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Washington state shuts down Amazon price-fixing program nationwide

686 points by ilamont 5y ago

blakesterz 5y ago
"There are about 2.3 million third-party sellers on Amazon worldwide, according to information from a 2018 Amazon letter to its shareholders" That number is pretty amazing. I never would've guessed over 2 million, and that number must be higher by now.
- ziml77 5y ago
  I would assume that the count includes the huge amount of people who sell cheap, unbranded Chinese products under a random all-caps name. So, not that surprising.
  - function_seven 5y ago
    Why the all-caps brands for these? Is there some belief that it stands out more or something? Because it does, and not in a good way. I skip all those when I'm browsing search results.
    - urthor 5y ago
      Many official looking order forms and paperwork in supply chains come filled out in all caps. It's a descendant of all those forms you would fill in with pencil and they'd say "MUST HAVE CAPITAL LETTERS" for legibility. I suspect that all those all caps descriptions come from when someone has quickly copied and pasted text from manifests and the like, directly into something customer facing.
      - sokoloff 5y ago
        These brands are often pad printed onto the products though (pointlessly, IMO), which is upstream of manifesting.
        ziml77 5y ago
        Not always. I've seen the name photoshopped on the listing photos and then be completely absent on the actual item.
    - sokoloff 5y ago
      I’ve bought some of these all-caps items and some (probably over half) have been surprisingly good products. I’m not deciding between them and Apple usually, but between those brands on Amazon and the same products on Ali. Now that Ali shipping has been nerfed, I often buy from Amazon.
      - dannyw 5y ago
        My general experience is these products are often 70-90% just as good for my needs, at like half the price. I also get duds, which I return and 1 star.
    - thaumasiotes 5y ago
      > Why the all-caps brands for these? Is there some belief that it stands out more or something? In some cases it may be the only thing the person knows how to do. When I texted something to the person who recorded my electricity meter in Shanghai, I got back the response "哈哈，THANKS".
      - jwong_ 5y ago
        They are most likely not switching language in their phone - you can see it with the full width punctuation. In Chinese mode, typing English is a little annoying to get case right. A lot of Chinese people don’t differentiate between case also.
        thaumasiotes 5y ago
        To be totally fair, I have no memory of what kind of comma they used and the fullwidth one that I used represents an assumption by me. What stuck in my mind was the casing. But other than that, yeah, I came to basically the same conclusion that you give here.
- floxy 5y ago
  Does that include everyone who has ever sold a used book on Amazon? Because I sold a few of my old college text books on Amazon about 20 years ago.
  - vinay427 5y ago
    I would assume the number includes all unique seller accounts as it doesn’t specify a constraint on seller activity or similar. In fact, (less reputable) data from marketplace research claims a far higher number in 2021 of over 6 million. https://www.marketplacepulse.com/articles/amazon-reaches-six-million-third-party-sellers https://www.marketplacepulse.com/articles/amazon-reaches-six...
- imroot 5y ago
  I wonder if this includes inactive sellers. In 2014/2015, I would buy insurance cargo from truck accidents: I had the space and the ability to grab and store the items until I could resell them via secondary means: This usually meant working with buyers at stores like BigLots and other discount stores, but, occasionally I'd get electronics (which isn't something that those stores really wanted). I came across a huge lot of LG monitors that were involved in some fender-bender. Out of the lot of approximately 24 per pallet, only two were visibly damaged, and I had 12 pallets worth of monitors and the cost per-pound evened out to approximately $35/monitor. I would sell these monitors, which were retailing for right around $200/each new, for approximately $150 in "Open Box" condition on Amazon, and would consistently sell anywhere between 8-10 of them a week. Amazon charged me: Cost for getting my items to Amazon (Usually around 9-11/each, depending on season and how busy UPS is), Cost for storing my item in their warehouse (usually around $2-4/month, depending on season), cost for picking and shipping my item (around $30 because it was considered oversize), and the constant reminder that these weren't my customers, they were amazon's customers (customers would "return" items, so, I'd get the entire cost of the item removed from my seller account, because, Amazon wouldn't eat their own fees here, and then have to fight them to get my money back when that customer wouldn't return the item). Amazon also fiercely competed with me on these monitors -- they'd knock down the cost of their "new" items down to what my refurbished cost would be...cutting me out of the 'buy box,' but, losing what I can only assume is about $30+ per monitor wasn't something that they did for long, as after a week or so, the price would be set back at MAP until I'd go and build a new shipment of items into Amazon, set a price lower than theirs, and then they'd automatically bring down their pricing to meet mine. Amazon's profit to me would be around 40% -- around 80 dollars. In 2016, Amazon changed the rules so I couldn't sell the items as "Open Box" and would have to sell them as "Used" because I didn't qualify under the rules as a refurbisher. (admittedly, by that time, I transitioned away from selling items on Amazon and use a different channel for the sales of these items). There are a lot of snake oil salesman selling "how to make money on FBA" videos and courses online, but, the reality is that the only entity who makes money selling new items on Amazon is Amazon.
granzymes 5y ago
I was surprised that the consent decree required the program to be shut down nationwide, but it looks like the program began in 2018 and was ended in 2020.
ramesh31 5y ago
It snowed really hard here recently. I went to buy two plastic sleds on Amazon, the type you find at a Walgreens for $5. They were $70. I've pretty much curbed my Amazon use for anything but niche hard to find items at this point.
- munificent 5y ago
