludes by saying "... wouldn't two amazon's be better than one?" But I didn't find any case made for this claim in the article.

IlGrigiore 9y ago
The point of having a direct competitor to Amazon is to limit the possible actions they could do. Right now Amazon is well behaving and its supported by the customers. However, if Amazon were to change its actions, we would have a near monopoly that is not positively affecting people. Therefore, the theory of the author is to limit the power of Amazon by entroducing a competitor that would challenge the dominant position instead of waiting for the negative outcome.
- prepend 9y ago
  Amazon has many direct competitors. It’s likely that this is why they are behaving so well. But my guess is just Bezos’ philosophy as a driver.
Edmond 9y ago
maybe the article didn't lay out a case but that question should really be viewed from the perspective of more vibrant competition in the marketplace. We know in general that competition is good both for consumers and in the case of the technology sector competition is good for innovation. I think the question applies to the likes of facebook (find me someone who is truly happy with facebook as a service, the whole world's social media needs cannot possibly be well served by the ideas of a handful of people in California), google..etc. There is also the question of economic equity (geographic for instance), there is a direct relationship between the concentration of market share and concentration of wealth.

sgwealti 9y ago

If anything it should be split into 3 companies - retail, logistics, and AWS.

beeflaw 9y ago
Amazon logistics without retail is pointless, retail without AWS (etc) would be highly unprofitable.

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matte_black 9y ago

This article is written by someone who probably holds a short position in Amazon or was badly burned by such a position. There are companies out there with much more dominant positions in industries and few are calling for their end.

dpweb 9y ago

Products are commodities and they often do not win on price before shipping. Shipping is the secret sauce. Their ability to ship at lower costs. I used to prefer ebay, prices are better, but after 2day shipping, you cant go back. I can start an online retailer tomorrow, but i cant ship a package for less than $3. China too. I bought an iphone case for 80 cents, problem there you have to wait 3 weeks but their shipping too also government subsidized. You wont find any huge corporation that wasnt somehow subsidized with public money.

ghaff 9y ago
As I said in a prior discussion, a broad catalog plus pretty predictable 2-day shipping was a real eye opener for me. I first got Prime mostly for the video because Netflix had just started charging for it separate from their DVD service. But I soon realized that I could order a broad assortment of items and get them before I'd probably have gotten around to going to the store anyway. The fact that I travel a fair bit and can reliably order things at a time when I'll be home is another big plus.
dingaling 9y ago
> but after 2day shipping, you cant go back Maybe it's a US-market issue, but I don't understand why Amazon is lauded for two-day shipping as if it is unique. They don't have any particular delivery logistics genius except bulk-purchase discounts from the carriers. The 'Amazon Prime' air cargo fleet is leased from an industry-standard cargo airline, nothing unique or exclusive. And they make silly errors that show how their shipping system works; they won't ship lithium batteries ( or even DSLR cameras ) to Northern Ireland even though they have a logistics warehouse here. Because the inter-warehouse backhaul is via Royal Mail, who won't carry hazardous items.
- Spooky23 9y ago
  They made massive capital investments that allowed Amazon to bypass carrier routing. So they use government subsidy to deliver to expensive addresses (USPS), UPS to handle exceptions, (and to tie up capacity from competitors) and job out delivery to cut rate services whenever possible. Few other retailers do that. A retailer like Willams Sonoma has one warehouse in northern Mississippi and one in Nevada, close to UPS/Fedex hubs. They probably get 3 day delivery for 50% of orders, but can not commit to anything.

Cknight70 9y ago

Would there really be any benefit from splitting up Amazon right now though? Assuming there were two symmetrical Amazons, both focusing on consumers, innovation, and growth, the only way I can see either being competitive is to cut corners. In my opinion, there would be a much more compelling reasons to split up Amazon if they ever begin to focus on profits.

