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Amazon Is Accused of Forcing Up Prices in Antitrust Complaint

371 points by ikeboy 7y ago

Apofis 7y ago
They've been driving prices to rock-bottom for so long, it's pretty ironic that they get sued for trying to raise prices. Such is life.
- gdulli 7y ago
  I think they spent many years investing in creating that image for themselves, and did so successfully enough that people have taken it as fact and no longer question it. But it's been gradually becoming less true for years. They're no longer subsidizing purchases the way they used to. The reason they were so aggressive about forcing Prime onto people was to engineer the behavior into people of buying from Amazon by default. Rather than ask questions about where's the best place to buy. For something I can get at Best Buy, for example, I wouldn't buy online and wait for shipping, I use their price match (if I need to) and get it same day. And often when I look up the same item at different online retailers, the price is the same or one site undercuts the other by a penny. Not a coincidence, they all have to stay competitive.
- throwaway_tech 7y ago
  Not really ironic, selling products at a loss to drive others out of business then raising prices on consumers after you have driven your competitors out of business is the definition of anti-competitive behavior.
  - Apofis 7y ago
    That's retail in a nutshell though.
    - Alupis 7y ago
      Not in this case. It's FBA fees that are out of line with other 3PL providers - and Amazon's punishment for sellers that do not use FBA coupled together, that make for more expensive products as sellers have to increase price to stay profitable. That unfairly harms the consumer, which is the basis for this Anti-Trust argument. Effectively, Amazon has built the world's largest Marketplace by losing billions and billions for years and years, turned said Marketplace into an almost necessity to sell on, decided it will also sell on said Marketplace often at unfair prices below manufacturing cost of the goods, and now has made their own Logistics Network an effective requirement for selling on the very same Marketplace.
      - Dylan16807 7y ago
        Yeah, the FBA fees are ridiculous for small items, especially considering that Prime is supposed to be paying for the two-day shipping.
        BeetleB 7y ago
        I used to sell FBA. I calculated that if the price is below about $8.50, then I will make no money - it'll all be eaten up by Amazon fees (some fees are fixed - not a percentage). If I sell at $10, I get about $1.25. Above that it's somewhat linear (e.g. sell at $20 and you pocket about $10, etc). In my case, this wasn't a problem. I chose to get into the market specifically to sell FBA. As such, I knew cheap items were not viable for FBA, so I didn't sell cheap items on it.
        brianwawok 7y ago
        FYI Amazon has a program called small and light that is designed for this < $10 items if they are small.
        Alupis 7y ago
        The minimum commission fee of $1 still takes a large byte out of that though. (Commission fees being in addition to FBA fees) That minimum commission fee is the reason you don't see anything on Amazon for below $6 (unless there's some weird accounting going on for the seller). Above $6, the fee turns into a percentage and is easier to manage. That fee is also the reason you'll often see packs of 3 or some item when you only want 1... it's just not profitable to sell the 1 at a reasonable price anymore. As an aside, the SNL program doesn't get all the same benefits as FBA. In some cases you don't get the Prime badge, and in other cases you're an "Add-on Item" to get free shipping for the buyer.
  - indue 7y ago
    Predatory pricing is a myth.
- gmiller123456 7y ago
  I disagree. It's been my experience that Amazon very rarely has the lowest price. They prefer to charge higher fees for listing than places like Ebay and hope people choose Amazon just due to brand recognition.
  - Sendotsh 7y ago
    Yeah I’ve consistently found amazon to be more expensive than other online stores and even brick & mortar sometimes, at least here in Australia. They USED to be cheaper for everything, but not for a while now. Amazon is good for the occasional sales, stuff that’s hard to find locally, or stuff I need quickly. That’s about it.
    - CharlesColeman 7y ago
      > They USED to be cheaper for everything, but not for a while now. Yeah, and their website isn't even that good to boot (search sucks, for instance). I think they're coasting based on customer inertia and market dominance.
- riazrizvi 7y ago
  Depends who’s prices. When Amazon corners a market with their own service they drive prices up (in the article the seller has to use Amazon Logistics). When Amazon sells your book, it’s your price, then Amazon demands that you sell through them at your lowest price, in their TOS you aren’t allowed to sell your book anywhere else for less. Of course there is almost no resistance to their dominance because we live in a time where legislators favor large businesses (because Citizens United). Examples of a broken regulatory environment... FCC turns a blind eye to deceptive practices like Amazon’s false advertising (BuyNow button for ebooks that you don’t really buy). The patent office gives patents for trivial improvements like the OneClick purchase button, which obviously helps large businesses with big legal expense accounts. And the grand daddy of anti-competition is the ability of technology giants to spy on other businesses, Amazon, Google, Apple etc snoop via their platforms and analytics services to choke out competitive threats. How do they choke them out? They control the search engines and browsing platforms as biased referees, so they decide what we see via recommendation tweaking (which is also why the Advanced Search features in these platforms, appstores, market places, search engines, are quietly disappearing, they make it harder to skew the playing field).