  Giant cheap plastic things are essentially a worst-case use for Amazon because the individual delivery cost is most of the price. When you get a 5$ sled at Walgreens, it's cheap because you get in your car and do the last-mile logistics yourself.
  - deleted 5y ago
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  - comice 5y ago
    there is truth in that but it does not cost 65 dollars to stock and deliver a sled.
    - maxk42 5y ago
      No, but $20 - $30 might be reasonable, and anything cheaper than $70 might be sold out by then.
    - munificent 5y ago
      Sure, but if $70 is what someone is willing to pay to not have to drive to Walgreens, why would they price it lower?
bryanrasmussen 5y ago
although I think it's great that it's getting shut down I don't like this part: Amazon will pay $2.25 million to the Attorney General’s Office, which will be used to support the Attorney General’s antitrust enforcement, which does not receive general fund support.
- vmception 5y ago
  kickback and relax, emphasis on kickback
- pm90 5y ago
  Agreed. Fines as a way of funding is almost always bad. If that money was to provide relief to aggrieved customers, that would certainly be different.
  - pueblito 5y ago
    Are you concerned the financial motive will drive them to break up too many companies? Because right now I think that’s a great idea
    - pm90 5y ago
      That’s the thing, they may not break up companies, or pursue bad actors to the fullest extent of the law if they depend on fines for funding. It creates perverse incentives… we’ve seen this with eg police departments over relying on fines. The goal of the agency should first and foremost be the protection of the public, not to extort funding.
    - zepto 5y ago
      Any mistake breaking up companies ruins people’s careers and harms the economy needlessly. A perverse incentive to do so is stupidity. It may be necessary sometimes, but it should be very carefully considered.
outside1234 5y ago
"In addition, Amazon will pay $2.25 million to the Attorney General’s Office, which will be used to support the Attorney General’s antitrust enforcement, which does not receive general fund support." Not sure if I am more concerned that this puts a heavy incentive for the AG to go out and "get funding" from companies or that they are not funded to do this work.
- politician 5y ago
  It's just a payoff.
valar_m 5y ago
Former Amazonian here. When i was there, they made us take this antitrust training course that had things like "don't use terms like 'market share' in internal communications", but all along there were people doing this? I mean...
- colinmhayes 5y ago
  Why would they waste employee time on antitrust training if they were innocent?
  - robbedpeter 5y ago
    Corporate ass-covering.
  - seanmcdirmid 5y ago
    All big corps require you to take this kind of training.
    - deleted 5y ago
      [deleted]
    - Supermancho 5y ago
      > All big corps require you to take this kind of training. I've worked at a couple "big corps" as an internal developer. JPMC, BestBuy, Experian, etc. Never encountered it. I suspect it's only for those companies in danger (or with a history of being charged with) breeching anti-trust.
      - jamesfinlayson 5y ago
        Maybe it depends on the industry? I've worked in big companies with big interests in goverment-regulated industries and every single person has had to do this sort of training, regardless of role (there'll be a course every month, and big responsibilities like anti-money laundering and corruption get rehashed yearly).
      - 5y ago
ghostly_s 5y ago
Why are regulators incapable of assessing meaningful punitive damages? 2.5 million is peanuts to Amazon.
- philipov 5y ago
  https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
- cellis 5y ago
  Phrased another way, 2.5 million is roughly 3 minutes of revenue for Amazon.
- reaperducer 5y ago
  It's not great that corps get away with paying such small fines. But in a case like this, I surmise that it's a way for the AG to extract a fine that is big enough to be meaningful to some people, but small enough that Amazon isn't going to drag it through the courts for the next decade.
  - Aloha 5y ago
    Its big enough that someones bonus pool got wiped out.
    - cellis 5y ago
      Doubtful. In house Counsel probably pocketed a fat bonus for this masterful litigation.
- dgrin91 5y ago
  Arguably the more important outcome than monetary damages is that the offending program is ceased. From the press release - > Amazon will shut down the “Sold by Amazon” program nationwide. So in principle the problem has been stopped. Now whether Amazon will make a new "Buy from Amazon" program in 5 seconds that will have slightly modified details is to be seen...
stefan_ 5y ago
How much revenue did that program generate? That should be the fine, obviously. Alongside the criminal prosecution.
- CameronNemo 5y ago
  If revenue generated > fine * estimated probability of getting caught, then do a badness.
- ortusdux 5y ago
  This definitely feels like class action lawsuit territory to me.
  - tempest_ 5y ago
    I shall eagerly await my cheque for $0.27 that I will never receive.
- hffftz 5y ago
- 0x262d 5y ago
  why are we operating national, natural monopoly services on a for-profit basis that fundamentally incentivizes this in the first place (rhetorical). Amazon deserves to be taken into democratic public ownership for nominal compensation.
8bitsrule 5y ago
Nice. If the US had 49 more Bob Fergusons, things would get different a lot closer to tomorrow.
yazaddaruvala 5y ago
I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit, we will make another 200 offers like this very soon.". Why is there a legal difference between buying in bulk once and buying 1 many times? Disclaimer: I used to work for Amazon in Marketplace, but never on this feature.
- bo1024 5y ago
  It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amazon raises competitor's the price to $24, but keeps its own dongle priced at $20. > The “Sold by Amazon” program resulted in prices for some products increasing when Amazon programmed its pricing algorithm to match the prices that certain external retailers offer to online consumers. > As a result, when prices increased, some sellers experienced a marked decline in the sales and resulting profits from products enrolled in the program. Faced with price increases, online customers sometimes opted to buy Amazon’s own branded products — particularly its private label products. This resulted in Amazon maximizing its own profits regardless of whether consumers paid a higher price for sales of products enrolled in the “Sold by Amazon” program or settled for buying the same or similar product offered through Amazon.
