4 ms·

I hope the article isn't accurate, because if it's only "tech giants" to be prohibited from store brands, that would mean, Congress has decided, it's only brick

I hope the article isn't accurate, because if it's only "tech giants" to be prohibited from store brands, that would mean, Congress has decided, it's only brick-and-mortar giants who can use sales data to grind product sellers and compete using store brands. I mean, it's not as if drug chains (Walgreens, CVS, etc.) and grocery chains (Kroger, Albertsons, etc.) and big box chains (Costco, Walmart, etc.) and pretty much every sort of large retail operation doesn't do just the same thing. And speaking of using data to grind suppliers, ever since the early days of the NCR Teradata project put them miles ahead of any competitor and made them the largest retailer in the world for decades (sales still a bit ahead of Amazon last time I looked), they've been grinding prices, forcing offshoring of production to reduce labor costs, forcing suppliers to economize (that is, cut corners) on manufacturing to keep prices low. But, hey, it's tech giants selling store brands, that's the big problem!

picardo 5y ago
The counter to that argument is that the brick-and-mortar chains don't claim to be platforms or marketplaces for other products. The business model of a Walmart is pretty simple. Buy wholesale, sell retail.
- lotsofpulp 5y ago
  > The business model of a Walmart is pretty simple. Buy wholesale, sell retail. Is it? https://www.pymnts.com/news/retail/2016/retail-charging-suppliers-more-for-unsold-inventory/ https://www.pymnts.com/news/retail/2016/retail-charging-supp... I would not be surprised to see the big retailers passing off a lot of inventory risk to the smaller brands it can push around. Walmart also definitely uses sales data from its stores to sell their own brands (Mainstays and others) alongside other brands.
- nradov 5y ago
  It's a little more complex than that. Retail chains often charge consumer packaged goods companies for shelf space. Essentially the retailers are selling access to their "platform". https://traxretail.com/blog/quick-guide-shelf-space-costs/ https://traxretail.com/blog/quick-guide-shelf-space-costs/
aaomidi 5y ago
To be fair the level of competition in physical stores is way beyond what we have online.
- xoa 5y ago
  >To be fair the level of competition in physical stores is way beyond what we have online. That is an absolutely ludicrously absurd statement. Physical stores are physical, by definition they have vastly more scarcity. There is only so much physical land in high density areas, and physical stores that are even tens of minutes away, let alone hours, are in an enormously different competitive situation to ones nearby. Whereas online I have vast numbers of stores that are all perfectly equal "distance" away. They are freed from many if not all of the tradeoffs in storage space vs convenient (and very expensive) locations. Online stores are cheaper both to start and operate. Someone can reach a global audience from literally their garage. In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving. There is no competition at all... except from online.
  - aaomidi 5y ago
    > In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving. That's also a part of the country that doesn't have a ton of people. Again, I wish this applied to physical stores. But the fact that it doesn't, doesn't mean we should say this is a bad bill.
- threeseed 5y ago
  This is completely wrong. Supermarkets, departments, hardware, chemists etc. in every country is dominated by 1-3 chains who have the capital and time to extinguish any competition. And it's been this way for a century or more. In the online world every sector has anywhere from hundreds to tens of thousands of competitors not just locally but from around the world. To setup an online store you just need Shopify, supplier and a few thousand for ads. For a physical store you need tens of thousands for fit out and leasing.
echelon 5y ago
Name more than two phone operating systems. There are hundreds of big box retailers, ranging from drug stores, big box retailers, specialty stores, and more. Before Amazon, most of them were incredibly healthy. And lots of them still are. Name more than four mobile app marketplaces. Name more than two search engines. ... Tech is winner take all, then they pivot that power to take over more industries. Google now sells fitness trackers. Apple is a movie studio. Amazon is already starting to buy out physical retailers. The other tech giants won't be far behind. This is why we need legislation. To keep capitalism evolutionarily healthy rather than turning the world into grey google goo.
- aaomidi 5y ago
  And tech is also operating where physical constraints don't apply. They can grow as large as they want.
- threeseed 5y ago
  How about you tell us which country you live in and how many supermarket, chemist, hardware etc chains exist there. In Australia for example, we have basically 2 supermarkets, 4 banks, 3 chemists, 2 hardware stores, 2 department stores etc. This idea that winner take all is unique to tech is laughably ridiculous. Especially for those of us who have had to compete and /or work with one of those major chains.
  - fakedang 5y ago
    I don't know, in most countries that I've visited or lived in, there was way more competition than duopolies and monopolies. I'm currently in the UAE where there are more than 30+ retail chains competing alongside online retail shops (including Amazon). Thats ignoring independently run tiny grocery stores which number more than 5000. All of them compete to provide the best service, and incidentally its the groceries that are winning. There are more than 10+ national banks and more than 30+ banks providing retail services. And even though there's only one major oil producer (ADNOC), there are multiple gas station chains. All this in a tiny country of 9 million people - I purposely did not take into account a country such as Germany or India. There is one industry which is a duopoly, telecom, which is a state run duopoly, and the quality shows. Customer service is the worst - so bad that even a royal prince from a ruling family cursed the telecoms, so bad that the heads of the bigger firm were berated by the rulers in a meeting. If you're gloating about how monopolies are the norm around the world, well quite frankly, it isn't. On the other hand, it might be far more symptomatic of the direction the countries you're referring to are heading in. Incidentally I have observed the pattern you mentioned in the UK too.
ManBlanket 5y ago
The way this article is written makes it seem the focus of the bill is preventing the promotion of Amazon Basics. Personally it strikes me as a bit of a straw-man. The article seems acutely focused on this small aspect of the larger policy. Like the author is hoping the reader will throw the baby out with the bath water, in an evasive way. (Jeff Bezos owns the Washington Post) Personally I am finding it increasingly difficult to read the Post without noticing bias. I would encourage comparing this article to Klobuchar's own description of the bill before coming to your own conclusion. https://www.klobuchar.senate.gov/public/index.cfm/2021/2/senator-klobuchar-introduces-sweeping-bill-to-promote-competition-and-improve-antitrust-enforcement https://www.klobuchar.senate.gov/public/index.cfm/2021/2/sen... It would seem the portion of the bill in question regards, "exclusionary conduct". Like if Amazon refused to list retailers that compete with its own Amazon Basics brand, akin to a grocery store refusing to sell Rice Crispies because it competes with their own Crisp Ricies. Not necessarily precluding them from offering the products. Even then that's only a small bullet point in a much larger bill. Most of the intent seems to be focused on increasing the capacity and resources for pursuing cases pertaining to anti-competitive mergers and acquisitions by these companies. The potential for exclusionary conduct becomes particularly concerning given the current trend of a few corporations gobbling up everything in their path that even remotely competes with their products. Thing is it doesn't matter if a product is a good idea which solves a niche problem if it's involved with these massive companies. If that product doesn't make a billion dollars then it finds itself in the Google Graveyard. Personally I don't want to see new and innovative things have a bad deal forced upon them, only to merge into a morass of vanilla ice cream because they didn't make ALL the money.
- cjsplat 5y ago
  The Klobuchar PR comment you link dated Feb 4, 2021 references S.225, introduced in February. This article seems to be about a new bill that Klobuchar and Grassley will introduce "next week". In yesterday's WaPo article, Klobuchar seems to imply that the new bill will motivated similarly to HR3816, which is very different than S.225. Until the new bill is published it is difficult to have a solid analysis. It is possible that the lobbyists quoted by WaPO actually have seen draft versions given how Washington actually works. So ... expect this item to appear on HN again next week when outsiders can have a more informed opinion.
HWR_14 5y ago
How many of those brick-and-mortar stores control more than 50% of brick-and-mortar sales? How many are accessed via search instead of browsing?

