4 ms·

What really is the issue? That Amazon is leveraging its success to be successful? It's unfair that Amazon is able to see that a product category is doing well s

What really is the issue? That Amazon is leveraging its success to be successful? It's unfair that Amazon is able to see that a product category is doing well so it invests its own money into manufacturing a product to sell through its site? Do you really think that if Amazon couldn't use the data from its own site that it wouldn't procure it elsewhere? Before any product is developed there is extensive market research done to get an idea of how much money this product could make. Anyone can and does do this, why should Amazon be punished that its data collection mechanism is cheaper than others?

beagle3 7y ago
It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another. Amazon may or may not legally be a retail monopoly - I do not know the answer. But your question can be rephrased for any monopoly and the answer would be “monopolies should be punished for leveraging their monopoly power in other markets, because that ruins the market for everyone else.” Free markets and democracies are good at a lot of things, but self preservation is not one of them - therefore you need anti-freedom laws.
- baddox 7y ago
  > It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another. This is a very common misconception in the United States. It’s how a lot of defenders of antitrust law want antitrust law to work, but it is not how antitrust law does work. This Supreme Court case explicitly establishes that antitrust laws can be used against companies which obtain a high market share simply by anticipating future demand and responding effectively and efficiently. https://en.wikipedia.org/wiki/United_States_v._Alcoa https://en.wikipedia.org/wiki/United_States_v._Alcoa
  - xxpor 7y ago
    Technically not a supreme court case, but kind of close enough. Also I think there's 0 chance that wouldn't be overturned if tested today.
  - maxwell 7y ago
    Antitrust law in the U.S. is currently based on the dubious "consumer welfare standard". https://en.wikipedia.org/wiki/The_Antitrust_Paradox https://en.wikipedia.org/wiki/The_Antitrust_Paradox
  - TeMPOraL 7y ago
    > antitrust laws can be used against companies which obtain a high market share simply by anticipating future demand and responding effectively and efficiently. This would make sense as a feature. If you subscribe to the view that competitive pressure is the source of progress, then you never want any company to actually win. Like a donkey chasing a carrot on a stick, you want companies to endlessly run towards market dominance, but never actually get there - because once they do, they stop contributing to progress.
    - baddox 7y ago
      How so? The point in this example is that they company was contributing to progress.
  - MiroF 7y ago
    a. That isn't a supreme court case b. This 1945 precedent is not the standard that most modern antitrust (post-Bell breakup) cases are held to.
kharms 7y ago
>What really is the issue? That Amazon is leveraging its success to be successful? The issue is that over the long term, Amazon is lowering the ROI on innovating and taking risks in the consumer goods space. It's able to do this because of its dominance as a marketplace.
- leonardteo 7y ago
  Where it gets grey is when stakeholders privately invest or start companies that sell on the platform. Amazon chose to do it upfront with Amazon Basics but there’s nothing stopping them from creating house brands/labels even at arms length to give the impression that it’s not Amazon.
  - maxwell 7y ago
    > there’s nothing stopping them from creating house brands/labels even at arms length to give the impression that it’s not Amazon They already did this years ago. Amazon has 80+ private-label brands. https://www.businessinsider.com/amazon-owns-these-brands-list-2018-7 https://www.businessinsider.com/amazon-owns-these-brands-lis...
- deleted 7y ago
  [deleted]
deleted 7y ago
[deleted]
ProAm 7y ago
> What really is the issue? This issue us that Amazon also dictates what you are allowed to sell your product for elsewhere. It would be one thing if they just used your own data and created a competing product, but the fact you cannot sell your product cheaper elsewhere is the issue.
- pas 7y ago
  Sorry, maybe I'm too tired to understand this, but why can't you do that exactly?
  - ProAm 7y ago
    The FTC says it's illegal: Anticompetitive practices include activities like price fixing, group boycotts, and exclusionary exclusive dealing contracts or trade association rules, and are generally grouped into two types: agreements between competitors, also referred to as horizontal conduct.
    - pas 6y ago
      Thanks! I meant how would Amazon prevent it at all. (But maybe they would just sue you. But ... can't you just create a separate company to conduct off-Amazon business?)
munificent 7y ago
Vertical monopolies are anti-competitive. It works like this: 1. Amazon clones independent manufacturer's product. 2. Amazon strangles manufacturer because they can promote their own product more and have lower overhead because they control the entire chain. 3. Competitor dies. 4. Amazon has no competition on this product. 5. They raise prices and/or lower quality. 6. Consumers pay more for a shittier product.
- LaEc 7y ago
  Vertical monopolisation is a mixed bag actually. Vertically integrated companies profit more with lower prices in the downstream market than a purely downstream product company because they make profit at both stages. Antitrust law is far kinder to vertical mergers than horizontal mergers.
- toohotatopic 7y ago
  You forget the other big competitors. Sun pushed OpenOffice to cut MS's profits from Office Google and MS are pushing into the Cloud to reduce Amazon's influence Amazon is creating its own ad network and offering Twitch to reign in Google Walmart is slowly creating its own global online shopping platform to compete with Amazon Should Amazon ever have no competitor, monopoly regulations would kick in. But usually, all the other big players will make sure that Amazon has enough competition to not be invincible. It's not fun for small players, but they obviously don't care enough to organize and take their products off Amazon. Btw, Amazon does not necessarily have less overhead due to Price's law: [1] >The square root of the number of people in a domain do 50% of the work. Should Amazon expand into every business, they would be so huge that all their efficiencies and more would be eaten up by the overhead. [1]https://brainlid.org/general/2017/11/28/price-law.html https://brainlid.org/general/2017/11/28/price-law.html
  - MiroF 7y ago
    Price's law is of questionable empirical validity, it's more like a useful guideline/urban legend. On the other hand, there is substantial economic research demonstrating the harms of monopolies, including vertical ones. I'm a bit confused. Are you claiming that because of Price's law, Amazon doesn't actually benefit from it's monopoly position?
sinayev 7y ago
The issue is that Amazon is lying to Congress.
GavinMcG 7y ago
This Yale Law Journal note is a decent start for this conversation: https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...