  - deleted 5y ago
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  - blocked_again 5y ago
    Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.
lucas_membrane 5y ago
It was pretty obvious what Amazon wanted from its business partners if you look at abebooks, a site owned by amazon, but not visibly if you just look at abebooks.com. 'Independent' booksellers sell used books through abebooks, but never for less than amazon sells the same books.
- deleted 5y ago
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- WaitWaitWha 5y ago
  > but not visibly if you just look at abebooks.com At first (admittedly lazy) glance I agree. As soon as you click on the jobs link it takes you to Amazon. Looking at their wikip entry, it states abebooks was acquired by Amazon in 2008. If they are attempting to hide it, they are doing a terrible job.
  - parrellel 5y ago
    Go look at the "become an affiliate page" for contrast.
- judge2020 5y ago
  The abebooks login page is clearly a carbon copy of Amazon, and the ‘about us’ page says > We're a subsidiary of Amazon.com, Inc. after being acquired in December 2008.
  - degenerate 5y ago
    I never realized AbeBooks was owned by Amazon, but I've never bought a book from there because the Amazon price was always the same or better. Now it makes sense why.
- bolasanibk 5y ago
  I do not have a reference right now, but I remember reading that one of the conditions for listing your product on Amazon is that you cannot sell it for less anywhere else.
throw_nbvc1234 5y ago
In case others were as confused as i was about this "While they’re often confused, Sold by Amazon and Fulfilled by Amazon are two different things. With SBA, Amazon prices your products and owns any transactions that take place. When an item sells, they pass the proceeds on to you for allowing them to sell your product. With FBA, you price your products and own the transactions. It is a service where Amazon handles the order fulfillment process for your products." https://amzscout.net/blog/sold-by-amazon/ https://amzscout.net/blog/sold-by-amazon/
- ISL 5y ago
  I'm extra confused, as I'd interpreted "Ships from and sold by Amazon" as "Amazon supplied the goods and will vouch for their validity", whereas "Sold by ISL" would have meant that ISL was on the ultimate hook should the goods prove to be counterfeit. Learn something new (and important) every day.
  - pstrateman 5y ago
    Sold by Amazon and Fulfilled by Amazon seem to come out of the same box at the warehouse. Unfortunately if you really need genuine products you simply cannot buy things off Amazon anymore.
    - dannyw 5y ago
      To be specific, Amazon co-mingles inventory between Amazon, Sold by Amazon, and its third party sellers that are Fulfilled by Amazon. It doesn't matter who you buy from. The picker at the warehouse picks from the same box, the actual product could come from any seller, even if it's "Sold by Amazon". Who you purchase from is purely an accounting thing, unless they manage their own stock and is not part of Prime. If you would like assurance that the goods you purchased actually us genuine, you have to shop from other retailers.
      - addaon 5y ago
        They don't co-mingle inventory on everything, it varies from product to product (although the majority are indeed co-mingled). While there's no visible way to tell if a product is co-mingled, Amazon support is able to look it up. Whenever I'm buying an item that I would be unhappy with a counterfeit (so anything expensive, electronic, or that goes in my mouth or body) I contact Amazon support by live chat and ask them about that particular item. It generally takes about one minute of my time, spread over half an hour as they chase things down and escalate -- probably ends up costing them a heck of a lot more in support costs than they make on the item, but perhaps if it costs them enough they'll just expose the info?
voz_ 5y ago
Perfect. Amazon is a leech.
- AussieWog93 5y ago
  Amazon is a huge bureaucracy. Some parts of it (FBA, AWS) have done wonders for democratising access to cutting edge business tools. Other parts of it are rent-seeking.
  - salawat 5y ago
    Excuse me, what makes you think AWS isn't fundamentally rent seeking? The brainwave of AWS was figuring out how to meter basic compute tasks. AWS = An implementation toolkit for cobbling together and paying rent on an ESB.
    - AussieWog93 5y ago
      From my understanding (I may be wrong), rent-seeking in the economic sense is not literally about receiving payment to loan another party an asset (e.g. car rental), but about engaging in zero-sum or negative-sum economic activity. For example, patent troll companies would be rent-seeking because they don't create any value for other participants in the economy (except for perhaps lawyers!). Amazon's primary retail business could also be seen as rent-seeking to an extent because their massive market share essentially forces businesses to sell through their platform and give them a 10-15% cut of the sale. AWS, on the other hand, is (or at least was) a genuinely innovative solution to people's problems. It gave small organisations access to supercomputers at affordable rates, in a non-monopolistic way, and in turn created much more wealth for the broader economy than Amazon themselves extracted through AWS fees.
ineedasername 5y ago
>participating sellers had limited, if any, ability to lower the price of their products without withdrawing the product’s enrollment in the Sold by Amazon program. This sounds similar to how traditional retail works though: If company $A sells products through big box store $B, there may be an agreed upon price (Apple does this), but $B usually has discretion over pricing, and might stop carrying a $A's product if $A wants to sell elsewhere at a lower price. In this case the seller could still sell on Amazon, just not as an official Amazon-sponsored product. So I'm not sure how this reaches an anti-trust level when it appears substantially similar to normal retail sales. In fact in supermarkets it's not uncommon for the store to sell its own competing products-- the store brand-- which seems to fit the Amazon situation as well.
skarz 5y ago
Now if only the people behind diapers.com made a comeback. This whole thing was sparked by that case where Amazon priced out diapers.com to make them go bankrupt - only to turn around and buy diapers.com
- hoofhearted 5y ago