- heavyset_go 7y ago
  I can't even remember the last time Amazon had the lower prices than other online retailers. The cost of "free shipping" and Amazon's fees are very much baked into the price of each item on their site.
- canada_dry 7y ago
  > driving prices to rock-bottom No. They've been driving cost to rock-bottom - not price. It's margin they're after. Their 'dynamic pricing' is the biggest issue. It's completely opaque to everyone except Amazon's algorithms that want to maximize margins/profit. E.g. frequently items will be at some discount level one moment, but then based on some trigger (e.g. increased views) it leaps up. I've have many cases where I found an item on sale - sent the link a friend and by the time they go look (sometimes just minutes later) the price has jumped. Look at camelcamelcamel and see the wild price graphs - and then understand that Amazon doesn't even share many of the intraday price changes with 3rd party services.
  - toasterlovin 7y ago
    FWIW, Amazon does not do dynamic pricing for offers from 3rd party sellers.
- Magnets 7y ago
  As I read it, they are using their dominance to force sellers to use their logistics service while increasing the price sellers pay for that logistics service with threat of being de-ranked if they don't use it. All they will say is that buyers prefer amazon logistics and will pull out some user surveys and delivery rate statistics to prove it.
crb002 7y ago
Paywall. I don’t see the argument. Walmart and others are sucking while Bezos is executing. Unless Bezos crosses the line with onerous contracts not allowing manufacturers to sell with other online retailers he should be ok. Wise for Bezos to put antitrust friendly language in all contracts.
- ilamont 7y ago
  That's exactly what Amazon demands for one of its ebook programs, KDP Select (https://kdp.amazon.com/en_US/select https://kdp.amazon.com/en_US/select): When you choose to enroll your book in KDP Select, you're committing to make the digital format of that book available exclusively through KDP. During the period of exclusivity, you cannot distribute your book digitally anywhere else, including on your website, blogs, etc. Related: If you include a link in an ePub to any other retailer, the book will be rejected by Amazon.
  - jhall1468 7y ago
    You can choose to not use Select, and just use standard KDP. This is an exclusivity agreement. You don't get to release your ebook elsewhere in exchange for higher royalties.
- fenwick67 7y ago
  > Walmart and others are sucking while Bezos is executing I don't know what world you're in, but Walmart is kicking ass as a company and is still posting a net profit larger than Amazon's, despite Amazon making boats of money off of AWS. At this point people prefer shopping at Walmart to Amazon. https://www.cnbc.com/2019/11/04/walmart-appears-to-be-gaining-ground-against-amazon.html https://www.cnbc.com/2019/11/04/walmart-appears-to-be-gainin...
  - jhall1468 7y ago
    Walmart generates $500B in revenue compared to Amazon's $230B. While you aren't wrong that Walmart is doing well, comparing net profit between companies when one is 2x the size of the other is dishonest. It's especially dishonest when guidance from Amazon was a net decrease as they invested into 1 day shipping.
ikeboy 7y ago
https://outline.com/2fHaL8 https://outline.com/2fHaL8
ikeboy 7y ago
The argument is they're tying usage of FBA to selling on their marketplace, which unfairly boosts FBA usage even if more expensive or worse service than competitors such as FedEx or UPS. In particular, if you use FBA you aren't held responsible by Amazon for late deliveries but if you use other services you are. Also, their data shows only 15% of Amazon deliveries are actually meeting the 2-day timeline.
- Alupis 7y ago
  I can say firsthand, using FBA for a product absolutely boosts it's search ranking, and leads to an increase in sales. Sometimes dramatically so. It's not uncommon to offer both FBA and FBM on the same item, in case you run out of stock of the FBA item or vice-versa. Same price, same delivery dates... but the FBA product will outpace your FBM product dramatically. So those merchants that try to FBM exclusively are put at a double disadvantage - rank worse in search, and get harshly penalized if a product is delivered late (even though once it leaves your warehouse, it's up to the USPS/UPS/FedEx meet their delivery promise). Also, the article alleges FBA fees are not in-line with market rates for 3PL, and the close tie between Amazon's Logistics Network and Marketplace has caused a price increase to consumers, which harms consumers unfairly - thus the Anti-Trust case.
  - privateSFacct 7y ago
    What about purchasers who are tired of crappy FBM shipments? I bought a book on amazon FBM. It cost like $100. Turns out it was shipping from overseas and took 3 MONTHS to get to me (I was sure it would not). I had to buy a different one in the meantime. I've bought FBM and had stuff come from china in a flimsy envelope crushed. I've no idea how they can justify shipping this crap internationally. FBA from a customer standpoint is simply more predictable. I can get extremely short delivery times (most are next day where I am for some reason instead of two day). Did they do any analysis of whether customers are willing to pay more for FBA? I wouldn't be surprised if they were. You also tend to get fewer boxes if you do FBA. I did a bunch of third party orders once for an electronics project (think 30 different small things) most were FBM and all came in separate small boxes which is ridiculous.