peoplewindow 9y ago

The author laments the rarity, excellence and thus dominance of companies like Amazon, although this article could have been about Apple or Google too. Rather than ponder to what extent if any government regulation is the answer, it'd be better to ask why Amazon is so dominant and why competitors have such a difficult time competing. This isn't specific to Amazon. "Disruption" is a word that has come to mean tech firms, which we can roughly define as firms founded by computer programmers that make heavy use of computers, entering a new market and rapidly out competing the incumbents. These firms start with no particular competitive advantage and frequently have major disadvantages. When Bezos started selling books he had no knowledge of the books business, no warehouses, no logistics operation, no business relationships and no capital beyond his own savings and $300k his parents invested in the business. His only edge was that Bezos had a computer science education and knew programming. Despite starting with literally nothing, Amazon now controls most of the entire book sales market. There was a story on HN recently about how Barnes and Noble is basically giving up and laying off employees. Same thing for Steve Jobs and phones or Google and mapping. All relatively mature industries, all obliterated the incumbents (well, in phones the incumbents only survived by adopting Android wholesale). But Amazon is the best example because retail is such an old and established industry. I've come to think that a big part of this is down to the different way programmers think, vs regular 'business people'. Any of the existing retail giants could have built an Amazon. Bezos didn't have any unique eureka-moment patent or other moat. And they all started way ahead of him in having warehouses and distribution networks. But they didn't, they never successfully did that, I don't think they ever could, because they were run by people who weren't software developers. There are two big parts to this: 1. Understanding software projects and software developers. 2. Clarity, precision and energy of thought. (1) is obvious enough, people with a business background can't judge the skill of developers or quality of software directly so they have to rely heavily on proxies that aren't very good - things like "is this project hitting its projected deadlines" which projects never do, or "what are other companies doing" which creates herd behaviour and eliminates edge, or "is this solution backed by IBM or Microsoft". They tend to make basic errors like saying, well this company over in India says they'll write the software we need for 1/10th the cost of our own development team, and software is software so that's a great saving! And they don't understand the vast gulf in skills and quality of the possible outcomes, or how critical quality tech is to their business. (2) is more controversial, but I can't escape the feeling that programmers tend to think a lot more clearly and rigorously than many business people. Writing software demands intense focus and concentration for long periods, very precise thinking, and computers cannot tolerate internally inconsistent thinking. Way too many people simply cannot or will not actually think things through in detail. Their thinking is often vague, contradictory, shallow and they are constantly looking for clever ways to get out of thinking at all, like by outsourcing their thought to consultants or repeating buzzwords they don't really understand (IoT, AI etc). I'm not arguing that programmers are incapable of self delusion, woolly thinking or anything like that - I've seen plenty of dumb behaviour from supposedly smart people. It's more like maybe they can do it, if they are reasonably free of biases and are given enough time and are motivated enough. But if it's true that programming improves your general capacity for thought then we should expect to see tech firms systematically out-compete every firm in which the playing field is level and not radically tipped in favour of incumbents by regulators and governments. Retail is not very regulated so no surprise that Amazon is systematically taking over. Edit: SpaceX is a better example of Amazon-style disruption than Apple. Musk went from knowing computer programming and nothing about space at all, to radically disrupting the existing aerospace industry with reusable rockets, in less than 20 years.

rweba 9y ago

The author does not offer ANY evidence for Amazon's supposed "dominance". How exactly is Amazon dominating? What percentage of online retail sales does Amazon have? What percentage of TOTAL retail sales (online and offline)? And more importantly, how is Amazon's market position harming consumers? It's remarkable that Tim Harford wrote this entire article without citing a single figure or statistic. What seems to be going on is that there is a PERCEPTION that Amazon is totally dominating and monopolizing retail, but retail is so big that you can grow massively and have revenues of a $100 billion without coming close to being a monopoly. Points to note: (1) Amazon has no MOAT. Anyone can set up shop and start delivering things to people. There is no switching cost. (2) Amazon has MASSIVE well-funded competition in all of its areas: online retail (Walmart), Cloud (Google), video streaming (Netflix), Books (the big publishers who own the content) (3) You can live quite comfortably and cheaply and conveniently get almost everything that Amazon has to offer without having to use Amazon if you don't want to (books, retail items, cloud services, etc.). This is not the case with pure monopolies like utilities, or monopolies like Intel or Microsoft where completely avoiding them is a big pain for the average person.

fnl 9y ago
Fully agree to all but (3). From personal experience (here in Spain), every year it is getting more difficult for me to not buy from them (yes, I "religiously" avoid giving companies I consider harming society a dime, if I can...)
- sah2ed 9y ago
  How is Amazon harming society? I don't see how they harm consumers since either way, consumers are the biggest winners of those low prices. If you are referring to self-published authors distributing ebooks being forced to take 35% on < $3 sales and 70% on > $3 sales on their platform; or merchants leveraging their reach to sell to a larger audience being undercut by Amazon on price then yes, they are harming society in some way. But even their "harm" is as debatable as the "harm" of Henry Ford's mass produced cars displacing horse-drawn carriages mostly because they were more efficient at transporting people over the same distances as horses. https://www.quora.com/How-long-did-it-take-to-get-horse-drawn-carriages-off-the-roads-in-lieu-of-cars-1 https://www.quora.com/How-long-did-it-take-to-get-horse-draw...