picardo 5y ago

The counter to that argument is that the brick-and-mortar chains don't claim to be platforms or marketplaces for other products. The business model of a Walmart is pretty simple. Buy wholesale, sell retail.

lotsofpulp 5y ago
> The business model of a Walmart is pretty simple. Buy wholesale, sell retail. Is it? https://www.pymnts.com/news/retail/2016/retail-charging-suppliers-more-for-unsold-inventory/ https://www.pymnts.com/news/retail/2016/retail-charging-supp... I would not be surprised to see the big retailers passing off a lot of inventory risk to the smaller brands it can push around. Walmart also definitely uses sales data from its stores to sell their own brands (Mainstays and others) alongside other brands.
nradov 5y ago
It's a little more complex than that. Retail chains often charge consumer packaged goods companies for shelf space. Essentially the retailers are selling access to their "platform". https://traxretail.com/blog/quick-guide-shelf-space-costs/ https://traxretail.com/blog/quick-guide-shelf-space-costs/

aaomidi 5y ago

To be fair the level of competition in physical stores is way beyond what we have online.

xoa 5y ago
>To be fair the level of competition in physical stores is way beyond what we have online. That is an absolutely ludicrously absurd statement. Physical stores are physical, by definition they have vastly more scarcity. There is only so much physical land in high density areas, and physical stores that are even tens of minutes away, let alone hours, are in an enormously different competitive situation to ones nearby. Whereas online I have vast numbers of stores that are all perfectly equal "distance" away. They are freed from many if not all of the tradeoffs in storage space vs convenient (and very expensive) locations. Online stores are cheaper both to start and operate. Someone can reach a global audience from literally their garage. In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving. There is no competition at all... except from online.
- aaomidi 5y ago
  > In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving. That's also a part of the country that doesn't have a ton of people. Again, I wish this applied to physical stores. But the fact that it doesn't, doesn't mean we should say this is a bad bill.
threeseed 5y ago
This is completely wrong. Supermarkets, departments, hardware, chemists etc. in every country is dominated by 1-3 chains who have the capital and time to extinguish any competition. And it's been this way for a century or more. In the online world every sector has anywhere from hundreds to tens of thousands of competitors not just locally but from around the world. To setup an online store you just need Shopify, supplier and a few thousand for ads. For a physical store you need tens of thousands for fit out and leasing.

