3 ms·

> No, false. There is competition here, but it's not unfair competition because the brands have already been paid for their products. I thought that brands e.g

by hbosch 7y ago

> No, false. There is competition here, but it's not unfair competition because the brands have already been paid for their products. I thought that brands e.g. Frito Lay will stock the shelves in your store with product “on credit”, and you are committed to selling $N per week/month/year/whatever to pay back to Frito Lay. I’ve seen some Frito Lay CMA’s that also make retailers sign specific agreements for placement, “interrupters”, end caps, promo displays, etc. AND Frito Lay employees come in to the stores to stock/track merchandise as well (rather than Frito Lay products being stocked by store employees). Maybe I’m wrong.

gamblor956 7y ago
Some of the big brands have the leverage and resources to do stuff like this. And key factoid you're missing--the store is contractually obligated to pay Frito for the product. Frito is just being creative with the terms to entice stores to give it extremely preferential in-store placement, which leads to more sales, which means the stores buy more product from Frito. In Frito's case, everything described is a marketing activity--which is precisely the differentiator between normal brands and retail brands. Frito is just a lot more involved in on-the-ground marketing activities than most product brands. (In the past, Frito was one of the companies that threatened to pull its products when a grocery chain--I think Albertsons--tried to push store brands over national brands.) Another deeply-involved brand: Budweiser, for example, can also make significant demands on convenience and liquor stores with respect to marketing placements, shelf placement, etc., as a condition of the store being allowed to sell Budweiser products. Budweiser will even demand that stores report hourly sales of alcohol during big event windows so that Budweiser delivery crews can keep high-volume stores properly stocked.
ABCLAW 7y ago
Generally the term for these arrangements is 'consignment'. A lot of people are discussing this arrangement by allusion. Where retailers also own brands and compete against other vendors in these areas, they are subject to competition bureau scrutiny. Typical competition bureau orders in the event of market dominance often involve non-discrimination agreements specifically aimed at stopping intentional measures taken to squeeze competitor dealflow by having power in another vertical. Relevant terms here include abuse of market dominance, abuse of dominance, etc. Sidenote: There's a LOT of absolutely misled, full of shit statements in this comments section regarding competition law. Tread with caution.
- gamblor956 7y ago
  Dominance isn't required for antitrust to apply. A cursory review of US antitrust law reveals numerous instances of relatively minor players losing antitrust players over anti-competitive behavior. Market dominance makes it easier to establish an anti-trust violation, especially where market power in one vertical (i.e., operating systems) is used to establish market position in another vertical (i.e., browsers) in a manner that is anti-competitive (see IE vs Netscape). But compare Apple Maps/Google Maps vs Apple Music vs Spotify. With the former, Apple's push is not anti-competitive; with the latter the antitrust issues are so obvious that Apple risks serious EU sanctions. Another over-looked fact is that anti-trust regulations generally don't act until they've received a complaint about anti-competitive behavior from a market participant such as a customer or competitor. Until then, regulators generally assume that behavior is competitive.
  - ABCLAW 7y ago
    >Dominance isn't required for antitrust to apply. Abuse of dominance is literally the title for the entire relevant subheading of law in the relevant jurisdiction: http://ec.europa.eu/competition/consumers/what_en.html http://ec.europa.eu/competition/consumers/what_en.html Abuse of dominance isn't the entirety of competition law, but it sure as balls is the catch-all theory under which this is being pursued. See: http://europa.eu/rapid/press-release_IP-19-4291_en.htm http://europa.eu/rapid/press-release_IP-19-4291_en.htm >If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).
    - gamblor956 7y ago
      You need to re-read the announcement. It literally says they are looking into whether Amazon acted in an anti competitive manner and abused its market position. Half of the announcement is them listing actions that are not abuse of dominance. You also need to reread the section on EU antitrust you posted, since abuse of dominance is just one of many potential antitrust concerns they can investigate.

by hbosch 7y ago

gamblor956 7y ago

Some of the big brands have the leverage and resources to do stuff like this. And key factoid you're missing--the store is contractually obligated to pay Frito for the product. Frito is just being creative with the terms to entice stores to give it extremely preferential in-store placement, which leads to more sales, which means the stores buy more product from Frito. In Frito's case, everything described is a marketing activity--which is precisely the differentiator between normal brands and retail brands. Frito is just a lot more involved in on-the-ground marketing activities than most product brands. (In the past, Frito was one of the companies that threatened to pull its products when a grocery chain--I think Albertsons--tried to push store brands over national brands.) Another deeply-involved brand: Budweiser, for example, can also make significant demands on convenience and liquor stores with respect to marketing placements, shelf placement, etc., as a condition of the store being allowed to sell Budweiser products. Budweiser will even demand that stores report hourly sales of alcohol during big event windows so that Budweiser delivery crews can keep high-volume stores properly stocked.

ABCLAW 7y ago

Generally the term for these arrangements is 'consignment'. A lot of people are discussing this arrangement by allusion. Where retailers also own brands and compete against other vendors in these areas, they are subject to competition bureau scrutiny. Typical competition bureau orders in the event of market dominance often involve non-discrimination agreements specifically aimed at stopping intentional measures taken to squeeze competitor dealflow by having power in another vertical. Relevant terms here include abuse of market dominance, abuse of dominance, etc. Sidenote: There's a LOT of absolutely misled, full of shit statements in this comments section regarding competition law. Tread with caution.

gamblor956 7y ago
Dominance isn't required for antitrust to apply. A cursory review of US antitrust law reveals numerous instances of relatively minor players losing antitrust players over anti-competitive behavior. Market dominance makes it easier to establish an anti-trust violation, especially where market power in one vertical (i.e., operating systems) is used to establish market position in another vertical (i.e., browsers) in a manner that is anti-competitive (see IE vs Netscape). But compare Apple Maps/Google Maps vs Apple Music vs Spotify. With the former, Apple's push is not anti-competitive; with the latter the antitrust issues are so obvious that Apple risks serious EU sanctions. Another over-looked fact is that anti-trust regulations generally don't act until they've received a complaint about anti-competitive behavior from a market participant such as a customer or competitor. Until then, regulators generally assume that behavior is competitive.
- ABCLAW 7y ago
  >Dominance isn't required for antitrust to apply. Abuse of dominance is literally the title for the entire relevant subheading of law in the relevant jurisdiction: http://ec.europa.eu/competition/consumers/what_en.html http://ec.europa.eu/competition/consumers/what_en.html Abuse of dominance isn't the entirety of competition law, but it sure as balls is the catch-all theory under which this is being pursued. See: http://europa.eu/rapid/press-release_IP-19-4291_en.htm http://europa.eu/rapid/press-release_IP-19-4291_en.htm >If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).
  - gamblor956 7y ago
    You need to re-read the announcement. It literally says they are looking into whether Amazon acted in an anti competitive manner and abused its market position. Half of the announcement is them listing actions that are not abuse of dominance. You also need to reread the section on EU antitrust you posted, since abuse of dominance is just one of many potential antitrust concerns they can investigate.