  Marc Lore sold Diapers.com and his others sites to Amazon and worked for them for a couple years. He then left Amazon and founded Jet.com. He ran Jet for a little bit and then sold it to Walmart. Walmart put him in charge of their US e-commerce sales, and they shut Jet down and pointed the domain to Walmart.com. He left Walmart in recent years and I’m not sure what he’s up to currently.
bondolo 5y ago
I feel mixed about this because "sold by Amazon" meant that if there was a problem I got to deal with Amazon customer service rather than trying to get service from some Joe with a mailbox 3rd-party reseller. Yes, I often knew I was paying more and explicitly chose the SBA option as a loss-risk reduction strategy.
- ec109685 5y ago
  Fulfilled by Amazon gives you the same benefits and is a program that still exists.
- divbzero 5y ago
  Like you, I am willing to pay a extra for “Sold by Amazon” for the reliable customer service and return policy. But I do not like Amazon coordinating with other sellers to fix the price and would want them to compete head-on.
- YeBanKo 5y ago
  Amazon can still sell on their own. They just can’t enter into a price matching agreement with 3rd party sellers any more.
zw123456 5y ago
Bob wants US AG job. I am for all it, he has proved himself IMO. Being ambitious is OK especially when you are helping people. my 2 cents.
SMAAART 5y ago
Do know evil.
exabrial 5y ago
> fined $2.25 million That's loose change for them
jbotdev 5y ago
One consequence of this I haven’t seen mentioned yet: price matching at competing retailers may no longer work. I often end up purchasing items at local stores, which tend to have higher prices, but happily price match to items “Shipped and Sold by Amazon”. I can see how it can be hard to abide by pricing from any random third-party seller, but evidently even the “Sold by Amazon” items were third-party anyway.
efitz 5y ago
$2.5 million is just over a half hour (33.6 min) of net sales reported on Amazon's 2020 annual report, or put another way, 0.0006% of net sales. I don't understand why the WA state attorney general considers that any sort of punishment. I'm not anti-Amazon and don't even understand the alleged bad behavior. My point is that if governments want any corporation to behave, then the punishment has to be enough to deter future bad behavior. I don't see how this crosses the threshold where the corporation even cares about fines like this. Now if courts start imposing fines/settlements/whatever that are double digit percentages of net sales, then I'd bet corporations would care deeply about it and start training their executives how not to be evil, and HBR would write articles about renewing ethics in corporations, and consultants would start offering ethical business practice training, etc.
- abletonlive 5y ago
  Because the 2.5 million isn't a punishment. It's to "support the AG's anti-trust enforcement which does not receive general fund support". Did you even read the link? The punishment is that they can no longer have this program.
snow_mac 5y ago
One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make their own legos through a different supplier, they fixed the original Lego price $5 more expensive then the store brand legos. Now Legos sell for $30 a box and Kirkland Legos sell for $25 a box, same exact product, just a few bucks cheaper. Oh and lego couldn't drop the price from 30 to 20 to compete.... That's what Amazon has done. Price fixing and control of the competitors inventory. Damn bastards.
- Permit 5y ago
  > It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?
  - bryanrasmussen 5y ago
    It's somewhat similar in books IIRC, if the books don't sell you send back covers of the books and get reimbursed? (based on info from 20 years ago, pretty static industry so probably still the same) on edit: of course book stores don't compete with publishers.
    - moate 5y ago
      Not all industries have buybacks, and many producers won't take on contracts that involve them. (Fun Fact for anyone not familiar with this practice: in publishing the covers were shipped back as the proof because whole books are heavy/costly to ship and take up a lot of space/costly to warehouse so the retailer with them on hand would just have the rest of the book pulped).
Zenst 5y ago
I wonder how this will play out globally as nationwide is just one nation and not Worldwide. Certainly be interesting how this plays out and did have a quick dig too see if the EU is, or has anything in the pipeline, though nothing jumping out. As for my country (UK), I did find this - https://www.gov.uk/government/case-studies/online-sellers-price-fixing-case-study https://www.gov.uk/government/case-studies/online-sellers-pr... So this is a story that will ripple and certainly, thanks to Washington states work, there is a smoking gun. Will Amazon proactively get on top of this Worldwide in other countries will be most telling. But one aspect of companies doing wrong by consumers and respective authorities fining them that always irks me - the consumers who suffered and paid the price never get a slice of those fines. That and fines of large companies has in all effect, become a revenue stream for respective government's with the consumer getting justice in name only and the government's coining it, in effect at the expense of the consumers. Be those consumers of suffered such bad company practices, or future customers who will be paying indirectly for such fines. After all, will they force Amazon to dig in and compensate effected/impacted consumers of such price-fixing? That would be nice. Equally, be nice if Amazon in good faith did the right thing by those impacted. One can but dream and hope.
vincnetas 5y ago
if this "fine" would have been given to me proportionally to my income, i would have to pay 0.33 cents. i see no initiative to stop inventing other creative ways to do business.
netcan 5y ago
Every time I read one of these articles on modern antitrust, I get frustrated by the laws themselves. Win or lose on the case, I don't think they do much. Everything seems to be based on a marginalist theory/formalisation of what monopolies are and how they affect economies. The theory/law seems to target very specific sets of economic dynamics. IRL, monopoly is a more nebulous concept. Size, power, ability to structure the market are often its primary characteristics, not a simple more-profit-less-utility outcome that can be charted with a simple model. Actual antitrust, I think, needs to be more like an industrial policy set than what exists currently. Whatever the outcome of current antitrust actions, the monopolies stay mostly intact and unharmed. What's the point?
HostileGinger 5y ago

