5 ms·

Amazon is becoming more powerful than we realize

78 points by bariscan 8y ago

hliyan 8y ago
This is a related, but somewhat tedious read: https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado... Excerpt: Amazon controls key critical infrastructure for the Internet economy—in ways that are difficult for new entrants to replicate or compete against. This gives the company a key advantage over its rivals: Amazon’s competitors have come to depend on it.
- brightstep 8y ago
  Also, from the Abstract: > the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output.
cyborgx7 8y ago
This article makes Amazon sound about as powerful as my impression was. Which is way too powerful, btw.
UnpossibleJim 8y ago
Just a note, Amazon is not responsible for Seattle's poor decision making when it comes to city planning, the housing crisis and their poor decisions when dealing with (or choosing not to deal with) the homeless situation in Seattle. They have done plenty of horrible things, and the article is totally fair to point those out, but it seems beyond the pale to blame Seattle City council's failings and poor governance on Amazon. As for the roads, Seattle is really three small towns jammed together, so the city planning was a nightmare, then there was a few city corruption scandals, etc etc etc and now the police are told to not enforce vagrancy laws and I think everyone is caught up. None of that has anything to do with Amazon.
- pboutros 8y ago
  Amazon isn't solely responsible for Seattle's poor city planning (rather, Seattle, Kirkland, Bellevue, Redmond, Tacoma, etc.), but they're certainly responsible for ~50% of the influx of high-paid workers, which has increased housing demand, and that has certainly impacted Seattle.
  - mandeepj 8y ago
    you are saying they should not have created this many jobs?
    - deleted 8y ago
      [deleted]
    - hkt 8y ago
      There is probably an ideal amount of high paid jobs in a particular area. Too many will push up local property price inflation.
  - lenticular 8y ago
    Those are all positive things on their own though. They have only become negatives due to the city's resistance to allowing new housing to be built. The key issue is rent-seeking single-family-home owners using their political power to distort the market.
  - robbrit 8y ago
    I'm often skeptical of these claims. In the SF Bay Area I can understand why this might be the case, since there are a lot more big tech companies shelling out huge salaries, but the Seattle area only really has two big ones: Amazon and Microsoft. A little back of the napkin math: I'm going to guess that the number of engineers Amazon has in Seattle will be roughly equal to what they were advertising for their second HQ, around 50k. According to Wikipedia the population of the Seattle metro area is about 3.8 million, so the Amazon engineers represent just 1.3% of that - and those engineers haven't come in a huge wave, they've been trickling in over the near 25 years that Amazon has been in business. A major metro area should be able to handle that kind of shock. There's something more at play than just well-paid tech workers pushing up the housing prices. A combination of low interest rates and restrictive housing rules would have a much bigger impact.
sudofail 8y ago
On the one hand, Amazon deserves much of the success it's had. They've changed the game in both online shopping, and in infrastructure management. Most liberal societies implement policies to create an environment of diminishing returns, to help curb the ability of companies to get "too big to fail". They also implement policies to keep the environment competitive for new companies. Tax systems that create an environment of diminishing returns seem to be a good approach. If Amazon were paying the amount of taxes that would normally be warranted for a company of its size, this situation would be less frightening. But they've been able to take great advantage of the fatal flaw in our current approach to capitalism: aggressive reinvestment and expansion. There is no reason to suspect that Amazon won't succeed in fully vertically integrating their supply change through private ship, air and land delivery. There is no reason to think they will not succeed in aggressively expanding into more markets, like music production, tv and movie production, audiobook production, etc. And there is no reason to think they will not aggressively seek to automate as much as they can to further augment their already substantial lead in online retail. None of these things are inherently bad. They create good products, good services and are a general boon to society. But we need to put in some limits, whether by better tax policy, or by taking a more aggressive stance on anti-trust. It's unfortunate that these sorts of debates often devolve into "Capitalism vs Socialism", reductionist arguments. The truth is capitalism is a fantastic tool. But unchecked capitalism has serious flaws, and regulation and unions can help to keep things in balance.
strikelaserclaw 8y ago
I pretty much believe this is how tech will evolve in general. A small group of big companies will completely dominate tech, consolidating talent, power, and money. They have so much cash that they will buy out, or copy and dismantle their competitors. Even in the valley, so called cradle for tech innovation, the way of thinking for a number of years has been to create tech and sell it to a big company. This is the end game for all capitalist societies in general, in every area, the consolidation of everything by the few over the many.
RickJWagner 8y ago
As soon as Amazon becomes close to too powerful, they will be broken up. It happened to Standard Oil (way back when), AT&T, even Microsoft got spanked handily over Netscape. Amazon will not become 'too big'. [1] https://en.wikipedia.org/wiki/History_of_United_States_antitrust_law https://en.wikipedia.org/wiki/History_of_United_States_antit...