rpmisms 7y ago
I have a hard time not believing this to some degree. Amazon is incredibly big and powerful, this would be trivial for them.
ajhurliman 7y ago
I think they're going to have a hard time proving they were "forced" into using FBA.
- femto113 7y ago
  My thought too. "Pushing" someone to use a service is very different from "requiring" them to use it. Amazon can also make a very strong case that FBA maximizes consumer value even if it doesn't minimize price.
whack 7y ago
> The merchant alleges he could offer the same products on Amazon at lower prices and with faster, more reliable delivery if he could handle logistics himself without being penalized for late deliveries. Merchants using Amazon’s logistics services don’t face penalties for delivery mishaps, which is why many choose to use it even when better options are available, the letter states. It would be great if someone had numbers on how often Amazon logistics are late, as compared to third party services. If their logistics are indeed much more reliable, then I can understand where their policy is coming from. If a merchant wants to use a 3rd party service that is cheaper/faster but less reliable, that does seem like something the merchant should be penalized for. It all depends on their relative rates of reliability though. Either way, the optics certainly don't seem to favor Amazon here. They may have to restructure their pricing and penalties, to avoid the perception of bias.
- ikeboy 7y ago
  There's numbers for Amazon logistics in the article. More to the point, Amazon themselves use UPS/Fedex under the hood in addition to their own system. But they hold sellers responsible for using UPS/Fedex if it's late only when not using FBA.
  - wUabkSG6L5Bfa5 7y ago
    Considering that it takes Amazon-level resources to get UPS/FedEx to track down errant shipments and honor claims, this seems like a fine idea at first glance.
    - amluto 7y ago
      In my personal experience, “Amazon-level logistics” is just about the least reliable way to get anything to show up on time.
      - colejohnson66 7y ago
        In my experience, it’s the opposite. I’ve had hundreds of packages delivered by AMZL, and only one was late.
BeetleB 7y ago
I was looking recently into how commercial real estate works. Typically when you rent out a space in a plaza, your expenses are very predictable for N years. The typical contract with the plaza owner lasts many years (could even be over a decade). This way you know you're not going to get sudden rent increases, etc. On the flip side the rate of return for the owner is also lower than normal - the risk is lower (guaranteed income for many years) and so is the return. In that sense, one definitely should not make an analogy with a traditional marketplace. The terms you agree to when selling on the Amazon marketplace is typically orders of magnitude worse than what you'd get at a plaza - imagine Amazon committing not to raise costs for the next 5 years. Amazon isn't a market place - it's a store. When you sell on Amazon, think of it as selling it at Walmart - you don't get to pick where Walmart will place it on the shelves, and you have no guarantee that Walmart won't drop your product altogether.
- themagician 7y ago
  This is how 99% of people think about Amazon. Unfortunately, it's not quite correct. The Amazon.com Retail team does, in fact, operate a store. The marketplace is the behind the scenes network for third party sellers that make their catalog seem so large. Most people don't even know the second part exists, but it does. When you buy from Amazon you aren't always buying from Amazon. Sometimes you are buying from some random person that Amazon.com Retail is actually competing with. And sometimes you buy from some random person, although Amazon does the fulfillment. It gets quite convoluted.
buboard 7y ago
Source without paywall: https://www.latimes.com/business/technology/story/2019-11-08/amazon-antitrust-complaint https://www.latimes.com/business/technology/story/2019-11-08...
joeblau 7y ago
I have a buddy who sells some custom widget on his own personal website and when we were snowboarding in whistler in March of this year, he complained about this. He was saying that if his widget is $5 on Amazon, he can't sell it for $4 on his site or Amazon will take his product down. He also does 2 day shipping, but unless he pays Amazon for a prime badge, he can't advertise that through Amazon.
- themagician 7y ago
  That's both not true and not the issue here. If he sells some custom widget he can do whatever he wants with it. Amazon won't even know and/or care about what happens off Amazon. The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget. You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance.
  - ikeboy 7y ago
    >Amazon won't even know and/or care about what happens off Amazon Incorrect. They used to ban it, now it's officially allowed but they will actively monitor and block the buybox if your price is cheaper elsewhere. I've spoken to many sellers caught by this.
  - joeblau 7y ago
    > That's both not true and not the issue here. It was true when he told me, Amazon reversed its decision on this in March[1]. > The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget. His widget doesn't actually cost $5, it's more. I'm just using the price as an example because he was extremely concerned about competitors stealing his product. He doesn't want Amazon anywhere near it because this profit margins are really high on his product. If Amazon.com's "Retail team" found out what it was, they would probably find his supplier or a knock off and try and make a low quality "Basics" version of it. > You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance. He doesn't want to be fulfilled by prime, he manages his own shipping pipeline just a good as Amazon's. Amazon places rules on its merchants so that there is no way to compete without fully capitulating to Amazon's shipping policies. Oh and I used to work at Amazon so these practices are not surprising. [1] - https://www.inc.com/guadalupe-gonzalez/amazon-removes-price-parity-not-fair-price-rule-third-party-sellers-antitrust-violations.html https://www.inc.com/guadalupe-gonzalez/amazon-removes-price-...