prepend 9y ago

I remember a little bit of debate and a lot of consternation in 2002/2003 on whether a preemptive strike on Iraq was justified given their likelihood of having/using WMD. And in Minority Report how the theme was about how convicting on precrime was a right violation. But has society really shifted thinking that acting based Amazon’s potential future dominance is a substantial discussion? Our predictive ability is not very accurate to be able to act preemptively (eg, no WMDs in Iraq). So ending Amazon’s pre-dominance seems rather inefficient and bad for society.

deegles 9y ago

I don't believe that most investors really have a grasp on how "long term" Bezos' thinking is. It's not multi-year, it's multi-decade... maybe even multi-century[0]. This is all just speculation from his involvement with the Long Now Foundation, but one of their goals is to foster long lived institutions... I believe that this is Bezos' vision for Amazon and that investors hoping for it to stop its self investment and growth are in for a very long wait. [0] http://www.wideopencountry.com/there-is-a-10000-year-clock-under-construction-in-west-texas/ http://www.wideopencountry.com/there-is-a-10000-year-clock-u...

moosekaka 9y ago
Bezos dream of shifting all heavy industry and mining to the asteroids would be so beneficial to humanity and the planet, that whatever short term pain (short as in timescale of decades) to either current incumbents business performance or consumer choice should be balanced against this promise.

dpweb 9y ago

OP is dreaming. The US has perhaps never been more pro-business, hands off, and unwilling to do any anti-trust, than they are now. They will not be breaking up any companies any time soon. A 1990s Microsoft anti-trust case, you wont see. In fact I think we’ll see corporations increasing their influence. acting as banks, keeping private armies, controlling political affairs.

the-dude 9y ago
And the MS case resulted in basically a flick on the wrist, nothing else.
- maxxxxx 9y ago
  It definitely slowed them down a lot. Things could be looking very different if there had been no action.
  - the-dude 9y ago
    Like what? Pretty baseless claim without examples.
    - maxxxxx 9y ago
      For example they had to decouple their browser from the OS. In Europe they were forced to offer alternative browsers. I also wonder if their investment in Apple was at least in part motivated by them being investigated. There may be no Apple today without that.
      - guitarbill 9y ago
        I think the EU was right to do it, because they realised how important the web is. But we didn't really feel the effects. Normal people still used IE, until they didn't. In the end, I think Microsoft brought the demise of IE on themselves, because of how terrible it was. They couldn't undo that reputation, not even with Edge, which still feels clunky compared to FF or Chrome. So this example is ambiguous w.r.t. hands-off vs. hands-on regulation at best.

dawhizkid 9y ago

I really hope Costco steps up and saves itself from Amazon.

ako 9y ago
If they do, probably by reducing costs, it will likely be at the cost of manufactures, farmers producing the goods, and employees.
- dawhizkid 9y ago
  I mean they've completely underinvested in technology and new experiences. The in-store experience and the website feel like they haven't changed in 20 years. Maybe that is part of the Costco charm, but the "if it ain't broke don't fix it" attitude is going to haunt them if they don't change. Lots of headwinds in the next decade or so: younger consumers aren't driving as much (i.e. to big box stores with giant parking lots in the middle of suburbia), they are moving from suburban to urban centers, they're having fewer kids, buying anything online including perishables has become easy, etc etc.
ars 9y ago
Not a chance. Costco is actually heading toward failure, not success. People want to shop online, people want to at the very minimum look up prices online. People want to just go in the store, get what they need, and get out. But Costco keeps moving things because of their "treasure hunt" atmosphere" (to force people to go searching) and "store experience" that they are trying to cultivate. It works - for now. Until it won't. Low prices won't save them forever. Costco is on the record saying they refuse to have online shopping because they want people in their stores having a "treasure hunt". Costco has a record of every item a member bought - it would so very very very easy for them to make an online "reorder this" shopping list. And a "you might like" section by data mining and correlating with other shoppers. They have so much potential, but they are going to be like Sears, and they are going to blow it.

