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By this logic though shouldn’t “store brands” at the grocery store or “CVS brand” medicine at the drug store also be “illegal.” Both those surely look at which

By this logic though shouldn’t “store brands” at the grocery store or “CVS brand” medicine at the drug store also be “illegal.” Both those surely look at which brands are selling before deciding to make a generic to put on the same shelf at a lower price. That’s not a monopoly, that’s standard practice in the retail business. Thus the presence of competing products or the fact that generics appear against popular options is really not a good argument for nefarious activity. The issue from some of those crying foul is really that there isn’t any brand loyalty towards what are commodity items. Why should someone buy your more expensive HDMI cable when a perfectly good one sells for less? It’s a valid question those crying foul need to answer. The answer here of course is that many/most of those doing the selling are middle-men and not actual product manufacturers thus it’s very easy to undercut the person that doesn’t really need to be part of the supply chain.

randompwd 6y ago
You're completely ignoring the Amazon being the marketplace.
- code4tee 6y ago
  Is a traditional store also not a marketplace for product manufacturers and distributors to sell their wares? It operates the same way. Drop off a truckload of your stuff at mega-mart’s distribution hub and they take care of the rest via their marketplace for your canned beans or whatever you’re trying to sell. If your product is popular, mega-mart will probably make mega-mart beans and put them right next to yours on the shelf at a lower price. The fact that it happens on a website vs a physical store doesn’t change anything.
  - jdmichal 6y ago
    It depends. By marketplace, what people mean here is that Amazon is taking zero risk on the inventory. They are merely providing a place to list it. (Along with maybe some other paid services such as fulfillment and inventory management.) Retailers sometimes operate under this model. But retails also sometimes operate under the model where the inventory on their shelves was purchased by them from the manufacturer or distributor. They are taking the risk on the inventory, and not selling means they are losing money. The manufacturers and distributors were already paid. So, I reflect a question back to you: If it's all your owned inventory, what does it matter what name is on the box? No matter what, you the retailer are getting your sale and making the profit. This is not true of the marketplace model. There, whitelabels are directly competing for every sale, and no sales means no money to the manufacturers of those other products. All this is also heavily discounting the fact that Amazon also owns the search. Some people equate this to product placement on shelves, but it's really more like there's two stores. The first store is all Amazon stuff, and you have to walk through that store to get to the second store, where other sellers are.
    - code4tee 6y ago
      I again suggest looking at other retail models. Grocery stores, department stores and such operate a sizable part of their business by simply providing distribution and shelf space for goods. They don’t own all the inventory on their shelf. For things like beverages and certain other goods they literally just rent shelf space in the store (3rd parties come in and stock the shelf) and then put their own store brand stuff right next to it selling for less. It’s literally the same model. One really struggles to make the argument that it’s bad to do this online but not in person. That’s the issue with this line of reasoning.
      - TheOtherHobbes 6y ago
        Slotting fees are not the same model, and even if they were they're considered questionably ethical. One difference is the branding. Grocery store products rely far more on branding, and slotting fees are often used for market research. Stores cannot reproduce the branding, therefore their own-brand products don't have the same competitive appeal. Amazon actually hides prominent branding. A few big brands have their own mini-stores, but most of the time you can't tell if you're getting a product from Amazon, from the original manufacturer, or from a retailer. So when Amazon uses market analytics to decide which products to make and sell, it has a huge advantage - and it can and does wipe out existing sellers. Which is something grocery stores don't do.
      - zaarn 6y ago
        1) It's hard to hide things in a physical store. There are some tricks but if you want Brand A cereals and the store has them, you can find them in the cereal section. Amazon has in my experience, sometimes hidden product brands entirely or beyond page 4-5, favoring their own or prime products. 2) When a supermarket takes on Brand A cereal, the Brand A owner makes little risk, they get paid whether they sell or not. The supermarket is taking all the risk. If they bring their own store brand, they still run the entire risk, now for both stocks. If cereals stop selling well (because there is a milk shortage) then the supermarket is loosing a lot of money. Amazon faces no risk, they can have the vendor for Brand A continue to sell non-prime cereal from their own stock so amazon faces 0 costs if it flops. If the vendor does well they can be onboarded for inventory management and prime shipping, amazon takes more risks and more profit. Lastly, they can use methods like "We suspect the product is counterfeit, send bills for when you bought it" to gain direct access to the manufacturer of Brand A. Now they can sell Brand Amazon directly from the manufacturer, leaving the Brand owner of Brand A in the dust by selling the same product, that did well, cheaper and hiding them in the search results below their own. The supermarket equivalent would be that the supermarket subsidizes the Brand A seller from their value-add in-store things like customer payback cards after a while, then blackmails them into giving them the manufacturer by threatening to not sell their popular product, then selling the manufacturer's product under an in-store brand and the Brand A cereal is only available under-the-counter. Brand A seller is also entirely co-dependent on the supermarket as that supermarket is 90% of the market. I know you have wallmart in the US but in the EU we do have some variety in supermarket chains (ALDI Süd/Nord, LIDL, Edeka, Rewe, etc.).