echelon 5y ago

Name more than two phone operating systems. There are hundreds of big box retailers, ranging from drug stores, big box retailers, specialty stores, and more. Before Amazon, most of them were incredibly healthy. And lots of them still are. Name more than four mobile app marketplaces. Name more than two search engines. ... Tech is winner take all, then they pivot that power to take over more industries. Google now sells fitness trackers. Apple is a movie studio. Amazon is already starting to buy out physical retailers. The other tech giants won't be far behind. This is why we need legislation. To keep capitalism evolutionarily healthy rather than turning the world into grey google goo.

aaomidi 5y ago
And tech is also operating where physical constraints don't apply. They can grow as large as they want.
threeseed 5y ago
How about you tell us which country you live in and how many supermarket, chemist, hardware etc chains exist there. In Australia for example, we have basically 2 supermarkets, 4 banks, 3 chemists, 2 hardware stores, 2 department stores etc. This idea that winner take all is unique to tech is laughably ridiculous. Especially for those of us who have had to compete and /or work with one of those major chains.
- fakedang 5y ago
  I don't know, in most countries that I've visited or lived in, there was way more competition than duopolies and monopolies. I'm currently in the UAE where there are more than 30+ retail chains competing alongside online retail shops (including Amazon). Thats ignoring independently run tiny grocery stores which number more than 5000. All of them compete to provide the best service, and incidentally its the groceries that are winning. There are more than 10+ national banks and more than 30+ banks providing retail services. And even though there's only one major oil producer (ADNOC), there are multiple gas station chains. All this in a tiny country of 9 million people - I purposely did not take into account a country such as Germany or India. There is one industry which is a duopoly, telecom, which is a state run duopoly, and the quality shows. Customer service is the worst - so bad that even a royal prince from a ruling family cursed the telecoms, so bad that the heads of the bigger firm were berated by the rulers in a meeting. If you're gloating about how monopolies are the norm around the world, well quite frankly, it isn't. On the other hand, it might be far more symptomatic of the direction the countries you're referring to are heading in. Incidentally I have observed the pattern you mentioned in the UK too.

ManBlanket 5y ago

The way this article is written makes it seem the focus of the bill is preventing the promotion of Amazon Basics. Personally it strikes me as a bit of a straw-man. The article seems acutely focused on this small aspect of the larger policy. Like the author is hoping the reader will throw the baby out with the bath water, in an evasive way. (Jeff Bezos owns the Washington Post) Personally I am finding it increasingly difficult to read the Post without noticing bias. I would encourage comparing this article to Klobuchar's own description of the bill before coming to your own conclusion. https://www.klobuchar.senate.gov/public/index.cfm/2021/2/senator-klobuchar-introduces-sweeping-bill-to-promote-competition-and-improve-antitrust-enforcement https://www.klobuchar.senate.gov/public/index.cfm/2021/2/sen... It would seem the portion of the bill in question regards, "exclusionary conduct". Like if Amazon refused to list retailers that compete with its own Amazon Basics brand, akin to a grocery store refusing to sell Rice Crispies because it competes with their own Crisp Ricies. Not necessarily precluding them from offering the products. Even then that's only a small bullet point in a much larger bill. Most of the intent seems to be focused on increasing the capacity and resources for pursuing cases pertaining to anti-competitive mergers and acquisitions by these companies. The potential for exclusionary conduct becomes particularly concerning given the current trend of a few corporations gobbling up everything in their path that even remotely competes with their products. Thing is it doesn't matter if a product is a good idea which solves a niche problem if it's involved with these massive companies. If that product doesn't make a billion dollars then it finds itself in the Google Graveyard. Personally I don't want to see new and innovative things have a bad deal forced upon them, only to merge into a morass of vanilla ice cream because they didn't make ALL the money.

cjsplat 5y ago
The Klobuchar PR comment you link dated Feb 4, 2021 references S.225, introduced in February. This article seems to be about a new bill that Klobuchar and Grassley will introduce "next week". In yesterday's WaPo article, Klobuchar seems to imply that the new bill will motivated similarly to HR3816, which is very different than S.225. Until the new bill is published it is difficult to have a solid analysis. It is possible that the lobbyists quoted by WaPO actually have seen draft versions given how Washington actually works. So ... expect this item to appear on HN again next week when outsiders can have a more informed opinion.

HWR_14 5y ago

How many of those brick-and-mortar stores control more than 50% of brick-and-mortar sales? How many are accessed via search instead of browsing?