OscarTheGrinch 9y ago

I've tried supporting the little guy with my online purchaces, and been ripped off several times, whereas Amazon has always put things right. Do we really want to go back to the wild-west days of online retail?

moosekaka 9y ago
Unless the little guys were the original creators of whatever wares you were purchasing from them, their role in the value chain was merely that of a middle man. In that case, what moral, economic or societal benefit would come from purchasing from the little guy vs a giant retailer?

kemiller2002 9y ago

I have a little different take on the whole Amazon is too big argument. My family has owned small businesses for over 40 years. My dad and I have a vastly different opinion of Amazon. My dad is constantly frustrated by them, because its "cutting into our business". We simply can't compete on price on some items, and people choose not to buy products from us when they can just purchase them and have them shipped home. Now this isn't a poor us, feel bad for us statement. Like I said my opinion of them is vastly different. I want them around. I need them around. They make logistics for us a 1000 times easier. In 3 clicks I can get items ordered that we need and not have to worry about it. (Need a new storage rack? BAM! Be here on Tuesday? We need a new printer ribbon? Phone camera + Amazon app = I have the exact one I need to replace.) I hear retailers largely complain about them, because they are taking away business that they have come to rely on. That's not Amazon's fault; that's the business' fault. This is no different than the Walmart's, Barnes and Nobles (remember when there were small bookstores?), etc. of the world. Amazon is different, because it's threatening them too. Amazon is making people realize that they need to be constantly searching for new products and new sources of revenue, but the truth is that they should have been doing this all along. Literally every time I walk into the store, I talk to the manager and ask, "What are we doing to move forward?" Amazon isn't what should be scaring people, it should be the fact that they've been asleep at the wheel not realizing they are driving of the road. My point is that competing directly with Amazon is stupid, but so is competing with any other large dominant company. They don't have a monopoly on anything, it's just that their presence is more widely felt by a larger number of people at the same time.

JonnyNova 9y ago
Their monopoly is more abstract: they have a monopoly on convenience. They ensured their product selection covers a wide variety of common objects that most people end up buying and streamlined their checkout process (they had the patent for 1 click checkout for 20 years) to reduce as much friction as possible to ensure that carts would not be abandoned.
- mathperson 9y ago
  I'm frustrated that is patentable

RestlessMind 9y ago

As much as I believe in free markets and less regulation, I believe we do need a law / regulation which disallows companies to use profits from one business to subsidize completely unrelated business while undercutting economics of the second one. For startups, they should be allowed to subsidize low prices only for a specified duration of time or until they hit a threshold of marketshare in a given market. So Amazon should not be able to use AWS profits to subsidize retail, when other retailers don't have such cushions. Google should not be able to use Ads profits to undercut economics of browser or mobile OS. Uber/Lyft should not be allowed to capture more than 5-10% of SF/NYC taxi market unless they are profitable there. Just to be clear - if someone can upend an entire business while being profitable, they should be allowed to flourish (eg. Netflix with rental movies, Apple with phones). One possible exception - if there is no established business in a field and someone wants to move the technology forward there, they should be given some exception. So SpaceX can experiment with their rockets and Google can experiment with self driving cars because they won't be competing unfairly with any competitors. Finally, I really hope EU adopts regulations along these lines. I have no hopes from US or China.

cortesoft 9y ago
This would be really hard to enforce. A big company could just invest in a startup, and have that startup spend money to earn market share while not being profitable.
- RestlessMind 9y ago
  I covered that as well - startups should be allowed to subsidize their operations only for a reasonable length of time and/or until their market share is below a certain threshold. (So Uber should be allowed to operate in a market without profits until they serve, say, less than 8% of taxi rides).
Turing_Machine 9y ago
Hmmm... so under your plan would a bricks and mortar retailer be allowed to offer (say) free air conditioning or heat for customers who come in the store, or would they be required to charge for that? How about lighting? If so, how is offering free air conditioning to attract customers different from Google offering free search to attract customers?

ourmandave 9y ago

Related: Scott Galloway's take on breaking up Amazon. https://www.youtube.com/watch?v=1ebKI4x_k8A https://www.youtube.com/watch?v=1ebKI4x_k8A

fnl 9y ago

This article misses the real issue of "the Amazons" of today: The low-wage workers Amazon has built it's empire on (or, the "gig-economy" of others), and the massive scale, legal tax avoidance schemes only companies with global scale can play with. If anything, companies of a certain revenue level should be taxed by (localized) revenue, not (globalized) gains. That alone would already go some way to put SMEs on a little more equal footing. Addendum: In fact, we should tax all companies by a progressive revenue scale.

