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The current FTC chair wrote the book essay on Amazon's monopolistic business practices (1) and has spoken so much about it that the only reason we'd see the

by duped 3y ago

The current FTC chair wrote the ~~book~~ essay on Amazon's monopolistic business practices (1) and has spoken so much about it that the only reason we'd see the government take their foot off the gas here is if Amazon's lawyers can claim that her previous advocacy biases the case against them. (1) https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...

Justsignedup 3y ago
I can only but hope that she can do this, if anyone can I think she can.
nerdponx 3y ago
Apparently there are calls for her recusal on the grounds that she held a critical stance before her current appointment. Which is an odd thing to ask for in my opinion, but I guess it's worth trying if you're on the losing end of this.
- duped 3y ago
  They want to muddy the waters by arguing the FTC is impartial towards Amazon. But the problem with that argument is that it's not the job of the FTC to be impartial. Their mandate is to protect competition and consumers, which is naturally impartial to individual companies.
  - BHSPitMonkey 3y ago
    I think you meant the opposite of impartial towards, i.e. biased against.
- BHSPitMonkey 3y ago
  It's like the GOP currently trying to impeach a newly-elected judge in Wisconsin because she previously described the state's maps as gerrymandered, ergo she will not be able to rule fairly on the matter when it comes before the court. Obviously both examples are cynical and disingenuous, since the implication is that the only person qualified to do a job "fairly" is someone who has never thought about the relevant subject matter at any point in time.
CPLX 3y ago
Advocating for a position and then using the strength of your arguments to be placed in a position of public authority through a democratic process is anything but fundamentally legitimate in a way no business will ever be. Amusing trying to see people claiming the opposite.
- duped 3y ago
  Well there is actually an interesting political side to this, where the Biden administration set up the strongest anti-trust FTC in two generations by pulling a bait and switch on the Senate. They essentially made zero indication she would be tapped to chair the commission until after she was confirmed, which is when the tech lobby and their allies in Congress started making noise that she couldn't be impartial. It was a galaxy brain political move early in the administration and a direct reason why we're seeing these antitrust cases prosecuted.
_2d30 3y ago
I’d encourage everyone to read at least the abstract of this link and then consider the case the FTC is trying to bring to see if they notice anything odd! HINT: there is something very odd about the two taken together.
- Centigonal 3y ago
  I read both - I don't see anything odd here. Seems like like the thesis of the FTC's case includes the natural continuation of some of Lina Khan's ideas, plus additional focus on the Amazon Seller economiy.
  - _2d30 3y ago
    The abstract of the link is that Amazon’s monopoly power has manifested itself in _under_ pricing products. The FTC claim is that Amazon _over_ prices products. They are in direct opposition.
    - ajkjk 3y ago
      That's such a weak argument. Suppose Amazon does both, at different times (which they do); do you think they should cancel out and therefore not get in trouble?
      - yccs27 3y ago
        Exactly, strategically underpricing certain products at specific times allows them to lower competition and charge higher prices on average.
    - Centigonal 3y ago
      I see how that would appear to be a contradiction. However, your takeaway from the Yale Law Journal link is incomplete. The Yale article argues that Amazon has avoided anti-trust scrutiny because most anti-trust regulators are laser-focused on price and output (is Amazon fixing artificially high prices? Is Amazon artificially limiting output?), and this approach misses the ways in which Amazon limits competition (mainly predatory under-pricing and vertical integration). The article goes on to suggest that by ignoring these, antitrust regulators are "overlooking the structural weakening of competition until it becomes difficult to address effectively, an approach that undermines consumer welfare." You're right that the article does talk about practices that aren't mentioned in the complaint, like predatory under-pricing. However, it also discusses the ways in which Amazon uses vertical integration to create barriers and reduce competition. Here I quote from the article: >Amazon is positioned to use its dominance across online retail and delivery in ways that involve tying, are exclusionary, and create entry barriers. That is, Amazon’s distortion of the delivery sector in turn creates anticompetitive challenges in the retail sector. For example, sellers who use FBA have a better chance of being listed higher in Amazon search results than those who do not, which means Amazon is tying the outcomes it generates for sellers using its retail platform to whether they also use its delivery business. Amazon is also positioned to use its logistics infrastructure to deliver its own retail goods faster than those of independent sellers that use its platform and fulfillment service—a form of discrimination that exemplifies traditional concerns about vertical integration. >The clearest example of how the company leverages its power across online businesses is Amazon Marketplace, where third-party retailers sell their wares. Since Amazon commands a large share of e-commerce traffic, many smaller merchants find it necessary to use its site to draw buyers.These sellers list their goods on Amazon’s platform and the company collects fees ranging from 6% to 50% of their sales from them. These quotes map pretty cleanly onto two of the complaint's allegations: >Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon. >Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon. At the end of the day, Amazon is a very big company that does a lot of different things at the same time. It could be under-pricing ebooks and overcharging FBA sellers at the same time. The point of the Yale Law School article is that anti-trust law ignores anti-competitive practices until they significantly distort prices across the company's largest market, but that these practices have a chilling effect on competition far before that point. Khan argues that anti-trust regulators should go after companies using these practices before they cement market leadership and fully edge out competitors. >On the Chicago School’s [(the pre-existing paradigm's)] account, Amazon’s vertical integration would only be harmful if and when it chooses to use its dominance in delivery and retail to hike fees to consumers. Amazon has already raised Prime prices. But antitrust enforcers should be equally concerned about the fact that Amazon increasingly controls the infrastructure of online commerce—and the ways in which it is harnessing this dominance to expand and advantage its new business ventures. This is exactly what Khan's FTC is doing now.
deelowe 3y ago
What's to stop her from being replaced next election before this comes to fruition?
sah2ed 3y ago
> https://www.yalelawjournal.org/note/amazons-antitrust-parado https://www.yalelawjournal.org/note/amazons-antitrust-parado... The article has been discussed around here before: https://news.ycombinator.com/item?id=20079699 https://news.ycombinator.com/item?id=20079699 (2019) https://news.ycombinator.com/item?id=13562968 https://news.ycombinator.com/item?id=13562968 (2017)
s3p 3y ago
There are 17 state AGs joining the FTC in the suit so I doubt Amazon will have any headway even if they got the Chair to be removed. Hoping the best for the lawsuit, though.

