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Amazon's financial shell game let it create an "impossible" monopoly

28 points by taylorbuley 3y ago

jasonpeacock 3y ago
Article source from his site (non-Medium): https://pluralistic.net/2024/03/01/managerial-discretion/#junk-fees https://pluralistic.net/2024/03/01/managerial-discretion/#ju...
deleted 3y ago
[deleted]
more_corn 3y ago
Financial shell game sounds like illegal tax avoidance to me.
- lazide 3y ago
  Tax avoidance is perfectly legal. I think you’re looking for the term ‘tax evasion’? Think of it as the difference between ‘avoiding arrest’ (easy to do by following the law!) and ‘evading arrest’ (always illegal).
- anotherhue 3y ago
  It's not illegal if its in the state's interest.
  - fnordpiglet 3y ago
    The law is the law whether it’s beneficial for anyone or not. Many are objectively not beneficial for anyone yet are still the law.
wmeredith 3y ago
There is no shell game–it isn't even that clever. Amazon, Google, Apple, etc., ignore the SEC rules around categorization requirements when reporting revenue. The SEC either doesn't have the will or the agency to enforce its own rules, so nothing is done about it. This has been a thing for decades.
- mamonster 3y ago
  To be honest, I still do not fully understand what the claim is. Amazon has 3 segments: US, Europe and AWS. Its 10-Qs/10-Ks disclose all of the information that is required by US GAAP w.r.t what information should be available for a segment. Is the claim that simply stating "The entirety of what happens on the Amazon website in the US is one segment" is wrong? What subsegments would you want to see?
  - panarky 3y ago
    Cory can't believe that Amazon's non-AWS units combined have such low profit margins. But he never explains how, exactly, decomposing the non-AWS income statement into separate income statements for each non-AWS activity would somehow uncover hidden income. How could it not show that some activities were profitable, others lost money, and the sum matches the aggregate reported in the 10-K?
    - joshribakoff 3y ago
      Perhaps the suggestion is that Amazon’s retail operation is over-billed by the AWS operation… so on paper it looks like AWS is taking in profits that actually wouldn’t exist if not for the retail revenue
      - panarky 3y ago
        How would disaggregating the non-AWS segment into smaller sub-segments show that AWS is inflating intracompany billing?
dakial1 3y ago
Well, there is a reason why the government let monopolies thrive (apart from the classic lobby): It's because that makes their companies global champions, giving them muscle to win abroad. It is actually a good thing that EU is cracking on those. I just wish it was faster and that other regions/countries would join forces and do the same. Leave those companies to exploit just the US.

28 points by taylorbuley 3y ago

Article source from his site (non-Medium): https://pluralistic.net/2024/03/01/managerial-discretion/#junk-fees https://pluralistic.net/2024/03/01/managerial-discretion/#ju...

deleted 3y ago

[deleted]

more_corn 3y ago

Financial shell game sounds like illegal tax avoidance to me.

lazide 3y ago
Tax avoidance is perfectly legal. I think you’re looking for the term ‘tax evasion’? Think of it as the difference between ‘avoiding arrest’ (easy to do by following the law!) and ‘evading arrest’ (always illegal).
anotherhue 3y ago
It's not illegal if its in the state's interest.
- fnordpiglet 3y ago
  The law is the law whether it’s beneficial for anyone or not. Many are objectively not beneficial for anyone yet are still the law.

wmeredith 3y ago

There is no shell game–it isn't even that clever. Amazon, Google, Apple, etc., ignore the SEC rules around categorization requirements when reporting revenue. The SEC either doesn't have the will or the agency to enforce its own rules, so nothing is done about it. This has been a thing for decades.

mamonster 3y ago
To be honest, I still do not fully understand what the claim is. Amazon has 3 segments: US, Europe and AWS. Its 10-Qs/10-Ks disclose all of the information that is required by US GAAP w.r.t what information should be available for a segment. Is the claim that simply stating "The entirety of what happens on the Amazon website in the US is one segment" is wrong? What subsegments would you want to see?
- panarky 3y ago
  Cory can't believe that Amazon's non-AWS units combined have such low profit margins. But he never explains how, exactly, decomposing the non-AWS income statement into separate income statements for each non-AWS activity would somehow uncover hidden income. How could it not show that some activities were profitable, others lost money, and the sum matches the aggregate reported in the 10-K?
  - joshribakoff 3y ago
    Perhaps the suggestion is that Amazon’s retail operation is over-billed by the AWS operation… so on paper it looks like AWS is taking in profits that actually wouldn’t exist if not for the retail revenue
    - panarky 3y ago
      How would disaggregating the non-AWS segment into smaller sub-segments show that AWS is inflating intracompany billing?

dakial1 3y ago

Well, there is a reason why the government let monopolies thrive (apart from the classic lobby): It's because that makes their companies global champions, giving them muscle to win abroad. It is actually a good thing that EU is cracking on those. I just wish it was faster and that other regions/countries would join forces and do the same. Leave those companies to exploit just the US.