5 ms·

Here are some possibilities (not claiming these are practical or a solution): The first is splitting Amazon-retail from their other products (Alexa, Ring, AWS,

by ezfe 3y ago

Here are some possibilities (not claiming these are practical or a solution): The first is splitting Amazon-retail from their other products (Alexa, Ring, AWS, etc.) The second is splitting Amazon-logistics out. I'm not exactly sure how this would work, but it could be argued that Amazon logistics could operate standalone.

Cerium 3y ago
FBA as a separate business would be interesting for sure. It would separate out the value of Amazon marketplace from the value of outsourcing your order fulfillment logistics.
- joeframbach 3y ago
  All I ever wanted was to be able to search "shipped and sold by Amazon" results only. If this is the heavy hammer needed to get to that end result, so be it.
NoMoreNicksLeft 3y ago
The first one seems obtuse. If here were some 1960s-style comglomerate that sold shower curtains and offered professional bowling ball waxing, with a 95% monopoly in both... Why would splitting it out into two monopolies improve anything? Even if there are some unknown, misunderstood synergies between the two businesses, will they not just collude in that way that bridge players do, without any overt actions that could be punished?
- thfuran 3y ago
  >will they not just collude in that way that bridge players do, without any overt actions that could be punished? Currently, they get that for free by virtue of being the same company. If they were separate companies, it would require actual collusion and may, depending on the specifics, be illegal. It's also be less likely to occur since they'd need some motivation to do so. Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
  - NoMoreNicksLeft 3y ago
    > If they were separate companies, it would require actual collusion a I don't play bridge, never learned. A game consists of two teams of two players each. My vague understanding is that you might win if a partner gets ahold of a card that you discard, but that you can't know what card that is without saying so (cheating). Good players can tell what cards their partners might need, and discard anyway. This isn't cheating, it's just good play. In a court of law, the former is definitely some violation of antitrust law. But the latter is just good business. And even if it weren't, no overt acts have been committed that could lead to successful prosecutorial outcomes. Philosophically, it may still be collusion. Good luck doing anything about it. > It's also be less likely to occur since they'd need some motivation to do so. Game theory supplies that just fine. If I have a monopoly in A, and you a monopoly in B, then I might just protect your monopoly in B without you requesting that, without you giving me instructions. And from that point on, if you see a place where you can hurt or help me, you might choose to help without me requesting it or asking. Because if my monopoly on A is hurt... I can no longer afford to help you without you asking. Supporting me is a no-brainer. At least if the other party isn't a complete imbecile, they can see it. While there's no accounting for stupidity (second most powerful force after compound interest), we can already assume that the leadership of these companies is non-stupid just because of the success they've already achieved. > Why would the shower curtain company even attempt to collude with the bowling ball waxing business? When they break these companies up, they don't fire 100% of management and rehire. Most of them know each other. Most are friendly with each other, if not friends. Sure, employee attrition will eventually break those bonds ten years down the road. But they already know how each other thinks. Silent collusion, without so much as a wink or a nod, is definitely within the realm of possibility. The previously existing social connections are present. Their goals were largely aligned before, and nothing has occurred to de-align them. Mutual success may be easier than individual success. A sort of "corporate altruism" can emerge. Evolution does this shit all the time with symbiotes. It's not like their colluding to co-evolve with each other. You won't find conspiracy evidence in the fossil record that they just started helping each other, it only proved to be a better strategy than individuality, and so they went with it.
    - thfuran 3y ago
- tonyedgecombe 3y ago
  It would stop cross subsidy. I’m sure I read that the distribution side of the business gets AWS services at cost.
timmaxw 3y ago
The latter seems plausible to me, but the former makes no sense. If the problem is that Amazon-retail has too much market power, how would splitting off AWS help with that problem? Amazon-retail would still have the same fraction of the retail market as before.
- scarface_74 3y ago
  Exactly, people here who shout “break them up”, don’t put an ounce of thought into it.
- burkaman 3y ago
  Splitting off AWS wouldn't be enough on its own, but I think the argument would be that Amazon makes a substantial amount of its operating income from AWS (70% in the latest quarter: https://ir.aboutamazon.com/news-release/news-release-details/2023/Amazon.com-Announces-Second-Quarter-Results/ https://ir.aboutamazon.com/news-release/news-release-details...), which allows it to fund anti-competitive marketplace practices like undercutting competitors at a loss to force them out of business. It would be more difficult to sustain such practices without AWS income.

by ezfe 3y ago

Cerium 3y ago

FBA as a separate business would be interesting for sure. It would separate out the value of Amazon marketplace from the value of outsourcing your order fulfillment logistics.

joeframbach 3y ago
All I ever wanted was to be able to search "shipped and sold by Amazon" results only. If this is the heavy hammer needed to get to that end result, so be it.

