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> but it is hard to say that in the end, consumers are on the loosing end It's quite easy. Amazon is abusing its position to drive others out of business. They

by Dahoon 6y ago

> but it is hard to say that in the end, consumers are on the loosing end It's quite easy. Amazon is abusing its position to drive others out of business. They collect a lot of data and when someone finds a great selling product they move in and take over a big chunk of the market. That can and will hurt the customer. It should be illegal, as it actually is in some markets.

ChrisLomont 6y ago
Amazon's share of the US retail market is too small to call them a monopoly there, and they hold around half of online retailing, again too small to be a monopoly, since there are ample places to get goods elsewhere. Until they're a legal monopoly in some suitable category, they are welcome to do this. One effect may drive amazon competitors to cater to all the sellers. And at any rate, to be the top spot Amazon has to be offering good enough prices to get consumer dollars. For now it benefits the consumer, because they are getting good prices and possibly avoiding lots of junk sellers selling bad goods. Amazon brand good are trustworthy compared to a lot of sellers.
- clairity 6y ago
  it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. it is, in fact, only one metric of many by which monopoly is judged. being a platform business that competes directly with its business customers can be a significant (but not necessarily sufficient) indicator as well.
  - Novukus 6y ago
    I don't know exactly what US anti-trust law says, but German anti-trust law also considers what kind of power you have over competitors and suppliers to decide whether you're behaving anti-competitively. We call it (roughly translated) "Law against constraint of competition". Amazon might qualify as abusing their position under our laws. Unfortunately, it can be difficult to get a case started if the relevant authority isn't paying attention because of how the justice system is structured here and there's a question of how badly companies are actually being impacted in Germany by Amazon's behavior. Our wholesale/retail market seems to be a bit different and far more diverse than in the US.
    - clairity 6y ago
      yes, we have similar kinds of rules, but i imagine the ones in germany have a little more tooth. we in the US just can't seem to punish corporations adequately for any antisocial behavior.
  - ChrisLomont 6y ago
    >it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. It is according to US law. Without a larger percentage, no court will consider anti-trust charges, due to Circuit and Supreme Court cases on what percentage of market control is required. Here's relevant portions from DoJ: "In determining whether a competitor possesses monopoly power in a relevant market, courts typically begin by looking at the firm's market share.(18) " So the typical case starts with percent control.... "Although the courts "have not yet identified a precise level at which monopoly power will be inferred,"(19) they have demanded a dominant market share" So the courts require a threshold..... "the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%."" There's ample more court citations on the DoJ page. Amazon doesn't reach these levels in probably any relevant category they are in. Certainly not for retail sales (Amazon is a tiny portion there), or online sales (less than half), or web services (Amazon ~ 40B out of 350B market). For any company, if you shrink the categories far enough, you can always find a monopoly - Apply has a (near) monopoly on Apple watches, for example. But this is not a monopoly. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
karaterobot 6y ago
> Amazon is abusing its position to drive others out of business. I don't think even the ProPublica article is accusing them of this. What evidence is there that Amazon has purposefully driven sellers out of business, as opposed to just unfairly privileging its own brands? Why would they do this, when they created the marketplace and make a lot of money from it?
- ngokevin 6y ago
  "abusing" is not the right word, but they definitely can make it impossible to compete in many areas. Let's say you made a laptop tray and sold on Amazon, it did well! Then Amazon sees it, makes their own laptop tray, subsidized by economies-of-scale and their shipping network. They feature it higher than yours, bury yours down further, and sell it at much cheaper. It's not like you can compete on Amazon. And let's face it, you're not going to compete making your own store or selling it on brick-and-mortar. Eventually you starve out, you get out of the market, and then they cheapen the product even more to the point of lower product quality. Then at that point, the consumer loses. Seen so many products that used to be high quality, then the product quality got worse over time with cheaper materials, while keeping the same 5-star old reviews
  - nojito 6y ago
    This is what happens in regular B&M stores as well. They will always push their private brand products to their customers.
- Dahoon 6y ago
  When a product suddenly sells a lot (a fidget spinner for example) Amazon starts selling it too. If you cannot buy a better ad placement than Amazon's competing product you will sell less. The sellers that wasn't selling a lot of products already will be dead. If that isn't driving out the competition I don't know what it is. >unfairly privileging its own brands will lead to > drive others out of business