beagle3 7y ago

It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another. Amazon may or may not legally be a retail monopoly - I do not know the answer. But your question can be rephrased for any monopoly and the answer would be “monopolies should be punished for leveraging their monopoly power in other markets, because that ruins the market for everyone else.” Free markets and democracies are good at a lot of things, but self preservation is not one of them - therefore you need anti-freedom laws.

baddox 7y ago
> It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another. This is a very common misconception in the United States. It’s how a lot of defenders of antitrust law want antitrust law to work, but it is not how antitrust law does work. This Supreme Court case explicitly establishes that antitrust laws can be used against companies which obtain a high market share simply by anticipating future demand and responding effectively and efficiently. https://en.wikipedia.org/wiki/United_States_v._Alcoa https://en.wikipedia.org/wiki/United_States_v._Alcoa
- xxpor 7y ago
  Technically not a supreme court case, but kind of close enough. Also I think there's 0 chance that wouldn't be overturned if tested today.
- maxwell 7y ago
  Antitrust law in the U.S. is currently based on the dubious "consumer welfare standard". https://en.wikipedia.org/wiki/The_Antitrust_Paradox https://en.wikipedia.org/wiki/The_Antitrust_Paradox
- TeMPOraL 7y ago
  > antitrust laws can be used against companies which obtain a high market share simply by anticipating future demand and responding effectively and efficiently. This would make sense as a feature. If you subscribe to the view that competitive pressure is the source of progress, then you never want any company to actually win. Like a donkey chasing a carrot on a stick, you want companies to endlessly run towards market dominance, but never actually get there - because once they do, they stop contributing to progress.
  - baddox 7y ago
    How so? The point in this example is that they company was contributing to progress.
- MiroF 7y ago
  a. That isn't a supreme court case b. This 1945 precedent is not the standard that most modern antitrust (post-Bell breakup) cases are held to.