p0rkbelly 9y ago
The hourly employees are paid significantly more than Walmart/Best Buy/Target employees. In my home state, they start at $14-$15. About 2x Walmart.They also have programs for veterans to make even more. They will also pay for community college degrees for those employees -- and it doesn't have to be related to their job nor do they have to stay at Amazon. I believe only in certain fields though, like STEM degrees.
- fnl 9y ago
  Well, those are not really SMEs with high quality jobs either... I'll happily accept your word that Amazon's sweatshops are better than X's sweatshop - but that just makes more shitty jobs...
  - guitarbill 9y ago
    Ah yes, the world without "shitty jobs" utopia. "Shitty" as compared to what? Who should do those jobs? Robots? Assuming what parent said is true, except for paying employees much more than competitors and education options, what should they do in your opinion to make the jobs less "shitty"?
    - fnl 9y ago
      Doesn't matter, that bright future is an Utopia, as you already correctly derived. So the question becomes, how to avoid the opposite, the dark future of extreme inequality that our world is steering into. Which brings us back on track: Taxing corporations by revenue, not gains, thereby allowing for a better distribution of wealth.

amarant 9y ago

Meh, Amazon does good things, many different good things, so we must stop them? If they start abusing their position we can have this discussion, but until then I'll enjoy the good they provide instead.. This seems more like jealousy they're doing so well. Screw that

tonyedgecombe 9y ago

I'm not convinced, I stopped buying from Amazon and haven't had any problems finding other suppliers.

aj7 9y ago

“Yet for all this, I am deeply uneasy about Amazon’s apparently unassailable position in online retail.” I have found online ordering at both Costco and Walmart to be easier and much more efficient than Amazon. NewEgg, Lowe’s, Home Depot are all websites I visit more than Amazon. Part of this is I am not much of a media consumer. But all, I do not have time for distractions and “suggestions” when online purchasing.

zanny 9y ago
Thinking about it if anything other services are finally catching up. I've ordered as much stuff in the last 2 months from walmart and best buy as I have from Amazon despite being a prime member. There isn't really as much of a network effect to Amazon they can abuse. For a lot of people, the day they jack up prices to exploit their position is the day a lot of people tab over to walmart or target.com and buy the thing from there instead.

ekglimmer 9y ago

Not sure if it was intentional or not but I enjoyed the irony of putting two Amazon links to the book "The Box" directly in the article.

crtasm 9y ago
As well as his own book at the end of the piece; be the change you wish to see and all that.

moocowtruck 9y ago

please no, amazon makes life better, saving me so much time to focus on other things.. i do NOT want to go back to the time before that

skookumchuck 9y ago

Any other country would love to have a company like Amazon. But the US wants to tear it apart.

austenallred 9y ago

Maybe I’m alone in this, but I feel like if you’re going to break up a company with antitrust regulation you should at least be able to point to a way they’re abusing their power or are making a worse experience for customers. The article goes as far as to admit that Amazon is currently not doing anything wrong. Should we really seek to regulate away hard-earned (and valuable!) advantages because they make it possible to abuse the position? Surely we should wait until they’re actually abusing it? As an aside, I can’t think of any advantage Amazon has that wouldn’t open up opportunities for a competitor should they start to abuse them. That’s the goal of capitalism, in a sense; you have to be great or people just go elsewhere. Seems odd to fight against that.

cmurf 9y ago
I do not think it is good public policy to wait until companies are abusing their power before something is done about their size; that suggests the problem is not size, but behaviors which should already be illegal if they're wrong regardless of size. Are they a natural monopoly? If so they should be regulated as a monopoly. If they aren't a natural monopoly, then why is the market not more competitive; and why is it wrong for policy to create a competitive environment? And isn't there an opportunity cost in every case, even if you don't know what it is? What businesses aren't being created because of Amazon's sheer weight? Many of these questions are asked and answered (not entirely satisfactorily in some cases) in the case of Standard Oil.
- wpasc 9y ago
  Taxpayer dollars and regulators' attention are rival commodities. There are plenty of monopolistic/oligopolistic companies and industries that merit examination and reform much, much earlier than Amazon because they currently are exploiting their market position (Chicken companies, Monsanto, etc.) If no mono-/oligopolies existed that were abusing their power, then maybe our government could talk regulation Amazon, but still you'd have to make a strong case. I think it's a tough sell to have an inefficient entity that does not have to compete in a corporate survival sense (the government) tell a very efficient entity that has seen many similar "monopolies" fall (e.g. microsoft) to act differently.