The current FTC chair wrote the ~~book~~ essay on Amazon's monopolistic business practices (1) and has spoken so much about it that the only reason we'd see the

by duped 3y ago

Justsignedup 3y ago

I can only but hope that she can do this, if anyone can I think she can.

nerdponx 3y ago

Apparently there are calls for her recusal on the grounds that she held a critical stance before her current appointment. Which is an odd thing to ask for in my opinion, but I guess it's worth trying if you're on the losing end of this.

duped 3y ago
They want to muddy the waters by arguing the FTC is impartial towards Amazon. But the problem with that argument is that it's not the job of the FTC to be impartial. Their mandate is to protect competition and consumers, which is naturally impartial to individual companies.
- BHSPitMonkey 3y ago
  I think you meant the opposite of impartial towards, i.e. biased against.
BHSPitMonkey 3y ago
It's like the GOP currently trying to impeach a newly-elected judge in Wisconsin because she previously described the state's maps as gerrymandered, ergo she will not be able to rule fairly on the matter when it comes before the court. Obviously both examples are cynical and disingenuous, since the implication is that the only person qualified to do a job "fairly" is someone who has never thought about the relevant subject matter at any point in time.

CPLX 3y ago

Advocating for a position and then using the strength of your arguments to be placed in a position of public authority through a democratic process is anything but fundamentally legitimate in a way no business will ever be. Amusing trying to see people claiming the opposite.

duped 3y ago
Well there is actually an interesting political side to this, where the Biden administration set up the strongest anti-trust FTC in two generations by pulling a bait and switch on the Senate. They essentially made zero indication she would be tapped to chair the commission until after she was confirmed, which is when the tech lobby and their allies in Congress started making noise that she couldn't be impartial. It was a galaxy brain political move early in the administration and a direct reason why we're seeing these antitrust cases prosecuted.

_2d30 3y ago

I’d encourage everyone to read at least the abstract of this link and then consider the case the FTC is trying to bring to see if they notice anything odd! HINT: there is something very odd about the two taken together.