kharms 7y ago

>What really is the issue? That Amazon is leveraging its success to be successful? The issue is that over the long term, Amazon is lowering the ROI on innovating and taking risks in the consumer goods space. It's able to do this because of its dominance as a marketplace.

leonardteo 7y ago
Where it gets grey is when stakeholders privately invest or start companies that sell on the platform. Amazon chose to do it upfront with Amazon Basics but there’s nothing stopping them from creating house brands/labels even at arms length to give the impression that it’s not Amazon.
- maxwell 7y ago
  > there’s nothing stopping them from creating house brands/labels even at arms length to give the impression that it’s not Amazon They already did this years ago. Amazon has 80+ private-label brands. https://www.businessinsider.com/amazon-owns-these-brands-list-2018-7 https://www.businessinsider.com/amazon-owns-these-brands-lis...
deleted 7y ago
[deleted]

deleted 7y ago

[deleted]

ProAm 7y ago

> What really is the issue? This issue us that Amazon also dictates what you are allowed to sell your product for elsewhere. It would be one thing if they just used your own data and created a competing product, but the fact you cannot sell your product cheaper elsewhere is the issue.

pas 7y ago
Sorry, maybe I'm too tired to understand this, but why can't you do that exactly?
- ProAm 7y ago
  The FTC says it's illegal: Anticompetitive practices include activities like price fixing, group boycotts, and exclusionary exclusive dealing contracts or trade association rules, and are generally grouped into two types: agreements between competitors, also referred to as horizontal conduct.
  - pas 6y ago
    Thanks! I meant how would Amazon prevent it at all. (But maybe they would just sue you. But ... can't you just create a separate company to conduct off-Amazon business?)

munificent 7y ago

Vertical monopolies are anti-competitive. It works like this: 1. Amazon clones independent manufacturer's product. 2. Amazon strangles manufacturer because they can promote their own product more and have lower overhead because they control the entire chain. 3. Competitor dies. 4. Amazon has no competition on this product. 5. They raise prices and/or lower quality. 6. Consumers pay more for a shittier product.

LaEc 7y ago
Vertical monopolisation is a mixed bag actually. Vertically integrated companies profit more with lower prices in the downstream market than a purely downstream product company because they make profit at both stages. Antitrust law is far kinder to vertical mergers than horizontal mergers.
toohotatopic 7y ago
You forget the other big competitors. Sun pushed OpenOffice to cut MS's profits from Office Google and MS are pushing into the Cloud to reduce Amazon's influence Amazon is creating its own ad network and offering Twitch to reign in Google Walmart is slowly creating its own global online shopping platform to compete with Amazon Should Amazon ever have no competitor, monopoly regulations would kick in. But usually, all the other big players will make sure that Amazon has enough competition to not be invincible. It's not fun for small players, but they obviously don't care enough to organize and take their products off Amazon. Btw, Amazon does not necessarily have less overhead due to Price's law: [1] >The square root of the number of people in a domain do 50% of the work. Should Amazon expand into every business, they would be so huge that all their efficiencies and more would be eaten up by the overhead. [1]https://brainlid.org/general/2017/11/28/price-law.html https://brainlid.org/general/2017/11/28/price-law.html
- MiroF 7y ago
  Price's law is of questionable empirical validity, it's more like a useful guideline/urban legend. On the other hand, there is substantial economic research demonstrating the harms of monopolies, including vertical ones. I'm a bit confused. Are you claiming that because of Price's law, Amazon doesn't actually benefit from it's monopoly position?

sinayev 7y ago

The issue is that Amazon is lying to Congress.

GavinMcG 7y ago

This Yale Law Journal note is a decent start for this conversation: https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...