686 points by ilamont 5y ago

"There are about 2.3 million third-party sellers on Amazon worldwide, according to information from a 2018 Amazon letter to its shareholders" That number is pretty amazing. I never would've guessed over 2 million, and that number must be higher by now.

ziml77 5y ago
I would assume that the count includes the huge amount of people who sell cheap, unbranded Chinese products under a random all-caps name. So, not that surprising.
- function_seven 5y ago
  Why the all-caps brands for these? Is there some belief that it stands out more or something? Because it does, and not in a good way. I skip all those when I'm browsing search results.
  - urthor 5y ago
    Many official looking order forms and paperwork in supply chains come filled out in all caps. It's a descendant of all those forms you would fill in with pencil and they'd say "MUST HAVE CAPITAL LETTERS" for legibility. I suspect that all those all caps descriptions come from when someone has quickly copied and pasted text from manifests and the like, directly into something customer facing.
    - sokoloff 5y ago
      These brands are often pad printed onto the products though (pointlessly, IMO), which is upstream of manifesting.
      - ziml77 5y ago
        Not always. I've seen the name photoshopped on the listing photos and then be completely absent on the actual item.
  - sokoloff 5y ago
    I’ve bought some of these all-caps items and some (probably over half) have been surprisingly good products. I’m not deciding between them and Apple usually, but between those brands on Amazon and the same products on Ali. Now that Ali shipping has been nerfed, I often buy from Amazon.
    - dannyw 5y ago
      My general experience is these products are often 70-90% just as good for my needs, at like half the price. I also get duds, which I return and 1 star.
  - thaumasiotes 5y ago
    > Why the all-caps brands for these? Is there some belief that it stands out more or something? In some cases it may be the only thing the person knows how to do. When I texted something to the person who recorded my electricity meter in Shanghai, I got back the response "哈哈，THANKS".
    - jwong_ 5y ago
      They are most likely not switching language in their phone - you can see it with the full width punctuation. In Chinese mode, typing English is a little annoying to get case right. A lot of Chinese people don’t differentiate between case also.
      - thaumasiotes 5y ago
        To be totally fair, I have no memory of what kind of comma they used and the fullwidth one that I used represents an assumption by me. What stuck in my mind was the casing. But other than that, yeah, I came to basically the same conclusion that you give here.
floxy 5y ago
Does that include everyone who has ever sold a used book on Amazon? Because I sold a few of my old college text books on Amazon about 20 years ago.
- vinay427 5y ago
  I would assume the number includes all unique seller accounts as it doesn’t specify a constraint on seller activity or similar. In fact, (less reputable) data from marketplace research claims a far higher number in 2021 of over 6 million. https://www.marketplacepulse.com/articles/amazon-reaches-six-million-third-party-sellers https://www.marketplacepulse.com/articles/amazon-reaches-six...
imroot 5y ago
I wonder if this includes inactive sellers. In 2014/2015, I would buy insurance cargo from truck accidents: I had the space and the ability to grab and store the items until I could resell them via secondary means: This usually meant working with buyers at stores like BigLots and other discount stores, but, occasionally I'd get electronics (which isn't something that those stores really wanted). I came across a huge lot of LG monitors that were involved in some fender-bender. Out of the lot of approximately 24 per pallet, only two were visibly damaged, and I had 12 pallets worth of monitors and the cost per-pound evened out to approximately $35/monitor. I would sell these monitors, which were retailing for right around $200/each new, for approximately $150 in "Open Box" condition on Amazon, and would consistently sell anywhere between 8-10 of them a week. Amazon charged me: Cost for getting my items to Amazon (Usually around 9-11/each, depending on season and how busy UPS is), Cost for storing my item in their warehouse (usually around $2-4/month, depending on season), cost for picking and shipping my item (around $30 because it was considered oversize), and the constant reminder that these weren't my customers, they were amazon's customers (customers would "return" items, so, I'd get the entire cost of the item removed from my seller account, because, Amazon wouldn't eat their own fees here, and then have to fight them to get my money back when that customer wouldn't return the item). Amazon also fiercely competed with me on these monitors -- they'd knock down the cost of their "new" items down to what my refurbished cost would be...cutting me out of the 'buy box,' but, losing what I can only assume is about $30+ per monitor wasn't something that they did for long, as after a week or so, the price would be set back at MAP until I'd go and build a new shipment of items into Amazon, set a price lower than theirs, and then they'd automatically bring down their pricing to meet mine. Amazon's profit to me would be around 40% -- around 80 dollars. In 2016, Amazon changed the rules so I couldn't sell the items as "Open Box" and would have to sell them as "Used" because I didn't qualify under the rules as a refurbisher. (admittedly, by that time, I transitioned away from selling items on Amazon and use a different channel for the sales of these items). There are a lot of snake oil salesman selling "how to make money on FBA" videos and courses online, but, the reality is that the only entity who makes money selling new items on Amazon is Amazon.

granzymes 5y ago

I was surprised that the consent decree required the program to be shut down nationwide, but it looks like the program began in 2018 and was ended in 2020.

ramesh31 5y ago

It snowed really hard here recently. I went to buy two plastic sleds on Amazon, the type you find at a Walgreens for $5. They were $70. I've pretty much curbed my Amazon use for anything but niche hard to find items at this point.

