On your point re market power, from Amazon’s Antitrust Paradox. > These missteps suggest a failure to appreciate two critical aspects of Amazon’s practices: (1

On your point re market power, from Amazon’s Antitrust Paradox. > These missteps suggest a failure to appreciate two critical aspects of Amazon’s practices: (1) how steep discounting by a firm on a platform-based product creates a higher risk that the firm will generate monopoly power than discounting on non-platform goods and (2) the multiple ways Amazon could recoup losses in ways other than raising the price of the same e-books that it discounted. > On the first point, the government argued that Amazon was not engaging in predation because in the aggregate,Amazon’s e-books business was profitable. This perspective overlooks how heavy losses on particular lines of e-books (bestsellers, for example, or new releases) may have thwarted competition, even if the e-books business as a whole was profitable. That the DOJ chose to define the relevant market as e-books—rather than as specific lines, like bestseller e-books—reflects a deeper mistake: the failure to recognize how the economics of platform-based products differ in crucial ways from non-platform goods. 254 As a result, the DOJ analyzed the e-book market as it would the market for physical books. > One indication of this failure to appreciate the difference between physical books and e-books is that the government and Judge Cote treated Amazon’s below-cost pricing as loss leading,255 rather than as predatory pricing.256 The difference between loss leading and predatory pricing is not spelled out in law, but the distinction turns on the nature of the below-cost pricing, specifically its intensity and the intent motivating it. Judge Cote’s use of “loss leading” revealed a view that “Amazon’s below-cost pricing was (a) selective rather than pervasive, and (b) not intended to generate monopoly power.”257 On this view, Amazon’s aim was to trigger additional sales of other products sold by Amazon, rather than to drive out competing e-book sellers and acquire the power to increase e-book prices.258 In other words, because Amazon’s alleged short-term aim was to sell more e-readers and e-books—rather than to harm its rivals and raise prices—its conduct is considered loss leading rather than predatory pricing. What both the DOJ and the district court missed, however, is the way in which below-cost pricing in this instance entrenched and reinforced Amazon’s dominance in ways that loss leading by physical retailers does not. [1] https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...