Centigonal 3y ago
I read both - I don't see anything odd here. Seems like like the thesis of the FTC's case includes the natural continuation of some of Lina Khan's ideas, plus additional focus on the Amazon Seller economiy.
- _2d30 3y ago
  The abstract of the link is that Amazon’s monopoly power has manifested itself in _under_ pricing products. The FTC claim is that Amazon _over_ prices products. They are in direct opposition.
  - ajkjk 3y ago
    That's such a weak argument. Suppose Amazon does both, at different times (which they do); do you think they should cancel out and therefore not get in trouble?
    - yccs27 3y ago
      Exactly, strategically underpricing certain products at specific times allows them to lower competition and charge higher prices on average.
  - Centigonal 3y ago
    I see how that would appear to be a contradiction. However, your takeaway from the Yale Law Journal link is incomplete. The Yale article argues that Amazon has avoided anti-trust scrutiny because most anti-trust regulators are laser-focused on price and output (is Amazon fixing artificially high prices? Is Amazon artificially limiting output?), and this approach misses the ways in which Amazon limits competition (mainly predatory under-pricing and vertical integration). The article goes on to suggest that by ignoring these, antitrust regulators are "overlooking the structural weakening of competition until it becomes difficult to address effectively, an approach that undermines consumer welfare." You're right that the article does talk about practices that aren't mentioned in the complaint, like predatory under-pricing. However, it also discusses the ways in which Amazon uses vertical integration to create barriers and reduce competition. Here I quote from the article: >Amazon is positioned to use its dominance across online retail and delivery in ways that involve tying, are exclusionary, and create entry barriers. That is, Amazon’s distortion of the delivery sector in turn creates anticompetitive challenges in the retail sector. For example, sellers who use FBA have a better chance of being listed higher in Amazon search results than those who do not, which means Amazon is tying the outcomes it generates for sellers using its retail platform to whether they also use its delivery business. Amazon is also positioned to use its logistics infrastructure to deliver its own retail goods faster than those of independent sellers that use its platform and fulfillment service—a form of discrimination that exemplifies traditional concerns about vertical integration. >The clearest example of how the company leverages its power across online businesses is Amazon Marketplace, where third-party retailers sell their wares. Since Amazon commands a large share of e-commerce traffic, many smaller merchants find it necessary to use its site to draw buyers.These sellers list their goods on Amazon’s platform and the company collects fees ranging from 6% to 50% of their sales from them. These quotes map pretty cleanly onto two of the complaint's allegations: >Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon. >Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon. At the end of the day, Amazon is a very big company that does a lot of different things at the same time. It could be under-pricing ebooks and overcharging FBA sellers at the same time. The point of the Yale Law School article is that anti-trust law ignores anti-competitive practices until they significantly distort prices across the company's largest market, but that these practices have a chilling effect on competition far before that point. Khan argues that anti-trust regulators should go after companies using these practices before they cement market leadership and fully edge out competitors. >On the Chicago School’s [(the pre-existing paradigm's)] account, Amazon’s vertical integration would only be harmful if and when it chooses to use its dominance in delivery and retail to hike fees to consumers. Amazon has already raised Prime prices. But antitrust enforcers should be equally concerned about the fact that Amazon increasingly controls the infrastructure of online commerce—and the ways in which it is harnessing this dominance to expand and advantage its new business ventures. This is exactly what Khan's FTC is doing now.

deelowe 3y ago

What's to stop her from being replaced next election before this comes to fruition?

sah2ed 3y ago

> https://www.yalelawjournal.org/note/amazons-antitrust-parado https://www.yalelawjournal.org/note/amazons-antitrust-parado... The article has been discussed around here before: https://news.ycombinator.com/item?id=20079699 https://news.ycombinator.com/item?id=20079699 (2019) https://news.ycombinator.com/item?id=13562968 https://news.ycombinator.com/item?id=13562968 (2017)

s3p 3y ago

There are 17 state AGs joining the FTC in the suit so I doubt Amazon will have any headway even if they got the Chair to be removed. Hoping the best for the lawsuit, though.