helpPeople 7y ago
I don't sell my product on Amazon due to their outrageous terms. I don't buy things on Amazon because it's expensive. Maybe this matters more to giants who are nearly forced to. But it can be avoided.
- themagician 7y ago
  As a manufacturer you have no choice. If you make a product that has even moderate distribution it will end up on Amazon. You either take control of your products on Amazon or deal with the consequences: counterfeit goods, used as new, damaged as new, bad customer service, people undercutting all other retail partners, etc.. The customer doesn't care. They will blame you. It's kind of funny that Amazon actually has a much worse problem with all the things that kept people away from eBay.
ilaksh 7y ago
The technology monopolies are popular because people like to have platforms. But they have a built in conflict of interest. Decentralization technologies can help use build public platforms without the conflict of interest.
cerradokids 7y ago
This reminds me of an old joke: 3 businessmen are in prison, and they ask each other why each one is there. - I'm here because my prices were lower than the other companies, so I was charged for dumping the other companies. - I'm here because my prices were higher than my competitors, so I was charged for economic power abuse. - Well, I'm here because my prices were equal than everyone else, so I was charged for cartel formation.
covertbeginner 7y ago
adfasdf
ummonk 7y ago
I have lots of problems with Amazon (counterfeiting / inventory commingling issues, treatment of employees), but trying to standardize customer experiences by pushing sellers into their own logistics system is not one of them.
zer00eyz 7y ago
> "It accuses Amazon of “tying” its marketplace and logistics services together, an antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established." Amazon has robust competitors in the shopping space (hello Walmart). And does not often serve niche markets. Hobby electronics (think old radio shack or current adafruit), sewing, wood screws in volume are all places where amazon falls flat and there is plenty of room for others to succeed. What amazon is doing is brilliant, it isn't monopolistic, it is vertical integration. Something that doesn't happen as much as it once did.
- nickfromseattle 7y ago
  >Amazon has robust competitors in the shopping space Amazon owns 49% of US online retail. [0] If 49% still allows for robust competitors, at what % does that change? https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-commerce-market-is-now-49-or-5-of-all-retail-spend/ https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-...
  - colmvp 7y ago
    Online retail is only around 10-11% of total retail sales in the United States. https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf https://www.census.gov/retail/mrts/www/data/pdf/ec_current.p... Amazon has a leg up on Walmart for online sales, but Walmart is still the number one retailer in the U.S.
- banannaise 7y ago
  > Amazon has robust competitors in the shopping space This complaint isn't about the shopping space, it's about the selling space. Small businesses who want to sell online will typically get a whole lot of nowhere if they don't use Amazon.
programmertote 7y ago
A bit tangential. But I have posted what seems to be a shady practice by Amazon's Prime Video. A few days ago, I was watching Goodnight Mommy (2014) on Prime video (I'm a prime subscriber). I stopped before I finished the movie and went to sleep. But this evening, I decided to resume the movie, but Prime wants to charge me $3.99 to rent it. This is not the first time I have noticed this. There were a couple of other movies that I returned to watch in a matter of a couple of days and Prime decided to start renting it. What's worse, a couple of days after seeing them asking for $3.99 to rent that movie, the video became available again for free for me to watch! I feel like it could either be coincidental (i.e. Prime taking the movie off for rental) or by design. Regardless, I lost my faith in Prime a little after repeated experience like that.
- dleslie 7y ago
  I noticed similar behaviour in Amazon Music, and the described behaviour in Prime Video. There does seem to be the appearance of bait-and-switch.
- jitix 7y ago
  I had the same experience watching Mr Robot season 3. I just waited a week and it came back to watch for free. Seems like a classic bait and switch and probably shady.
  - programmertote 7y ago
    So it's real. Thanks for confirming my experience!
  - not_a_cop75 7y ago
    Could this same effect not be produced by a limited number licensing arrangement?
downrightmike 7y ago
If you guys read 'the everything store', Amazon originally let other merchants sell on the platform because Amazon could get the metrics of what sells well and copy it, and get rid of the merchant. They've been anti competitive since they started allowing merchants to take the risk and then force them out. Amazon basics is the result. Usually, but Amazon is really screwing themselves if they jack up prices as keeping prices low for consumers is really the only thing keeping them from fitting the definition of monopoly and that is what is keeping the regulators at bay. They undo that, and they make themselves a huge target.