  - alkonaut 6y ago
    > Is a traditional store also not a marketplace for product manufacturers and distributors to sell their wares? I think amazon is better compared to the whole street where the stores are, than to any store.
- mschild 6y ago
  And CVS is technically also the marketplace just in physical form. I get where they're coming from, but don't really agree with the standpoint. CVS (or really any large retail chain that sells 3rd party products and produces their own) is in a similar situation. One could, and rightfully so I think, make the argument that CVS etc should not be allowed to produce their own products, because they have significantly more insight into what is sold. Amazon noticed that several products were selling quite well and decided to get a piece of the action. Beyond showing their own products as higher ranked you'll also often see them listed under the "cheaper alternative" section on product pages. In comparison, CVS might see that neck pillows are really popular and decides to sell their own neck pillows and put competitor ones on lower shelves. It's quite similar behavior. Part of the reason why the EU decides to go after Amazon and not other though, I think, is because of their market share. Amazon is huge in the EU. They hold about 29% of the market. Depending on the country, even more. Amazon also does this on a scale that other "marketplace" type companies have not. If you ever go to the Amazon website and look under Amazon basic, you'll be surprise by the amount of stuff they sell.
  - deleted 6y ago
    [deleted]
  - gamblor956 6y ago
    The difference is that CVS paid for all of the neck pillows that appear on their shelves, even the ones under their own white label. The suppliers of the white label neck pillows provably made the other neck pillows. From their POV, they're largely indifferent because they've already been paid.
Renaud 6y ago
>By this logic though shouldn’t “store brands” at the grocery store or “CVS brand” medicine at the drug store also be “illegal.” No they don't. Stores buy their stock. They can choose to stock other brands or to make their own products, but they invariably have to purchase what they sell. The Amazon market place makes you think it's the same but it's not. Sellers are using the platform to sell their own products and they pay Amazon for that service. Amazon is accused of using sales data from the sellers, like their sales volumes, margins and customers profiles, and then undercut them by producing their own version. Amazon basically benefit from the traffic, interest and sales data of sellers to then displace them and promote their own product. It's like if you had a small business but your landlord had access to all your data and saw that they should also sell their own copies of your most profitable items by opening a bigger shop right next to you and selling for cheaper because being the landlord, they don't need to pay rent. Maybe illegal, maybe not, but in any case it's cause for at least some amount of concern and deserves some overseeing. It's way too tempting to abuse that absolute power in some way, whether as a matter or policy or just because some overzealous Amazon manager found that pushing the envelope was in their own interest. You can't just ignore that and brush it off. We've created a potential bully and we should at least keep watch.
- dredmorbius 6y ago
  The B&M retail story is ... considerably more complicated. For grocery stores, "slotting fees": “Slotting fees” (or “slotting allowances”) are fees that manufacturers pay retailers to appear on their scarce shelves. It can cost millions of dollars to launch a product in the nation’s groceries, and through that cost, these fees shape our supermarkets and diets long before we’re able to make a purchase decision ourselves. It’s easy to think that these fees show supermarkets are “rigged” — against both consumers and smaller manufacturers that can’t afford the fees. But as the above video shows, the debate is an intense one, with strong partisans, and decent arguments, on both sides. https://www.vox.com/2016/11/22/13707022/grocery-store-slotting-fees-slotting-allowances https://www.vox.com/2016/11/22/13707022/grocery-store-slotti... Not excusing or arguing for Amazon (I'm not a fan), just noting real-world complexity.
  - 6y ago
theptip 6y ago
If the store was a dominant market player like Walmart, then yes, there would be antitrust concerns there too, and it would be appropriate to investigate if they were abusing their market power. Remember, this is all about antitrust (not strictly monopoly), which is abuse of a dominant market position to stifle competition. It’s possible to have a dominant position and not abuse it, and it’s possible to not have a dominant market position and be cutthroat; antitrust is concerned with neither of those cases. And yes, it’s good for consumers right now to get cheaper stuff; the concern is that stuff might not be so cheap in the future if Amazon is allowed to gain a 99% market share in the segments which it enters.

