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I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly bee

I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly been crushed.

stingraycharles 5y ago
“Fat margins” is relative. For Apple, it may mean 50%; for a webshop, it may mean 10%. My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.
- toyg 5y ago
  In the worst (for Amazon) scenario, we're looking at 20% of localized revenues over a year. Amazon reported an average 5-7% profit margin in the last few years. Even in the worst case, they will be back in pure profit after just a few years... For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.
  - lillecarl 5y ago
    Assuming they're able to play by the rules, they might just not be able to. We've seen Google fined over and over for things. I'm not sure Amazon would be different (I guess they have to to remain profitable or pull out).
    - account42 5y ago
      That Google keeps getting fined only says that the earlier fines were not enough. They definitely are capable of playing by the rules.
kortilla 5y ago
No, unless things are different in Europe. In the US they aren’t even close to a monopoly so they have to compete with Walmart, Best Buy, Target, etc.
jstummbillig 5y ago
Suffice to say that, if the 5-10B rev estimate is indeed true, the margins can not be fat enough to shrug off a 1B fine.
- toyg 5y ago
  On the specific market. But Amazon EU as a whole makes 44bn per year, which at 5% means 2.2bn per year. The hit is not sustainable if replicated across two or three EU markets, but if limited to Italy it's just a cost of business.
  - jstummbillig 5y ago
    Business wise, it does seem a little odd to consider Amazon EU as one package, when operating income and costs are as localized and non-homogeneous as they are.

I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly been crushed.

stingraycharles 5y ago

“Fat margins” is relative. For Apple, it may mean 50%; for a webshop, it may mean 10%. My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.

toyg 5y ago
In the worst (for Amazon) scenario, we're looking at 20% of localized revenues over a year. Amazon reported an average 5-7% profit margin in the last few years. Even in the worst case, they will be back in pure profit after just a few years... For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.
- lillecarl 5y ago
  Assuming they're able to play by the rules, they might just not be able to. We've seen Google fined over and over for things. I'm not sure Amazon would be different (I guess they have to to remain profitable or pull out).
  - account42 5y ago
    That Google keeps getting fined only says that the earlier fines were not enough. They definitely are capable of playing by the rules.

kortilla 5y ago

No, unless things are different in Europe. In the US they aren’t even close to a monopoly so they have to compete with Walmart, Best Buy, Target, etc.

jstummbillig 5y ago

Suffice to say that, if the 5-10B rev estimate is indeed true, the margins can not be fat enough to shrug off a 1B fine.

toyg 5y ago
On the specific market. But Amazon EU as a whole makes 44bn per year, which at 5% means 2.2bn per year. The hit is not sustainable if replicated across two or three EU markets, but if limited to Italy it's just a cost of business.
- jstummbillig 5y ago
  Business wise, it does seem a little odd to consider Amazon EU as one package, when operating income and costs are as localized and non-homogeneous as they are.