371 points by ikeboy 7y ago

They've been driving prices to rock-bottom for so long, it's pretty ironic that they get sued for trying to raise prices. Such is life.

gdulli 7y ago
I think they spent many years investing in creating that image for themselves, and did so successfully enough that people have taken it as fact and no longer question it. But it's been gradually becoming less true for years. They're no longer subsidizing purchases the way they used to. The reason they were so aggressive about forcing Prime onto people was to engineer the behavior into people of buying from Amazon by default. Rather than ask questions about where's the best place to buy. For something I can get at Best Buy, for example, I wouldn't buy online and wait for shipping, I use their price match (if I need to) and get it same day. And often when I look up the same item at different online retailers, the price is the same or one site undercuts the other by a penny. Not a coincidence, they all have to stay competitive.
throwaway_tech 7y ago
Not really ironic, selling products at a loss to drive others out of business then raising prices on consumers after you have driven your competitors out of business is the definition of anti-competitive behavior.
- Apofis 7y ago
  That's retail in a nutshell though.
  - Alupis 7y ago
    Not in this case. It's FBA fees that are out of line with other 3PL providers - and Amazon's punishment for sellers that do not use FBA coupled together, that make for more expensive products as sellers have to increase price to stay profitable. That unfairly harms the consumer, which is the basis for this Anti-Trust argument. Effectively, Amazon has built the world's largest Marketplace by losing billions and billions for years and years, turned said Marketplace into an almost necessity to sell on, decided it will also sell on said Marketplace often at unfair prices below manufacturing cost of the goods, and now has made their own Logistics Network an effective requirement for selling on the very same Marketplace.
    - Dylan16807 7y ago
      Yeah, the FBA fees are ridiculous for small items, especially considering that Prime is supposed to be paying for the two-day shipping.
      - BeetleB 7y ago
        I used to sell FBA. I calculated that if the price is below about $8.50, then I will make no money - it'll all be eaten up by Amazon fees (some fees are fixed - not a percentage). If I sell at $10, I get about $1.25. Above that it's somewhat linear (e.g. sell at $20 and you pocket about $10, etc). In my case, this wasn't a problem. I chose to get into the market specifically to sell FBA. As such, I knew cheap items were not viable for FBA, so I didn't sell cheap items on it.
        brianwawok 7y ago
        FYI Amazon has a program called small and light that is designed for this < $10 items if they are small.
        Alupis 7y ago
        The minimum commission fee of $1 still takes a large byte out of that though. (Commission fees being in addition to FBA fees) That minimum commission fee is the reason you don't see anything on Amazon for below $6 (unless there's some weird accounting going on for the seller). Above $6, the fee turns into a percentage and is easier to manage. That fee is also the reason you'll often see packs of 3 or some item when you only want 1... it's just not profitable to sell the 1 at a reasonable price anymore. As an aside, the SNL program doesn't get all the same benefits as FBA. In some cases you don't get the Prime badge, and in other cases you're an "Add-on Item" to get free shipping for the buyer.
- indue 7y ago
  Predatory pricing is a myth.
gmiller123456 7y ago
I disagree. It's been my experience that Amazon very rarely has the lowest price. They prefer to charge higher fees for listing than places like Ebay and hope people choose Amazon just due to brand recognition.
- Sendotsh 7y ago
  Yeah I’ve consistently found amazon to be more expensive than other online stores and even brick & mortar sometimes, at least here in Australia. They USED to be cheaper for everything, but not for a while now. Amazon is good for the occasional sales, stuff that’s hard to find locally, or stuff I need quickly. That’s about it.
  - CharlesColeman 7y ago
    > They USED to be cheaper for everything, but not for a while now. Yeah, and their website isn't even that good to boot (search sucks, for instance). I think they're coasting based on customer inertia and market dominance.
riazrizvi 7y ago
Depends who’s prices. When Amazon corners a market with their own service they drive prices up (in the article the seller has to use Amazon Logistics). When Amazon sells your book, it’s your price, then Amazon demands that you sell through them at your lowest price, in their TOS you aren’t allowed to sell your book anywhere else for less. Of course there is almost no resistance to their dominance because we live in a time where legislators favor large businesses (because Citizens United). Examples of a broken regulatory environment... FCC turns a blind eye to deceptive practices like Amazon’s false advertising (BuyNow button for ebooks that you don’t really buy). The patent office gives patents for trivial improvements like the OneClick purchase button, which obviously helps large businesses with big legal expense accounts. And the grand daddy of anti-competition is the ability of technology giants to spy on other businesses, Amazon, Google, Apple etc snoop via their platforms and analytics services to choke out competitive threats. How do they choke them out? They control the search engines and browsing platforms as biased referees, so they decide what we see via recommendation tweaking (which is also why the Advanced Search features in these platforms, appstores, market places, search engines, are quietly disappearing, they make it harder to skew the playing field).
heavyset_go 7y ago
I can't even remember the last time Amazon had the lower prices than other online retailers. The cost of "free shipping" and Amazon's fees are very much baked into the price of each item on their site.
canada_dry 7y ago
> driving prices to rock-bottom No. They've been driving cost to rock-bottom - not price. It's margin they're after. Their 'dynamic pricing' is the biggest issue. It's completely opaque to everyone except Amazon's algorithms that want to maximize margins/profit. E.g. frequently items will be at some discount level one moment, but then based on some trigger (e.g. increased views) it leaps up. I've have many cases where I found an item on sale - sent the link a friend and by the time they go look (sometimes just minutes later) the price has jumped. Look at camelcamelcamel and see the wild price graphs - and then understand that Amazon doesn't even share many of the intraday price changes with 3rd party services.
- toasterlovin 7y ago
  FWIW, Amazon does not do dynamic pricing for offers from 3rd party sellers.
Magnets 7y ago
As I read it, they are using their dominance to force sellers to use their logistics service while increasing the price sellers pay for that logistics service with threat of being de-ranked if they don't use it. All they will say is that buyers prefer amazon logistics and will pull out some user surveys and delivery rate statistics to prove it.