randompwd 6y ago

You're completely ignoring the Amazon being the marketplace.

code4tee 6y ago
Is a traditional store also not a marketplace for product manufacturers and distributors to sell their wares? It operates the same way. Drop off a truckload of your stuff at mega-mart’s distribution hub and they take care of the rest via their marketplace for your canned beans or whatever you’re trying to sell. If your product is popular, mega-mart will probably make mega-mart beans and put them right next to yours on the shelf at a lower price. The fact that it happens on a website vs a physical store doesn’t change anything.
- jdmichal 6y ago
  It depends. By marketplace, what people mean here is that Amazon is taking zero risk on the inventory. They are merely providing a place to list it. (Along with maybe some other paid services such as fulfillment and inventory management.) Retailers sometimes operate under this model. But retails also sometimes operate under the model where the inventory on their shelves was purchased by them from the manufacturer or distributor. They are taking the risk on the inventory, and not selling means they are losing money. The manufacturers and distributors were already paid. So, I reflect a question back to you: If it's all your owned inventory, what does it matter what name is on the box? No matter what, you the retailer are getting your sale and making the profit. This is not true of the marketplace model. There, whitelabels are directly competing for every sale, and no sales means no money to the manufacturers of those other products. All this is also heavily discounting the fact that Amazon also owns the search. Some people equate this to product placement on shelves, but it's really more like there's two stores. The first store is all Amazon stuff, and you have to walk through that store to get to the second store, where other sellers are.
  - code4tee 6y ago
    I again suggest looking at other retail models. Grocery stores, department stores and such operate a sizable part of their business by simply providing distribution and shelf space for goods. They don’t own all the inventory on their shelf. For things like beverages and certain other goods they literally just rent shelf space in the store (3rd parties come in and stock the shelf) and then put their own store brand stuff right next to it selling for less. It’s literally the same model. One really struggles to make the argument that it’s bad to do this online but not in person. That’s the issue with this line of reasoning.
    - TheOtherHobbes 6y ago
      Slotting fees are not the same model, and even if they were they're considered questionably ethical. One difference is the branding. Grocery store products rely far more on branding, and slotting fees are often used for market research. Stores cannot reproduce the branding, therefore their own-brand products don't have the same competitive appeal. Amazon actually hides prominent branding. A few big brands have their own mini-stores, but most of the time you can't tell if you're getting a product from Amazon, from the original manufacturer, or from a retailer. So when Amazon uses market analytics to decide which products to make and sell, it has a huge advantage - and it can and does wipe out existing sellers. Which is something grocery stores don't do.
    - zaarn 6y ago
      1) It's hard to hide things in a physical store. There are some tricks but if you want Brand A cereals and the store has them, you can find them in the cereal section. Amazon has in my experience, sometimes hidden product brands entirely or beyond page 4-5, favoring their own or prime products. 2) When a supermarket takes on Brand A cereal, the Brand A owner makes little risk, they get paid whether they sell or not. The supermarket is taking all the risk. If they bring their own store brand, they still run the entire risk, now for both stocks. If cereals stop selling well (because there is a milk shortage) then the supermarket is loosing a lot of money. Amazon faces no risk, they can have the vendor for Brand A continue to sell non-prime cereal from their own stock so amazon faces 0 costs if it flops. If the vendor does well they can be onboarded for inventory management and prime shipping, amazon takes more risks and more profit. Lastly, they can use methods like "We suspect the product is counterfeit, send bills for when you bought it" to gain direct access to the manufacturer of Brand A. Now they can sell Brand Amazon directly from the manufacturer, leaving the Brand owner of Brand A in the dust by selling the same product, that did well, cheaper and hiding them in the search results below their own. The supermarket equivalent would be that the supermarket subsidizes the Brand A seller from their value-add in-store things like customer payback cards after a while, then blackmails them into giving them the manufacturer by threatening to not sell their popular product, then selling the manufacturer's product under an in-store brand and the Brand A cereal is only available under-the-counter. Brand A seller is also entirely co-dependent on the supermarket as that supermarket is 90% of the market. I know you have wallmart in the US but in the EU we do have some variety in supermarket chains (ALDI Süd/Nord, LIDL, Edeka, Rewe, etc.).
- alkonaut 6y ago
  > Is a traditional store also not a marketplace for product manufacturers and distributors to sell their wares? I think amazon is better compared to the whole street where the stores are, than to any store.
mschild 6y ago
And CVS is technically also the marketplace just in physical form. I get where they're coming from, but don't really agree with the standpoint. CVS (or really any large retail chain that sells 3rd party products and produces their own) is in a similar situation. One could, and rightfully so I think, make the argument that CVS etc should not be allowed to produce their own products, because they have significantly more insight into what is sold. Amazon noticed that several products were selling quite well and decided to get a piece of the action. Beyond showing their own products as higher ranked you'll also often see them listed under the "cheaper alternative" section on product pages. In comparison, CVS might see that neck pillows are really popular and decides to sell their own neck pillows and put competitor ones on lower shelves. It's quite similar behavior. Part of the reason why the EU decides to go after Amazon and not other though, I think, is because of their market share. Amazon is huge in the EU. They hold about 29% of the market. Depending on the country, even more. Amazon also does this on a scale that other "marketplace" type companies have not. If you ever go to the Amazon website and look under Amazon basic, you'll be surprise by the amount of stuff they sell.
- deleted 6y ago
  [deleted]
- gamblor956 6y ago
  The difference is that CVS paid for all of the neck pillows that appear on their shelves, even the ones under their own white label. The suppliers of the white label neck pillows provably made the other neck pillows. From their POV, they're largely indifferent because they've already been paid.

