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Economically speaking, the question should boil down to "is Amazon operating in a contestable market, and/or are they engaging in abusive behavior to raise barr

Economically speaking, the question should boil down to "is Amazon operating in a contestable market, and/or are they engaging in abusive behavior to raise barriers to entry in the market, lowering its contestability". The notion of predatory pricing per se, in contrast, is not really well-defined. Is there some inherent reason why the suppliers and wholesalers who are supposedly being harmed by this monopoly could not simply move to an established competitor, e.g. eBay, Alibaba or whatever, or even start a platform of their own along more favorable principles?

munk-a 7y ago
And that's the question that seems pretty clear cut as a violation - not currently provable but highly indicated by evidence. The portion of Amazon that sells things to consumers provides a clear incentive to raise barrier to entry in the market that they sell those things in - and Amazon also happens to own the market that these things are sold over. This is part of the reason I think there should be concern over Amazon, Google & Apple's profitability (and to a lesser extent Microsoft and Valve) creating a walled garden app store opens up all sorts of crazy anti-trust exposure, just because the FTC is currently declawed doesn't mean that exposure doesn't exist, that risk is just being deferred. In cases like Amazon where they are actively competing against competitors on their own platform... the question of how their suggestion algorithm works is a huge can of legal liability.
int_19h 7y ago
It should, but the "consumer welfare standard" explicitly repudiates such approach. In US, a company can be a complete monopoly, wiping out all competition, and still not cross the line for anti-trust purposes. This is actually kinda ironic, given that US is generally considered to be more on the side of the spectrum that strongly believes in the "invisible hand of the market" - and so it would make more sense for anti-trust to be defined in terms that would protect that hand from being "broken". And indeed, it was so defined originally, until this new standard came to be. Since then, we've seen steadily increasing market concentration [1], and the corresponding decline in competition, all while being assured that it's not harmful to us as consumers, and with some people even openly extolling the virtues of monopolies for consumers (e.g. Thiel). To me, these sound very similar to the arguments that are used to justify "benevolent dictatorships", except here we're talking about economic power rather than political (and, of course, the two are not independent). [1] https://concentrationcrisis.openmarketsinstitute.org/ https://concentrationcrisis.openmarketsinstitute.org/
- 0815test 7y ago
  > ...In US, a company can be a complete monopoly, wiping out all competition, and still not cross the line for anti-trust purposes. That's actually allowed by the contestable-market framing, at least in some cases. It all depends what you mean by "a complete monopoly" and "wiping out" competition - does it happen via some "natural" cost advantages, or has the company been building up an abusive "moat" around their position. Though even in the former case, economic theory implies that forcing a break-up of the firm that isolates the "naturally dominating" part of its business, and then subjecting that to appropriate regulation and market-openness requirements, can be a highly efficient approach and lead to improved consumer welfare.

munk-a 7y ago

And that's the question that seems pretty clear cut as a violation - not currently provable but highly indicated by evidence. The portion of Amazon that sells things to consumers provides a clear incentive to raise barrier to entry in the market that they sell those things in - and Amazon also happens to own the market that these things are sold over. This is part of the reason I think there should be concern over Amazon, Google & Apple's profitability (and to a lesser extent Microsoft and Valve) creating a walled garden app store opens up all sorts of crazy anti-trust exposure, just because the FTC is currently declawed doesn't mean that exposure doesn't exist, that risk is just being deferred. In cases like Amazon where they are actively competing against competitors on their own platform... the question of how their suggestion algorithm works is a huge can of legal liability.

int_19h 7y ago

It should, but the "consumer welfare standard" explicitly repudiates such approach. In US, a company can be a complete monopoly, wiping out all competition, and still not cross the line for anti-trust purposes. This is actually kinda ironic, given that US is generally considered to be more on the side of the spectrum that strongly believes in the "invisible hand of the market" - and so it would make more sense for anti-trust to be defined in terms that would protect that hand from being "broken". And indeed, it was so defined originally, until this new standard came to be. Since then, we've seen steadily increasing market concentration [1], and the corresponding decline in competition, all while being assured that it's not harmful to us as consumers, and with some people even openly extolling the virtues of monopolies for consumers (e.g. Thiel). To me, these sound very similar to the arguments that are used to justify "benevolent dictatorships", except here we're talking about economic power rather than political (and, of course, the two are not independent). [1] https://concentrationcrisis.openmarketsinstitute.org/ https://concentrationcrisis.openmarketsinstitute.org/

0815test 7y ago
> ...In US, a company can be a complete monopoly, wiping out all competition, and still not cross the line for anti-trust purposes. That's actually allowed by the contestable-market framing, at least in some cases. It all depends what you mean by "a complete monopoly" and "wiping out" competition - does it happen via some "natural" cost advantages, or has the company been building up an abusive "moat" around their position. Though even in the former case, economic theory implies that forcing a break-up of the firm that isolates the "naturally dominating" part of its business, and then subjecting that to appropriate regulation and market-openness requirements, can be a highly efficient approach and lead to improved consumer welfare.