crb002 7y ago

Paywall. I don’t see the argument. Walmart and others are sucking while Bezos is executing. Unless Bezos crosses the line with onerous contracts not allowing manufacturers to sell with other online retailers he should be ok. Wise for Bezos to put antitrust friendly language in all contracts.

ilamont 7y ago
That's exactly what Amazon demands for one of its ebook programs, KDP Select (https://kdp.amazon.com/en_US/select https://kdp.amazon.com/en_US/select): When you choose to enroll your book in KDP Select, you're committing to make the digital format of that book available exclusively through KDP. During the period of exclusivity, you cannot distribute your book digitally anywhere else, including on your website, blogs, etc. Related: If you include a link in an ePub to any other retailer, the book will be rejected by Amazon.
- jhall1468 7y ago
  You can choose to not use Select, and just use standard KDP. This is an exclusivity agreement. You don't get to release your ebook elsewhere in exchange for higher royalties.
fenwick67 7y ago
> Walmart and others are sucking while Bezos is executing I don't know what world you're in, but Walmart is kicking ass as a company and is still posting a net profit larger than Amazon's, despite Amazon making boats of money off of AWS. At this point people prefer shopping at Walmart to Amazon. https://www.cnbc.com/2019/11/04/walmart-appears-to-be-gaining-ground-against-amazon.html https://www.cnbc.com/2019/11/04/walmart-appears-to-be-gainin...
- jhall1468 7y ago
  Walmart generates $500B in revenue compared to Amazon's $230B. While you aren't wrong that Walmart is doing well, comparing net profit between companies when one is 2x the size of the other is dishonest. It's especially dishonest when guidance from Amazon was a net decrease as they invested into 1 day shipping.

ikeboy 7y ago

https://outline.com/2fHaL8 https://outline.com/2fHaL8

ikeboy 7y ago

The argument is they're tying usage of FBA to selling on their marketplace, which unfairly boosts FBA usage even if more expensive or worse service than competitors such as FedEx or UPS. In particular, if you use FBA you aren't held responsible by Amazon for late deliveries but if you use other services you are. Also, their data shows only 15% of Amazon deliveries are actually meeting the 2-day timeline.

Alupis 7y ago
I can say firsthand, using FBA for a product absolutely boosts it's search ranking, and leads to an increase in sales. Sometimes dramatically so. It's not uncommon to offer both FBA and FBM on the same item, in case you run out of stock of the FBA item or vice-versa. Same price, same delivery dates... but the FBA product will outpace your FBM product dramatically. So those merchants that try to FBM exclusively are put at a double disadvantage - rank worse in search, and get harshly penalized if a product is delivered late (even though once it leaves your warehouse, it's up to the USPS/UPS/FedEx meet their delivery promise). Also, the article alleges FBA fees are not in-line with market rates for 3PL, and the close tie between Amazon's Logistics Network and Marketplace has caused a price increase to consumers, which harms consumers unfairly - thus the Anti-Trust case.
- privateSFacct 7y ago
  What about purchasers who are tired of crappy FBM shipments? I bought a book on amazon FBM. It cost like $100. Turns out it was shipping from overseas and took 3 MONTHS to get to me (I was sure it would not). I had to buy a different one in the meantime. I've bought FBM and had stuff come from china in a flimsy envelope crushed. I've no idea how they can justify shipping this crap internationally. FBA from a customer standpoint is simply more predictable. I can get extremely short delivery times (most are next day where I am for some reason instead of two day). Did they do any analysis of whether customers are willing to pay more for FBA? I wouldn't be surprised if they were. You also tend to get fewer boxes if you do FBA. I did a bunch of third party orders once for an electronics project (think 30 different small things) most were FBM and all came in separate small boxes which is ridiculous.