NoMoreNicksLeft 3y ago

The first one seems obtuse. If here were some 1960s-style comglomerate that sold shower curtains and offered professional bowling ball waxing, with a 95% monopoly in both... Why would splitting it out into two monopolies improve anything? Even if there are some unknown, misunderstood synergies between the two businesses, will they not just collude in that way that bridge players do, without any overt actions that could be punished?

thfuran 3y ago
>will they not just collude in that way that bridge players do, without any overt actions that could be punished? Currently, they get that for free by virtue of being the same company. If they were separate companies, it would require actual collusion and may, depending on the specifics, be illegal. It's also be less likely to occur since they'd need some motivation to do so. Why would the shower curtain company even attempt to collude with the bowling ball waxing business?
- NoMoreNicksLeft 3y ago
  > If they were separate companies, it would require actual collusion a I don't play bridge, never learned. A game consists of two teams of two players each. My vague understanding is that you might win if a partner gets ahold of a card that you discard, but that you can't know what card that is without saying so (cheating). Good players can tell what cards their partners might need, and discard anyway. This isn't cheating, it's just good play. In a court of law, the former is definitely some violation of antitrust law. But the latter is just good business. And even if it weren't, no overt acts have been committed that could lead to successful prosecutorial outcomes. Philosophically, it may still be collusion. Good luck doing anything about it. > It's also be less likely to occur since they'd need some motivation to do so. Game theory supplies that just fine. If I have a monopoly in A, and you a monopoly in B, then I might just protect your monopoly in B without you requesting that, without you giving me instructions. And from that point on, if you see a place where you can hurt or help me, you might choose to help without me requesting it or asking. Because if my monopoly on A is hurt... I can no longer afford to help you without you asking. Supporting me is a no-brainer. At least if the other party isn't a complete imbecile, they can see it. While there's no accounting for stupidity (second most powerful force after compound interest), we can already assume that the leadership of these companies is non-stupid just because of the success they've already achieved. > Why would the shower curtain company even attempt to collude with the bowling ball waxing business? When they break these companies up, they don't fire 100% of management and rehire. Most of them know each other. Most are friendly with each other, if not friends. Sure, employee attrition will eventually break those bonds ten years down the road. But they already know how each other thinks. Silent collusion, without so much as a wink or a nod, is definitely within the realm of possibility. The previously existing social connections are present. Their goals were largely aligned before, and nothing has occurred to de-align them. Mutual success may be easier than individual success. A sort of "corporate altruism" can emerge. Evolution does this shit all the time with symbiotes. It's not like their colluding to co-evolve with each other. You won't find conspiracy evidence in the fossil record that they just started helping each other, it only proved to be a better strategy than individuality, and so they went with it.
  - thfuran 3y ago
tonyedgecombe 3y ago
It would stop cross subsidy. I’m sure I read that the distribution side of the business gets AWS services at cost.

timmaxw 3y ago

The latter seems plausible to me, but the former makes no sense. If the problem is that Amazon-retail has too much market power, how would splitting off AWS help with that problem? Amazon-retail would still have the same fraction of the retail market as before.

scarface_74 3y ago
Exactly, people here who shout “break them up”, don’t put an ounce of thought into it.
burkaman 3y ago
Splitting off AWS wouldn't be enough on its own, but I think the argument would be that Amazon makes a substantial amount of its operating income from AWS (70% in the latest quarter: https://ir.aboutamazon.com/news-release/news-release-details/2023/Amazon.com-Announces-Second-Quarter-Results/ https://ir.aboutamazon.com/news-release/news-release-details...), which allows it to fund anti-competitive marketplace practices like undercutting competitors at a loss to force them out of business. It would be more difficult to sustain such practices without AWS income.