by Dahoon 6y ago

ChrisLomont 6y ago

Amazon's share of the US retail market is too small to call them a monopoly there, and they hold around half of online retailing, again too small to be a monopoly, since there are ample places to get goods elsewhere. Until they're a legal monopoly in some suitable category, they are welcome to do this. One effect may drive amazon competitors to cater to all the sellers. And at any rate, to be the top spot Amazon has to be offering good enough prices to get consumer dollars. For now it benefits the consumer, because they are getting good prices and possibly avoiding lots of junk sellers selling bad goods. Amazon brand good are trustworthy compared to a lot of sellers.

clairity 6y ago
it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. it is, in fact, only one metric of many by which monopoly is judged. being a platform business that competes directly with its business customers can be a significant (but not necessarily sufficient) indicator as well.
- Novukus 6y ago
  I don't know exactly what US anti-trust law says, but German anti-trust law also considers what kind of power you have over competitors and suppliers to decide whether you're behaving anti-competitively. We call it (roughly translated) "Law against constraint of competition". Amazon might qualify as abusing their position under our laws. Unfortunately, it can be difficult to get a case started if the relevant authority isn't paying attention because of how the justice system is structured here and there's a question of how badly companies are actually being impacted in Germany by Amazon's behavior. Our wholesale/retail market seems to be a bit different and far more diverse than in the US.
  - clairity 6y ago
    yes, we have similar kinds of rules, but i imagine the ones in germany have a little more tooth. we in the US just can't seem to punish corporations adequately for any antisocial behavior.
- ChrisLomont 6y ago
  >it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. It is according to US law. Without a larger percentage, no court will consider anti-trust charges, due to Circuit and Supreme Court cases on what percentage of market control is required. Here's relevant portions from DoJ: "In determining whether a competitor possesses monopoly power in a relevant market, courts typically begin by looking at the firm's market share.(18) " So the typical case starts with percent control.... "Although the courts "have not yet identified a precise level at which monopoly power will be inferred,"(19) they have demanded a dominant market share" So the courts require a threshold..... "the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%."" There's ample more court citations on the DoJ page. Amazon doesn't reach these levels in probably any relevant category they are in. Certainly not for retail sales (Amazon is a tiny portion there), or online sales (less than half), or web services (Amazon ~ 40B out of 350B market). For any company, if you shrink the categories far enough, you can always find a monopoly - Apply has a (near) monopoly on Apple watches, for example. But this is not a monopoly. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...

karaterobot 6y ago

> Amazon is abusing its position to drive others out of business. I don't think even the ProPublica article is accusing them of this. What evidence is there that Amazon has purposefully driven sellers out of business, as opposed to just unfairly privileging its own brands? Why would they do this, when they created the marketplace and make a lot of money from it?

ngokevin 6y ago
"abusing" is not the right word, but they definitely can make it impossible to compete in many areas. Let's say you made a laptop tray and sold on Amazon, it did well! Then Amazon sees it, makes their own laptop tray, subsidized by economies-of-scale and their shipping network. They feature it higher than yours, bury yours down further, and sell it at much cheaper. It's not like you can compete on Amazon. And let's face it, you're not going to compete making your own store or selling it on brick-and-mortar. Eventually you starve out, you get out of the market, and then they cheapen the product even more to the point of lower product quality. Then at that point, the consumer loses. Seen so many products that used to be high quality, then the product quality got worse over time with cheaper materials, while keeping the same 5-star old reviews
- nojito 6y ago
  This is what happens in regular B&M stores as well. They will always push their private brand products to their customers.
Dahoon 6y ago
When a product suddenly sells a lot (a fidget spinner for example) Amazon starts selling it too. If you cannot buy a better ad placement than Amazon's competing product you will sell less. The sellers that wasn't selling a lot of products already will be dead. If that isn't driving out the competition I don't know what it is. >unfairly privileging its own brands will lead to > drive others out of business