rpmisms 7y ago

I have a hard time not believing this to some degree. Amazon is incredibly big and powerful, this would be trivial for them.

ajhurliman 7y ago

I think they're going to have a hard time proving they were "forced" into using FBA.

femto113 7y ago
My thought too. "Pushing" someone to use a service is very different from "requiring" them to use it. Amazon can also make a very strong case that FBA maximizes consumer value even if it doesn't minimize price.

whack 7y ago

> The merchant alleges he could offer the same products on Amazon at lower prices and with faster, more reliable delivery if he could handle logistics himself without being penalized for late deliveries. Merchants using Amazon’s logistics services don’t face penalties for delivery mishaps, which is why many choose to use it even when better options are available, the letter states. It would be great if someone had numbers on how often Amazon logistics are late, as compared to third party services. If their logistics are indeed much more reliable, then I can understand where their policy is coming from. If a merchant wants to use a 3rd party service that is cheaper/faster but less reliable, that does seem like something the merchant should be penalized for. It all depends on their relative rates of reliability though. Either way, the optics certainly don't seem to favor Amazon here. They may have to restructure their pricing and penalties, to avoid the perception of bias.

ikeboy 7y ago
There's numbers for Amazon logistics in the article. More to the point, Amazon themselves use UPS/Fedex under the hood in addition to their own system. But they hold sellers responsible for using UPS/Fedex if it's late only when not using FBA.
- wUabkSG6L5Bfa5 7y ago
  Considering that it takes Amazon-level resources to get UPS/FedEx to track down errant shipments and honor claims, this seems like a fine idea at first glance.
  - amluto 7y ago
    In my personal experience, “Amazon-level logistics” is just about the least reliable way to get anything to show up on time.
    - colejohnson66 7y ago
      In my experience, it’s the opposite. I’ve had hundreds of packages delivered by AMZL, and only one was late.

BeetleB 7y ago

I was looking recently into how commercial real estate works. Typically when you rent out a space in a plaza, your expenses are very predictable for N years. The typical contract with the plaza owner lasts many years (could even be over a decade). This way you know you're not going to get sudden rent increases, etc. On the flip side the rate of return for the owner is also lower than normal - the risk is lower (guaranteed income for many years) and so is the return. In that sense, one definitely should not make an analogy with a traditional marketplace. The terms you agree to when selling on the Amazon marketplace is typically orders of magnitude worse than what you'd get at a plaza - imagine Amazon committing not to raise costs for the next 5 years. Amazon isn't a market place - it's a store. When you sell on Amazon, think of it as selling it at Walmart - you don't get to pick where Walmart will place it on the shelves, and you have no guarantee that Walmart won't drop your product altogether.

themagician 7y ago
This is how 99% of people think about Amazon. Unfortunately, it's not quite correct. The Amazon.com Retail team does, in fact, operate a store. The marketplace is the behind the scenes network for third party sellers that make their catalog seem so large. Most people don't even know the second part exists, but it does. When you buy from Amazon you aren't always buying from Amazon. Sometimes you are buying from some random person that Amazon.com Retail is actually competing with. And sometimes you buy from some random person, although Amazon does the fulfillment. It gets quite convoluted.

buboard 7y ago

Source without paywall: https://www.latimes.com/business/technology/story/2019-11-08/amazon-antitrust-complaint https://www.latimes.com/business/technology/story/2019-11-08...

joeblau 7y ago

I have a buddy who sells some custom widget on his own personal website and when we were snowboarding in whistler in March of this year, he complained about this. He was saying that if his widget is $5 on Amazon, he can't sell it for $4 on his site or Amazon will take his product down. He also does 2 day shipping, but unless he pays Amazon for a prime badge, he can't advertise that through Amazon.

themagician 7y ago
That's both not true and not the issue here. If he sells some custom widget he can do whatever he wants with it. Amazon won't even know and/or care about what happens off Amazon. The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget. You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance.
- ikeboy 7y ago
  >Amazon won't even know and/or care about what happens off Amazon Incorrect. They used to ban it, now it's officially allowed but they will actively monitor and block the buybox if your price is cheaper elsewhere. I've spoken to many sellers caught by this.
- joeblau 7y ago
  > That's both not true and not the issue here. It was true when he told me, Amazon reversed its decision on this in March[1]. > The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget. His widget doesn't actually cost $5, it's more. I'm just using the price as an example because he was extremely concerned about competitors stealing his product. He doesn't want Amazon anywhere near it because this profit margins are really high on his product. If Amazon.com's "Retail team" found out what it was, they would probably find his supplier or a knock off and try and make a low quality "Basics" version of it. > You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance. He doesn't want to be fulfilled by prime, he manages his own shipping pipeline just a good as Amazon's. Amazon places rules on its merchants so that there is no way to compete without fully capitulating to Amazon's shipping policies. Oh and I used to work at Amazon so these practices are not surprising. [1] - https://www.inc.com/guadalupe-gonzalez/amazon-removes-price-parity-not-fair-price-rule-third-party-sellers-antitrust-violations.html https://www.inc.com/guadalupe-gonzalez/amazon-removes-price-...