Renaud 6y ago

>By this logic though shouldn’t “store brands” at the grocery store or “CVS brand” medicine at the drug store also be “illegal.” No they don't. Stores buy their stock. They can choose to stock other brands or to make their own products, but they invariably have to purchase what they sell. The Amazon market place makes you think it's the same but it's not. Sellers are using the platform to sell their own products and they pay Amazon for that service. Amazon is accused of using sales data from the sellers, like their sales volumes, margins and customers profiles, and then undercut them by producing their own version. Amazon basically benefit from the traffic, interest and sales data of sellers to then displace them and promote their own product. It's like if you had a small business but your landlord had access to all your data and saw that they should also sell their own copies of your most profitable items by opening a bigger shop right next to you and selling for cheaper because being the landlord, they don't need to pay rent. Maybe illegal, maybe not, but in any case it's cause for at least some amount of concern and deserves some overseeing. It's way too tempting to abuse that absolute power in some way, whether as a matter or policy or just because some overzealous Amazon manager found that pushing the envelope was in their own interest. You can't just ignore that and brush it off. We've created a potential bully and we should at least keep watch.

dredmorbius 6y ago
The B&M retail story is ... considerably more complicated. For grocery stores, "slotting fees": “Slotting fees” (or “slotting allowances”) are fees that manufacturers pay retailers to appear on their scarce shelves. It can cost millions of dollars to launch a product in the nation’s groceries, and through that cost, these fees shape our supermarkets and diets long before we’re able to make a purchase decision ourselves. It’s easy to think that these fees show supermarkets are “rigged” — against both consumers and smaller manufacturers that can’t afford the fees. But as the above video shows, the debate is an intense one, with strong partisans, and decent arguments, on both sides. https://www.vox.com/2016/11/22/13707022/grocery-store-slotting-fees-slotting-allowances https://www.vox.com/2016/11/22/13707022/grocery-store-slotti... Not excusing or arguing for Amazon (I'm not a fan), just noting real-world complexity.
- 6y ago

theptip 6y ago

If the store was a dominant market player like Walmart, then yes, there would be antitrust concerns there too, and it would be appropriate to investigate if they were abusing their market power. Remember, this is all about antitrust (not strictly monopoly), which is abuse of a dominant market position to stifle competition. It’s possible to have a dominant position and not abuse it, and it’s possible to not have a dominant market position and be cutthroat; antitrust is concerned with neither of those cases. And yes, it’s good for consumers right now to get cheaper stuff; the concern is that stuff might not be so cheap in the future if Amazon is allowed to gain a 99% market share in the segments which it enters.