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Most things aren't bought on Amazon, but if you're a middleman droppshipping stuff from China, Amazon is an easy way to get in front of a lot of eyeballs. It's

Most things aren't bought on Amazon, but if you're a middleman droppshipping stuff from China, Amazon is an easy way to get in front of a lot of eyeballs. It's not clear to me why droppshippers deserve special care and treatment by the FTC.

chongli 3y ago
The chair of the FTC is Lina Khan. As a law student, she wrote this article [1] for the Yale Law Journal. It attracted so much attention in the antitrust law community that it led to her becoming the youngest FTC chair in history. She has literally been building this case against Amazon since she was a student. It’s not just about dropshippers. It’s also about how Amazon uses automated price controls, guided by scraping of competitors, to engage in dumping [2] and predatory pricing [3] to wipe out competing e-commerce sites. Since everything is automated, prices can change in a matter of seconds, so once competitors are destroyed, prices go back up automatically. [1] https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p... [2] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)?wprov=sfti1 https://en.wikipedia.org/wiki/Dumping_(pricing_policy)?wprov... [3] https://en.wikipedia.org/wiki/Predatory_pricing?wprov=sfti1 https://en.wikipedia.org/wiki/Predatory_pricing?wprov=sfti1
- intended 3y ago
  Nice! I remember her argument regarding Amazon. From what I recall, the reason why her argument was recognized is because it solved a thorny problem of US anti trust law, proving harm. Currently, in the US what matters is showing that consumer welfare was harmed. AINAL but proving harm is not easy - Amazon in particular reduces prices to the end customer, increases choices and makes sales easier. This is where most arguments died, however her approach had enough merit to pursue. However, it seems her approach and argument has changed, and is more couched in terms of current legalese - more focused on showing consumer harm than applying a new legal approach.
- hellojesus 3y ago
  > Since everything is automated, prices can change in a matter of seconds, so once competitors are destroyed, prices go back up automatically. How is this different than a grim reaper strategy taught in econ 101?

chongli 3y ago

The chair of the FTC is Lina Khan. As a law student, she wrote this article [1] for the Yale Law Journal. It attracted so much attention in the antitrust law community that it led to her becoming the youngest FTC chair in history. She has literally been building this case against Amazon since she was a student. It’s not just about dropshippers. It’s also about how Amazon uses automated price controls, guided by scraping of competitors, to engage in dumping [2] and predatory pricing [3] to wipe out competing e-commerce sites. Since everything is automated, prices can change in a matter of seconds, so once competitors are destroyed, prices go back up automatically. [1] https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p... [2] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)?wprov=sfti1 https://en.wikipedia.org/wiki/Dumping_(pricing_policy)?wprov... [3] https://en.wikipedia.org/wiki/Predatory_pricing?wprov=sfti1 https://en.wikipedia.org/wiki/Predatory_pricing?wprov=sfti1

intended 3y ago
Nice! I remember her argument regarding Amazon. From what I recall, the reason why her argument was recognized is because it solved a thorny problem of US anti trust law, proving harm. Currently, in the US what matters is showing that consumer welfare was harmed. AINAL but proving harm is not easy - Amazon in particular reduces prices to the end customer, increases choices and makes sales easier. This is where most arguments died, however her approach had enough merit to pursue. However, it seems her approach and argument has changed, and is more couched in terms of current legalese - more focused on showing consumer harm than applying a new legal approach.
hellojesus 3y ago
> Since everything is automated, prices can change in a matter of seconds, so once competitors are destroyed, prices go back up automatically. How is this different than a grim reaper strategy taught in econ 101?