indubitable 9y ago

For some interesting context on "Amazon's dominance", in 2017 they managed a total marketshare of 4% of retail. Surprisingly even if we restrict it to e-commerce only, they 'only' achieved 44%. [1] [1] - http://www.businessinsider.com/amazon-captured-4-of-us-retail-sales-in-2017-2018-1 http://www.businessinsider.com/amazon-captured-4-of-us-retai...

drawkbox 9y ago

Amazon re-invests nearly everything back into the company, that is to be desired and they deserve to win because of it. Competing with them is hard due to this intense research and development investment culture they have. It would be hard to claim they are a monopoly with Wal-mart out there but also in cloud computing, there are many competitors. Amazon just knows how to develop not only products but markets for their product. Amazon has helped small to medium retailers sell on Amazon and small to medium development/technology companies compete with infrastructure. Amazon will hopefully disrupt healthcare with their new venture with Berkshire (who owns Geico and should make healthcare/insurance more consumer focused like auto insurance) and it is a welcome initiative. They might even solve the fixed pharmaceutical pricing market.

bahmboo 9y ago

Amazon is a convenience not a monopoly, not even close. They have 4% of the retail market share.

xg15 9y ago

I think a good criterium for antitrust applicability (which the article implicitly mentions) is potential for damage: Even if a company doesn't hike prices, cut quality or blocks customers right now, how easy could they do this and how large would the damage to society be? I think by that metric, Amazon (and others) should ring some alarm bells: If Jeff Bezos woke up tomorrow with an irrational hatred of redheads, he could immediately decide that his company should stop doing business with any redhead and denand that any partner company does the same - or they, too, will be kicked off Amazon. That would probably put redheads at a severe disadvantage in day-to-day activities pretty quickly. Another thing I haven't seen discussed so far is creating sub-markets within your product. E.g., in the market for smartphone apps, Google and Apple are not large competitors or even monopolists, they are the government. They have full information about each market participant, can subject all participants to arbitrary regulations and instantly sanction players who don't confirm. Except, unlike an elected government, they are not required to justify the regulations, make them fair or even make them completely public. Im kind of surprised such "sub-markets" seem to be completely unrelated so far.

djhworld 9y ago

It's a tough one. I've been an Amazon Prime customer for a few years now and notice my buying habits centralise further and further on Amazon. The main "selling point" for me, and this is where Amazon's dominance probably doesn't help things, is they own every facet of their distribution chain. So when they say on the website "guaranteed delivery tomorrow!" I can be certain that the item will arrive tomorrow. Before Christmas last year I needed to get a thunderbolt to HDMI adapter for my Mac so my family could play a game, Amazon got that to me on Christmas Eve. All turned around within the space of about 18 hours. Additionally the Amazon lockers make it simple for me to pick things up on the way home from work (there's one just outside my tube station). I'm not sure what other businesses can do to compete really, Amazon isn't necessarily always the cheapest place anymore, but they offer the convienience - and I haven't seen another business be able to match, or even beat that

jacksmith21006 9y ago

The problem is breaking up Amazon or any of the other big tech will just be replaced with another. The issue is things gravitate to winner take all or at least most. We had tons of ecommcerce companies but now one dominate. We had tons of search engines and now one dominate. I believe the issue is the Internet. I was involved in 86 and honestly thought it would be the most democratizing thing ever. But intuition was wrong and instead it is causing capitalism to break. Instead we are getting crazy concentration with companies and solutions.

