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>> In instances where competitors didn’t raise their prices to Amazon’s level, the algorithm—which is no longer in use—automatically returned the item to its no

>> In instances where competitors didn’t raise their prices to Amazon’s level, the algorithm—which is no longer in use—automatically returned the item to its normal price point. This is a form of automated collusion. I'll raise my price and if my competitors don't follow suit I will lower it again. It only works well for them if the competitors are watching prices too and looking for an opportunity to raise theirs. You know it's anti-consumer because of the conditional reversion after watching competitors prices not following. I have a feeling there is currently a LOT of this going on across all industries in the US. We've seen it rent pricing software, now Amazon, and I think fast food and restaurants are dojng something similar. Food has gotten obscenely expensive expensive outside a grocery store.

beambot 3y ago
"Price matching" is standard practice in virtually every major retailer...
- losteric 3y ago
  Price matching refers to lowering prices. That's legal, up to the point of predatory pricing. Raising prices then checking if so-called "competitors" follow is the illegal part - that's automated collusion, definitively illegal. There is grey area around intent/motive, but the OP article is clearly on the bad side. (Also, "standard practice" doesn't mean legal or moral)
  - granzymes 3y ago
    >Raising prices then checking if so-called "competitors" follow is the illegal part - that's automated collusion, definitively illegal. This is completely false. Collusion, legally, requires an agreement between competitors. Tacit collusion is *not* illegal, see Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp. (1993). Amazon can raise and lower their prices all day, algorithmically or not, as long as they aren't calling up their competitors and telling them to raise their prices too.
scarface_74 3y ago
Do you think two neighborhood convenience stores are also automatically colluding when they look across the street from one another and raise and low gas prices to match?
- defrost 3y ago
  That entirely depends on the stores and their ownership. It is not unkown for 'competitors' to stage cost cutting dramas and pantomine competitive pricing in order to create artifical demand and customer loyalty to either or both scrappy underdogs.

beambot 3y ago

"Price matching" is standard practice in virtually every major retailer...

losteric 3y ago
Price matching refers to lowering prices. That's legal, up to the point of predatory pricing. Raising prices then checking if so-called "competitors" follow is the illegal part - that's automated collusion, definitively illegal. There is grey area around intent/motive, but the OP article is clearly on the bad side. (Also, "standard practice" doesn't mean legal or moral)
- granzymes 3y ago
  >Raising prices then checking if so-called "competitors" follow is the illegal part - that's automated collusion, definitively illegal. This is completely false. Collusion, legally, requires an agreement between competitors. Tacit collusion is *not* illegal, see Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp. (1993). Amazon can raise and lower their prices all day, algorithmically or not, as long as they aren't calling up their competitors and telling them to raise their prices too.

scarface_74 3y ago

Do you think two neighborhood convenience stores are also automatically colluding when they look across the street from one another and raise and low gas prices to match?

defrost 3y ago
That entirely depends on the stores and their ownership. It is not unkown for 'competitors' to stage cost cutting dramas and pantomine competitive pricing in order to create artifical demand and customer loyalty to either or both scrappy underdogs.