munificent 5y ago
Giant cheap plastic things are essentially a worst-case use for Amazon because the individual delivery cost is most of the price. When you get a 5$ sled at Walgreens, it's cheap because you get in your car and do the last-mile logistics yourself.
- deleted 5y ago
  [deleted]
- comice 5y ago
  there is truth in that but it does not cost 65 dollars to stock and deliver a sled.
  - maxk42 5y ago
    No, but $20 - $30 might be reasonable, and anything cheaper than $70 might be sold out by then.
  - munificent 5y ago
    Sure, but if $70 is what someone is willing to pay to not have to drive to Walgreens, why would they price it lower?

bryanrasmussen 5y ago

although I think it's great that it's getting shut down I don't like this part: Amazon will pay $2.25 million to the Attorney General’s Office, which will be used to support the Attorney General’s antitrust enforcement, which does not receive general fund support.

vmception 5y ago
kickback and relax, emphasis on kickback
pm90 5y ago
Agreed. Fines as a way of funding is almost always bad. If that money was to provide relief to aggrieved customers, that would certainly be different.
- pueblito 5y ago
  Are you concerned the financial motive will drive them to break up too many companies? Because right now I think that’s a great idea
  - pm90 5y ago
    That’s the thing, they may not break up companies, or pursue bad actors to the fullest extent of the law if they depend on fines for funding. It creates perverse incentives… we’ve seen this with eg police departments over relying on fines. The goal of the agency should first and foremost be the protection of the public, not to extort funding.
  - zepto 5y ago
    Any mistake breaking up companies ruins people’s careers and harms the economy needlessly. A perverse incentive to do so is stupidity. It may be necessary sometimes, but it should be very carefully considered.

outside1234 5y ago

"In addition, Amazon will pay $2.25 million to the Attorney General’s Office, which will be used to support the Attorney General’s antitrust enforcement, which does not receive general fund support." Not sure if I am more concerned that this puts a heavy incentive for the AG to go out and "get funding" from companies or that they are not funded to do this work.

politician 5y ago
It's just a payoff.

valar_m 5y ago

Former Amazonian here. When i was there, they made us take this antitrust training course that had things like "don't use terms like 'market share' in internal communications", but all along there were people doing this? I mean...

colinmhayes 5y ago
Why would they waste employee time on antitrust training if they were innocent?
- robbedpeter 5y ago
  Corporate ass-covering.
- seanmcdirmid 5y ago
  All big corps require you to take this kind of training.
  - deleted 5y ago
    [deleted]
  - Supermancho 5y ago
    > All big corps require you to take this kind of training. I've worked at a couple "big corps" as an internal developer. JPMC, BestBuy, Experian, etc. Never encountered it. I suspect it's only for those companies in danger (or with a history of being charged with) breeching anti-trust.
    - jamesfinlayson 5y ago
      Maybe it depends on the industry? I've worked in big companies with big interests in goverment-regulated industries and every single person has had to do this sort of training, regardless of role (there'll be a course every month, and big responsibilities like anti-money laundering and corruption get rehashed yearly).
    - 5y ago

ghostly_s 5y ago

Why are regulators incapable of assessing meaningful punitive damages? 2.5 million is peanuts to Amazon.

philipov 5y ago
https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
cellis 5y ago
Phrased another way, 2.5 million is roughly 3 minutes of revenue for Amazon.
reaperducer 5y ago
It's not great that corps get away with paying such small fines. But in a case like this, I surmise that it's a way for the AG to extract a fine that is big enough to be meaningful to some people, but small enough that Amazon isn't going to drag it through the courts for the next decade.
- Aloha 5y ago
  Its big enough that someones bonus pool got wiped out.
  - cellis 5y ago
    Doubtful. In house Counsel probably pocketed a fat bonus for this masterful litigation.
dgrin91 5y ago
Arguably the more important outcome than monetary damages is that the offending program is ceased. From the press release - > Amazon will shut down the “Sold by Amazon” program nationwide. So in principle the problem has been stopped. Now whether Amazon will make a new "Buy from Amazon" program in 5 seconds that will have slightly modified details is to be seen...

stefan_ 5y ago

How much revenue did that program generate? That should be the fine, obviously. Alongside the criminal prosecution.

CameronNemo 5y ago
If revenue generated > fine * estimated probability of getting caught, then do a badness.
ortusdux 5y ago
This definitely feels like class action lawsuit territory to me.
- tempest_ 5y ago
  I shall eagerly await my cheque for $0.27 that I will never receive.
hffftz 5y ago
0x262d 5y ago
why are we operating national, natural monopoly services on a for-profit basis that fundamentally incentivizes this in the first place (rhetorical). Amazon deserves to be taken into democratic public ownership for nominal compensation.

8bitsrule 5y ago

Nice. If the US had 49 more Bob Fergusons, things would get different a lot closer to tomorrow.

yazaddaruvala 5y ago

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit, we will make another 200 offers like this very soon.". Why is there a legal difference between buying in bulk once and buying 1 many times? Disclaimer: I used to work for Amazon in Marketplace, but never on this feature.

bo1024 5y ago
It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amazon raises competitor's the price to $24, but keeps its own dongle priced at $20. > The “Sold by Amazon” program resulted in prices for some products increasing when Amazon programmed its pricing algorithm to match the prices that certain external retailers offer to online consumers. > As a result, when prices increased, some sellers experienced a marked decline in the sales and resulting profits from products enrolled in the program. Faced with price increases, online customers sometimes opted to buy Amazon’s own branded products — particularly its private label products. This resulted in Amazon maximizing its own profits regardless of whether consumers paid a higher price for sales of products enrolled in the “Sold by Amazon” program or settled for buying the same or similar product offered through Amazon.
- deleted 5y ago
  [deleted]
- blocked_again 5y ago
  Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.

