9 ms·

A simple law that I think would solve a lot of the perverse incentives that exist in platform economies: Make it illegal to compete on your own platform. Amaz

by cowpig 6y ago

A simple law that I think would solve a lot of the perverse incentives that exist in platform economies: Make it illegal to compete on your own platform. Amazon would no longer be allowed to sell products on Amazon. Google would no longer be allowed to promote its own services on Google. etc.. It's pretty obvious to me that platforms are natural monopolies: the best platform experience is where there's just one and it has all the inventory. I wonder what the side-effects of a law like this would be? Would it create new problems I'm not thinking of?

sreekotay 6y ago
This is a nice-ish idea. But... does that mean that Apple and MS would not ve allowed to make any apps if they make the OS?
- AnthonyMouse 6y ago
  It would, but would that be the end of the world? So they'd spin off Office into a separate company. What would that hurt?
benologist 6y ago
This is possibly going to happen due to the anti-trust investigations into Apple, Amazon, Google and Facebook: > One possibility is what he described as a Glass-Steagall law for technology platforms. That Depression-era law separated commercial and investment banking until it was repealed during the Clinton administration. For tech companies, it would mean prohibiting them from running a platform and competing on it at the same time. > That’s a common complaint about Amazon in particular because it both runs a marketplace and competes with third-party sellers with its own line of products. https://www.bloomberg.com/news/articles/2020-08-26/house-antitrust-panel-to-propose-fixes-for-big-tech-dominance https://www.bloomberg.com/news/articles/2020-08-26/house-ant... https://www.macrumors.com/2020/08/26/antitrust-investigation-apple-disturbing-behavior/ https://www.macrumors.com/2020/08/26/antitrust-investigation...
ericmay 6y ago
Do you extend this to store brands? Should Kroger be able to offer Kroger Private Selection alongside other brands? -edit- Here's another one. Should Amazon be forced to let Kroger sell Kroger Private Selection in their Whole Foods stores (and vice-versa)? Why or why not?
- bilbo0s 6y ago
  Maybe stores shouldn't be allowed to do this either? I suppose if Amazon can't, then it would make sense that competitors like Target, Walmart and Kroger shouldn't be able to either.
  - ericmay 6y ago
    Sure. My goal here was to just call it out and ask the question for others to consider. I don't see a meaningful distinction between physical stores or online stores in this context.
- darksaints 6y ago
  That's a really good question. There aren't many ways to distinguish the two cases except maybe this: on Amazon's platform, Amazon takes zero risk in hosting other sellers. They don't buy inventory that they don't know will sell, and they don't pay to market products to customers, and they don't even need to hold the inventory at their own expense. They can just sit back, collect data, and enter high-reward markets while letting sellers do all the hard work of finding them. It's not quite so easy for a supermarket to do the same.
- TurkTurkleton 6y ago
  The difference is that when you go to Kroger you search the shelves with your own eyeballs. When you go to Amazon, their opaque algorithm does the searching for you, and it could be (and probably is) prioritizing Amazon brands or "Amazon's choice" over other brands. I suppose an argument could be made about the layout of store shelves serving a similar purpose to the prioritization inherent in search engine algorithms, but I don't think it's a perfect parallel since the shopper arguably has more agency in determining what products they see and when in a meatspace store versus online.
deleted 6y ago
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davinic 6y ago
I think something along these lines would be great. The problem with Amazon competing in their own marketplace is that there is far too much information asymmetry -- they know about how their marketplace sellers are setting prices and they know the cumulative sales of all items and trends, whereas the marketplace sellers only see their end of things. Amazon then has the ability to just cut those sellers out as it wishes (either through undercutting, making their own Amazon-branded versions, or even just kicking the seller off the platform with no recourse. This provides Amazon with the ability to do what financial marketplaces are forbidden: front-running, insider trading, etc with their own "stock" of merchandise.

by cowpig 6y ago

sreekotay 6y ago

This is a nice-ish idea. But... does that mean that Apple and MS would not ve allowed to make any apps if they make the OS?

AnthonyMouse 6y ago
It would, but would that be the end of the world? So they'd spin off Office into a separate company. What would that hurt?

benologist 6y ago

This is possibly going to happen due to the anti-trust investigations into Apple, Amazon, Google and Facebook: > One possibility is what he described as a Glass-Steagall law for technology platforms. That Depression-era law separated commercial and investment banking until it was repealed during the Clinton administration. For tech companies, it would mean prohibiting them from running a platform and competing on it at the same time. > That’s a common complaint about Amazon in particular because it both runs a marketplace and competes with third-party sellers with its own line of products. https://www.bloomberg.com/news/articles/2020-08-26/house-antitrust-panel-to-propose-fixes-for-big-tech-dominance https://www.bloomberg.com/news/articles/2020-08-26/house-ant... https://www.macrumors.com/2020/08/26/antitrust-investigation-apple-disturbing-behavior/ https://www.macrumors.com/2020/08/26/antitrust-investigation...

ericmay 6y ago

Do you extend this to store brands? Should Kroger be able to offer Kroger Private Selection alongside other brands? -edit- Here's another one. Should Amazon be forced to let Kroger sell Kroger Private Selection in their Whole Foods stores (and vice-versa)? Why or why not?

bilbo0s 6y ago
Maybe stores shouldn't be allowed to do this either? I suppose if Amazon can't, then it would make sense that competitors like Target, Walmart and Kroger shouldn't be able to either.
- ericmay 6y ago
  Sure. My goal here was to just call it out and ask the question for others to consider. I don't see a meaningful distinction between physical stores or online stores in this context.
darksaints 6y ago
That's a really good question. There aren't many ways to distinguish the two cases except maybe this: on Amazon's platform, Amazon takes zero risk in hosting other sellers. They don't buy inventory that they don't know will sell, and they don't pay to market products to customers, and they don't even need to hold the inventory at their own expense. They can just sit back, collect data, and enter high-reward markets while letting sellers do all the hard work of finding them. It's not quite so easy for a supermarket to do the same.
TurkTurkleton 6y ago
The difference is that when you go to Kroger you search the shelves with your own eyeballs. When you go to Amazon, their opaque algorithm does the searching for you, and it could be (and probably is) prioritizing Amazon brands or "Amazon's choice" over other brands. I suppose an argument could be made about the layout of store shelves serving a similar purpose to the prioritization inherent in search engine algorithms, but I don't think it's a perfect parallel since the shopper arguably has more agency in determining what products they see and when in a meatspace store versus online.

deleted 6y ago

[deleted]

davinic 6y ago

I think something along these lines would be great. The problem with Amazon competing in their own marketplace is that there is far too much information asymmetry -- they know about how their marketplace sellers are setting prices and they know the cumulative sales of all items and trends, whereas the marketplace sellers only see their end of things. Amazon then has the ability to just cut those sellers out as it wishes (either through undercutting, making their own Amazon-branded versions, or even just kicking the seller off the platform with no recourse. This provides Amazon with the ability to do what financial marketplaces are forbidden: front-running, insider trading, etc with their own "stock" of merchandise.