helpPeople 7y ago

I don't sell my product on Amazon due to their outrageous terms. I don't buy things on Amazon because it's expensive. Maybe this matters more to giants who are nearly forced to. But it can be avoided.

themagician 7y ago
As a manufacturer you have no choice. If you make a product that has even moderate distribution it will end up on Amazon. You either take control of your products on Amazon or deal with the consequences: counterfeit goods, used as new, damaged as new, bad customer service, people undercutting all other retail partners, etc.. The customer doesn't care. They will blame you. It's kind of funny that Amazon actually has a much worse problem with all the things that kept people away from eBay.

ilaksh 7y ago

The technology monopolies are popular because people like to have platforms. But they have a built in conflict of interest. Decentralization technologies can help use build public platforms without the conflict of interest.

cerradokids 7y ago

This reminds me of an old joke: 3 businessmen are in prison, and they ask each other why each one is there. - I'm here because my prices were lower than the other companies, so I was charged for dumping the other companies. - I'm here because my prices were higher than my competitors, so I was charged for economic power abuse. - Well, I'm here because my prices were equal than everyone else, so I was charged for cartel formation.

covertbeginner 7y ago

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ummonk 7y ago

I have lots of problems with Amazon (counterfeiting / inventory commingling issues, treatment of employees), but trying to standardize customer experiences by pushing sellers into their own logistics system is not one of them.

zer00eyz 7y ago

> "It accuses Amazon of “tying” its marketplace and logistics services together, an antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established." Amazon has robust competitors in the shopping space (hello Walmart). And does not often serve niche markets. Hobby electronics (think old radio shack or current adafruit), sewing, wood screws in volume are all places where amazon falls flat and there is plenty of room for others to succeed. What amazon is doing is brilliant, it isn't monopolistic, it is vertical integration. Something that doesn't happen as much as it once did.

nickfromseattle 7y ago
>Amazon has robust competitors in the shopping space Amazon owns 49% of US online retail. [0] If 49% still allows for robust competitors, at what % does that change? https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-commerce-market-is-now-49-or-5-of-all-retail-spend/ https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-...
- colmvp 7y ago
  Online retail is only around 10-11% of total retail sales in the United States. https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf https://www.census.gov/retail/mrts/www/data/pdf/ec_current.p... Amazon has a leg up on Walmart for online sales, but Walmart is still the number one retailer in the U.S.
banannaise 7y ago
> Amazon has robust competitors in the shopping space This complaint isn't about the shopping space, it's about the selling space. Small businesses who want to sell online will typically get a whole lot of nowhere if they don't use Amazon.

programmertote 7y ago

A bit tangential. But I have posted what seems to be a shady practice by Amazon's Prime Video. A few days ago, I was watching Goodnight Mommy (2014) on Prime video (I'm a prime subscriber). I stopped before I finished the movie and went to sleep. But this evening, I decided to resume the movie, but Prime wants to charge me $3.99 to rent it. This is not the first time I have noticed this. There were a couple of other movies that I returned to watch in a matter of a couple of days and Prime decided to start renting it. What's worse, a couple of days after seeing them asking for $3.99 to rent that movie, the video became available again for free for me to watch! I feel like it could either be coincidental (i.e. Prime taking the movie off for rental) or by design. Regardless, I lost my faith in Prime a little after repeated experience like that.

dleslie 7y ago
I noticed similar behaviour in Amazon Music, and the described behaviour in Prime Video. There does seem to be the appearance of bait-and-switch.
jitix 7y ago
I had the same experience watching Mr Robot season 3. I just waited a week and it came back to watch for free. Seems like a classic bait and switch and probably shady.
- programmertote 7y ago
  So it's real. Thanks for confirming my experience!
- not_a_cop75 7y ago
  Could this same effect not be produced by a limited number licensing arrangement?

downrightmike 7y ago

If you guys read 'the everything store', Amazon originally let other merchants sell on the platform because Amazon could get the metrics of what sells well and copy it, and get rid of the merchant. They've been anti competitive since they started allowing merchants to take the risk and then force them out. Amazon basics is the result. Usually, but Amazon is really screwing themselves if they jack up prices as keeping prices low for consumers is really the only thing keeping them from fitting the definition of monopoly and that is what is keeping the regulators at bay. They undo that, and they make themselves a huge target.