lucas_membrane 5y ago

It was pretty obvious what Amazon wanted from its business partners if you look at abebooks, a site owned by amazon, but not visibly if you just look at abebooks.com. 'Independent' booksellers sell used books through abebooks, but never for less than amazon sells the same books.

deleted 5y ago
[deleted]
WaitWaitWha 5y ago
> but not visibly if you just look at abebooks.com At first (admittedly lazy) glance I agree. As soon as you click on the jobs link it takes you to Amazon. Looking at their wikip entry, it states abebooks was acquired by Amazon in 2008. If they are attempting to hide it, they are doing a terrible job.
- parrellel 5y ago
  Go look at the "become an affiliate page" for contrast.
judge2020 5y ago
The abebooks login page is clearly a carbon copy of Amazon, and the ‘about us’ page says > We're a subsidiary of Amazon.com, Inc. after being acquired in December 2008.
- degenerate 5y ago
  I never realized AbeBooks was owned by Amazon, but I've never bought a book from there because the Amazon price was always the same or better. Now it makes sense why.
bolasanibk 5y ago
I do not have a reference right now, but I remember reading that one of the conditions for listing your product on Amazon is that you cannot sell it for less anywhere else.

throw_nbvc1234 5y ago

In case others were as confused as i was about this "While they’re often confused, Sold by Amazon and Fulfilled by Amazon are two different things. With SBA, Amazon prices your products and owns any transactions that take place. When an item sells, they pass the proceeds on to you for allowing them to sell your product. With FBA, you price your products and own the transactions. It is a service where Amazon handles the order fulfillment process for your products." https://amzscout.net/blog/sold-by-amazon/ https://amzscout.net/blog/sold-by-amazon/

ISL 5y ago
I'm extra confused, as I'd interpreted "Ships from and sold by Amazon" as "Amazon supplied the goods and will vouch for their validity", whereas "Sold by ISL" would have meant that ISL was on the ultimate hook should the goods prove to be counterfeit. Learn something new (and important) every day.
- pstrateman 5y ago
  Sold by Amazon and Fulfilled by Amazon seem to come out of the same box at the warehouse. Unfortunately if you really need genuine products you simply cannot buy things off Amazon anymore.
  - dannyw 5y ago
    To be specific, Amazon co-mingles inventory between Amazon, Sold by Amazon, and its third party sellers that are Fulfilled by Amazon. It doesn't matter who you buy from. The picker at the warehouse picks from the same box, the actual product could come from any seller, even if it's "Sold by Amazon". Who you purchase from is purely an accounting thing, unless they manage their own stock and is not part of Prime. If you would like assurance that the goods you purchased actually us genuine, you have to shop from other retailers.
    - addaon 5y ago
      They don't co-mingle inventory on everything, it varies from product to product (although the majority are indeed co-mingled). While there's no visible way to tell if a product is co-mingled, Amazon support is able to look it up. Whenever I'm buying an item that I would be unhappy with a counterfeit (so anything expensive, electronic, or that goes in my mouth or body) I contact Amazon support by live chat and ask them about that particular item. It generally takes about one minute of my time, spread over half an hour as they chase things down and escalate -- probably ends up costing them a heck of a lot more in support costs than they make on the item, but perhaps if it costs them enough they'll just expose the info?

voz_ 5y ago

Perfect. Amazon is a leech.

AussieWog93 5y ago
Amazon is a huge bureaucracy. Some parts of it (FBA, AWS) have done wonders for democratising access to cutting edge business tools. Other parts of it are rent-seeking.
- salawat 5y ago
  Excuse me, what makes you think AWS isn't fundamentally rent seeking? The brainwave of AWS was figuring out how to meter basic compute tasks. AWS = An implementation toolkit for cobbling together and paying rent on an ESB.
  - AussieWog93 5y ago
    From my understanding (I may be wrong), rent-seeking in the economic sense is not literally about receiving payment to loan another party an asset (e.g. car rental), but about engaging in zero-sum or negative-sum economic activity. For example, patent troll companies would be rent-seeking because they don't create any value for other participants in the economy (except for perhaps lawyers!). Amazon's primary retail business could also be seen as rent-seeking to an extent because their massive market share essentially forces businesses to sell through their platform and give them a 10-15% cut of the sale. AWS, on the other hand, is (or at least was) a genuinely innovative solution to people's problems. It gave small organisations access to supercomputers at affordable rates, in a non-monopolistic way, and in turn created much more wealth for the broader economy than Amazon themselves extracted through AWS fees.

ineedasername 5y ago

>participating sellers had limited, if any, ability to lower the price of their products without withdrawing the product’s enrollment in the Sold by Amazon program. This sounds similar to how traditional retail works though: If company $A sells products through big box store $B, there may be an agreed upon price (Apple does this), but $B usually has discretion over pricing, and might stop carrying a $A's product if $A wants to sell elsewhere at a lower price. In this case the seller could still sell on Amazon, just not as an official Amazon-sponsored product. So I'm not sure how this reaches an anti-trust level when it appears substantially similar to normal retail sales. In fact in supermarkets it's not uncommon for the store to sell its own competing products-- the store brand-- which seems to fit the Amazon situation as well.