78 points by bariscan 8y ago

This is a related, but somewhat tedious read: https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado... Excerpt: Amazon controls key critical infrastructure for the Internet economy—in ways that are difficult for new entrants to replicate or compete against. This gives the company a key advantage over its rivals: Amazon’s competitors have come to depend on it.

brightstep 8y ago
Also, from the Abstract: > the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output.

cyborgx7 8y ago

This article makes Amazon sound about as powerful as my impression was. Which is way too powerful, btw.

UnpossibleJim 8y ago

Just a note, Amazon is not responsible for Seattle's poor decision making when it comes to city planning, the housing crisis and their poor decisions when dealing with (or choosing not to deal with) the homeless situation in Seattle. They have done plenty of horrible things, and the article is totally fair to point those out, but it seems beyond the pale to blame Seattle City council's failings and poor governance on Amazon. As for the roads, Seattle is really three small towns jammed together, so the city planning was a nightmare, then there was a few city corruption scandals, etc etc etc and now the police are told to not enforce vagrancy laws and I think everyone is caught up. None of that has anything to do with Amazon.

pboutros 8y ago
Amazon isn't solely responsible for Seattle's poor city planning (rather, Seattle, Kirkland, Bellevue, Redmond, Tacoma, etc.), but they're certainly responsible for ~50% of the influx of high-paid workers, which has increased housing demand, and that has certainly impacted Seattle.
- mandeepj 8y ago
  you are saying they should not have created this many jobs?
  - deleted 8y ago
    [deleted]
  - hkt 8y ago
    There is probably an ideal amount of high paid jobs in a particular area. Too many will push up local property price inflation.
- lenticular 8y ago
  Those are all positive things on their own though. They have only become negatives due to the city's resistance to allowing new housing to be built. The key issue is rent-seeking single-family-home owners using their political power to distort the market.
- robbrit 8y ago
  I'm often skeptical of these claims. In the SF Bay Area I can understand why this might be the case, since there are a lot more big tech companies shelling out huge salaries, but the Seattle area only really has two big ones: Amazon and Microsoft. A little back of the napkin math: I'm going to guess that the number of engineers Amazon has in Seattle will be roughly equal to what they were advertising for their second HQ, around 50k. According to Wikipedia the population of the Seattle metro area is about 3.8 million, so the Amazon engineers represent just 1.3% of that - and those engineers haven't come in a huge wave, they've been trickling in over the near 25 years that Amazon has been in business. A major metro area should be able to handle that kind of shock. There's something more at play than just well-paid tech workers pushing up the housing prices. A combination of low interest rates and restrictive housing rules would have a much bigger impact.

sudofail 8y ago

On the one hand, Amazon deserves much of the success it's had. They've changed the game in both online shopping, and in infrastructure management. Most liberal societies implement policies to create an environment of diminishing returns, to help curb the ability of companies to get "too big to fail". They also implement policies to keep the environment competitive for new companies. Tax systems that create an environment of diminishing returns seem to be a good approach. If Amazon were paying the amount of taxes that would normally be warranted for a company of its size, this situation would be less frightening. But they've been able to take great advantage of the fatal flaw in our current approach to capitalism: aggressive reinvestment and expansion. There is no reason to suspect that Amazon won't succeed in fully vertically integrating their supply change through private ship, air and land delivery. There is no reason to think they will not succeed in aggressively expanding into more markets, like music production, tv and movie production, audiobook production, etc. And there is no reason to think they will not aggressively seek to automate as much as they can to further augment their already substantial lead in online retail. None of these things are inherently bad. They create good products, good services and are a general boon to society. But we need to put in some limits, whether by better tax policy, or by taking a more aggressive stance on anti-trust. It's unfortunate that these sorts of debates often devolve into "Capitalism vs Socialism", reductionist arguments. The truth is capitalism is a fantastic tool. But unchecked capitalism has serious flaws, and regulation and unions can help to keep things in balance.

strikelaserclaw 8y ago

I pretty much believe this is how tech will evolve in general. A small group of big companies will completely dominate tech, consolidating talent, power, and money. They have so much cash that they will buy out, or copy and dismantle their competitors. Even in the valley, so called cradle for tech innovation, the way of thinking for a number of years has been to create tech and sell it to a big company. This is the end game for all capitalist societies in general, in every area, the consolidation of everything by the few over the many.

RickJWagner 8y ago

As soon as Amazon becomes close to too powerful, they will be broken up. It happened to Standard Oil (way back when), AT&T, even Microsoft got spanked handily over Netscape. Amazon will not become 'too big'. [1] https://en.wikipedia.org/wiki/History_of_United_States_antitrust_law https://en.wikipedia.org/wiki/History_of_United_States_antit...