2muchcoffeeman 9y ago
Isn't this just the 80/20 rule though? What inherent property of the internet would prevent the majority of people flocking to the few websites that are slightly better than their counterparts?
- mzzter 9y ago
  There isn’t one that I can think of. The Internet is accessed using just a handful of browser clients. That in itself drives most users to start browsing at only a few websites.

adventured 9y ago

So you want Amazon to provide incredible products and selection at the lowest reasonable prices, fast delivery, with the absolute best customer service. But you don't want them to become giant and or dominant in the process of providing such an extraordinary service. No no no, we should have two of them instead. Why? Because! Dominance! What would two of them do better than one is already doing in terms of providing service? No answer. Maybe the twins would lower prices further in a competitive death spiral and both could go bankrupt thanks to their currently barely existent profit margin. How could anyone fail to miss the absurdity inherent in the premise? We want you to be incredible for the consumer, but not too incredible such that everyone uses you and you get big and dominant by doing it. So Amazon should provide ok but not great products, ok but not great delivery, ok but not great customer service (or some combination of good and mediocrity). Maybe they should regularly mistreat customers like Comcast and charge far higher prices or provide really shit customer service. Really overall just bring their business game down to a lower level, so other mediocre companies can keep up with them. That'll show the consumer.

pascalxus 9y ago

Before you go after Amazon, I think there's far more egregious fish to fry: like the big ISP cartel and the pharmaceuticals

criddell 9y ago

From the article: > Punish it for success and you send a strange message to entrepreneurs and investors. Bezos is one of the wealthiest people on the planet. Do they think breaking up Amazon at this point is going to discourage anybody? Like maybe the fact that you can become a billionaire but probably not a trillionaire means I'm probably not going to launch my idea.

kdk282iejrkoqn 9y ago

“Written for and first published in the Financial Times on 19 January 2018.” When people with power and a platform are concerned, out come their calls for government action. But when the warehouses are stifling, and people are expected to wait in line unpaid to go through security... well, those folks can find other jobs. Free market and all. The bourgeois are rattled by Google and Amazon lately. The finance sector is sick of your shit, guys

pessimizer 9y ago

Sorry, it'll never happen. Not having to pay taxes and being the best of the tiny group of first movers in the online catalog shopping space space has allowed it to eliminate both brick and mortar and online retail competition. It's even confident enough in its institutionalization that it's been gradually lowering the quality of its service while making wildly successful investor fueled infrastructure plays for both the basic fabric of the internet and the logistics of all physical world home-deliveries. A government whose elements nearly-unanimously insist that a company isn't a monopoly until it both controls 100% of all possible industries that can be substitute products for its own industry and owns all of its suppliers, could "ironically" never muster the power to break up a theoretical business that met that standard. At that point, that business has become an inseparable part of the government, itself. Sorry for the scare quotes around "ironically," but I can't help believing that this mistake is intentional, not accidental. People who insist that a company has to be all-powerful before it's necessary to break that company up (in order to protect the improvements from competition that free markets use to justify themselves) can't possibly fail to see that all-powerful companies can't be broken up, because they are all-powerful. It's like having a law against dictators that only kicks in once someone has completely taken over the government.

ars 9y ago
> Not having to pay taxes Amazon pays (collects) taxes nationwide: https://www.theverge.com/2017/3/24/15055662/amazon-us-sales-tax-collection-all-states https://www.theverge.com/2017/3/24/15055662/amazon-us-sales-...

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randomsearch 9y ago

I agree with Peter Thiel’s observations about allowing monopolists to reap the rewards of their innovation. And almost no-one (ok, Elon, I heard that cough) has innovated as much as Amazon in the last decade. That said, banning chromecast etc is a dangerous precedent and I’d like to see Bezos apologise for that. It’s an unusually shortsighted move that does not fit at all for me. If you’re going to attack a tech giant for being rubbish and monopolistic, Facebook is right there doing very little other than milking ads, acting irresponsibly, and burning a whole lot of time out of the economy.

ilaksh 9y ago

Amazon and other large companies and even institutions should eventually lose most of their business to distributed applications running on peer-to-peer protocols or light-weight companies built on those types of public protocols taking small cuts. This includes Amazon, Google, Uber, Waymo, Instacart, the US dollar, banking and government in general.

feralmoan 9y ago

Amazon is the literal expression of pied piper consumption. You know what would mess with Amazons dominance? Consumers having critical thinking skills enough to make long term decisions. Everyone here knows what the game is, which is kind of disgusting/amusing/predictable. Carry on :) Particularly you, Bezo/Freud/Bernays, you lovable sociopaths. Here for the comedy not for the crowd.

fzss_ 9y ago
Critical thinking skill: I’m too smart to make a comment with substance.

greggman 9y ago

just an anecdote but a Chinese person I met told me how crap Amazon is for buying clothing vs taobao. she said taobao has models for most clothing and showed us some examples. seems like there is plenty of room compete with Amazon and that's just one example.

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