skarz 5y ago

Now if only the people behind diapers.com made a comeback. This whole thing was sparked by that case where Amazon priced out diapers.com to make them go bankrupt - only to turn around and buy diapers.com

hoofhearted 5y ago
Marc Lore sold Diapers.com and his others sites to Amazon and worked for them for a couple years. He then left Amazon and founded Jet.com. He ran Jet for a little bit and then sold it to Walmart. Walmart put him in charge of their US e-commerce sales, and they shut Jet down and pointed the domain to Walmart.com. He left Walmart in recent years and I’m not sure what he’s up to currently.

bondolo 5y ago

I feel mixed about this because "sold by Amazon" meant that if there was a problem I got to deal with Amazon customer service rather than trying to get service from some Joe with a mailbox 3rd-party reseller. Yes, I often knew I was paying more and explicitly chose the SBA option as a loss-risk reduction strategy.

ec109685 5y ago
Fulfilled by Amazon gives you the same benefits and is a program that still exists.
divbzero 5y ago
Like you, I am willing to pay a extra for “Sold by Amazon” for the reliable customer service and return policy. But I do not like Amazon coordinating with other sellers to fix the price and would want them to compete head-on.
YeBanKo 5y ago
Amazon can still sell on their own. They just can’t enter into a price matching agreement with 3rd party sellers any more.

zw123456 5y ago

Bob wants US AG job. I am for all it, he has proved himself IMO. Being ambitious is OK especially when you are helping people. my 2 cents.

SMAAART 5y ago

Do know evil.

exabrial 5y ago

> fined $2.25 million That's loose change for them

jbotdev 5y ago

One consequence of this I haven’t seen mentioned yet: price matching at competing retailers may no longer work. I often end up purchasing items at local stores, which tend to have higher prices, but happily price match to items “Shipped and Sold by Amazon”. I can see how it can be hard to abide by pricing from any random third-party seller, but evidently even the “Sold by Amazon” items were third-party anyway.

efitz 5y ago

$2.5 million is just over a half hour (33.6 min) of net sales reported on Amazon's 2020 annual report, or put another way, 0.0006% of net sales. I don't understand why the WA state attorney general considers that any sort of punishment. I'm not anti-Amazon and don't even understand the alleged bad behavior. My point is that if governments want any corporation to behave, then the punishment has to be enough to deter future bad behavior. I don't see how this crosses the threshold where the corporation even cares about fines like this. Now if courts start imposing fines/settlements/whatever that are double digit percentages of net sales, then I'd bet corporations would care deeply about it and start training their executives how not to be evil, and HBR would write articles about renewing ethics in corporations, and consultants would start offering ethical business practice training, etc.

abletonlive 5y ago
Because the 2.5 million isn't a punishment. It's to "support the AG's anti-trust enforcement which does not receive general fund support". Did you even read the link? The punishment is that they can no longer have this program.

snow_mac 5y ago

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make their own legos through a different supplier, they fixed the original Lego price $5 more expensive then the store brand legos. Now Legos sell for $30 a box and Kirkland Legos sell for $25 a box, same exact product, just a few bucks cheaper. Oh and lego couldn't drop the price from 30 to 20 to compete.... That's what Amazon has done. Price fixing and control of the competitors inventory. Damn bastards.

Permit 5y ago
> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?
- bryanrasmussen 5y ago
  It's somewhat similar in books IIRC, if the books don't sell you send back covers of the books and get reimbursed? (based on info from 20 years ago, pretty static industry so probably still the same) on edit: of course book stores don't compete with publishers.
  - moate 5y ago
    Not all industries have buybacks, and many producers won't take on contracts that involve them. (Fun Fact for anyone not familiar with this practice: in publishing the covers were shipped back as the proof because whole books are heavy/costly to ship and take up a lot of space/costly to warehouse so the retailer with them on hand would just have the rest of the book pulped).

Zenst 5y ago

I wonder how this will play out globally as nationwide is just one nation and not Worldwide. Certainly be interesting how this plays out and did have a quick dig too see if the EU is, or has anything in the pipeline, though nothing jumping out. As for my country (UK), I did find this - https://www.gov.uk/government/case-studies/online-sellers-price-fixing-case-study https://www.gov.uk/government/case-studies/online-sellers-pr... So this is a story that will ripple and certainly, thanks to Washington states work, there is a smoking gun. Will Amazon proactively get on top of this Worldwide in other countries will be most telling. But one aspect of companies doing wrong by consumers and respective authorities fining them that always irks me - the consumers who suffered and paid the price never get a slice of those fines. That and fines of large companies has in all effect, become a revenue stream for respective government's with the consumer getting justice in name only and the government's coining it, in effect at the expense of the consumers. Be those consumers of suffered such bad company practices, or future customers who will be paying indirectly for such fines. After all, will they force Amazon to dig in and compensate effected/impacted consumers of such price-fixing? That would be nice. Equally, be nice if Amazon in good faith did the right thing by those impacted. One can but dream and hope.

vincnetas 5y ago

if this "fine" would have been given to me proportionally to my income, i would have to pay 0.33 cents. i see no initiative to stop inventing other creative ways to do business.

netcan 5y ago

Every time I read one of these articles on modern antitrust, I get frustrated by the laws themselves. Win or lose on the case, I don't think they do much. Everything seems to be based on a marginalist theory/formalisation of what monopolies are and how they affect economies. The theory/law seems to target very specific sets of economic dynamics. IRL, monopoly is a more nebulous concept. Size, power, ability to structure the market are often its primary characteristics, not a simple more-profit-less-utility outcome that can be charted with a simple model. Actual antitrust, I think, needs to be more like an industrial policy set than what exists currently. Whatever the outcome of current antitrust actions, the monopolies stay mostly intact and unharmed. What's the point?

HostileGinger 5y ago