9 ms·

New unsealed records reveal Amazon's price-fixing tactics, California AG claims

274 points by kmfrk 6mo ago

worik 6mo ago
Unsurprising Did Amazon think they were too big to convict? I wonder if they will meet the fate of Standard Oil, back in the day.
- fmajid 6mo ago
  No, Antitrust law was effectively neutered by the Chicago School and their agent Robert Bork. https://www.theamericanconservative.com/robert-borks-america/ https://www.theamericanconservative.com/robert-borks-america... (BTW that source is right-wing and can hardly be said to be biased against Bork).
  - vondur 6mo ago
    That's fascinating. Bork was denied being on the supreme court but his ideas shaped current antitrust laws. It feels a bit like the old Standard Oil argument: It's ok to have a huge market share so long as pricing for goods gets cheaper even if it hurts competition overall. *edited* for grammar.
    - blackjack_ 6mo ago
      Yeah. Heather Cox Richardson was arguing about this today, saying that historically the job of the government was to decide that cheaper but gutting a local economy, or cheaper but taking enough market share to be able to heavily raise prices in the future was bad. But due to Bork that capacity of the government to actually help drive good outcomes for the bulk of the population has been gutted.
      - pas 6mo ago
        local small business should offer local specialty, if it's doing the exact same thing as the big business but with higher overhead, then why not find something much more productive for the folks there? small local economies that are stagnating already for decades are not great for anyone. people who live there are struggling, no upward mobility, anyone a bit more successful leaves, the usual urban rural polarization intensifies, yadda yadda. obviously one of the big drivers of this is the completely fucked up housing policy. (which itself is driven by public safety and public transit issues.) education is a close second. then the return to office mandates. the all the discontinuities and disincentives of the braindead wrong implementation of welfare (and other social support/payments). the real economy deadweight loss is easily 2-3% of GDP (per year of course)
    - fmajid 6mo ago
      Remember, Bork was the third guy who supinely did Nixon's bidding when Attornet-General and his deputy resigned rather than fire the special prosecutor investigating Watergate.
trollbridge 6mo ago
Amazon would be smart to settle with no admission of wrongdoing and an agreement to seal documents lest every other state end up following suit.
- ikidd 6mo ago
  The documents can be subpoenaed for a new proceeding from the source.
fmajid 6mo ago
[flagged]
- add-sub-mul-div 6mo ago
  [flagged]
  - decremental 6mo ago
    [dead]
- 113 6mo ago
  Seems like that's just for protesters.
  - NewJazz 6mo ago
    [flagged]
    - smallmancontrov 6mo ago
      [flagged]
- cucumber3732842 6mo ago
  That would be like showing up for the battle of Kursk with an M18 battalion. Might go well at first, you might score some big flashy wins, but....ugh... things are gonna get worse as the party goes on and it's generally an ill advised strategy. Rico as written and enforced walks right up to the limit of constitutionality in a dozen ways. It's built for speed. It's never really been thrown into a knock down drag out legal action between titans on equal footing (i.e. a bigco legal team, potentially helped by other bigcos). It might survive nominally but it probably won't come out the other end in serviceable condition. You might win a few but eventually an appeal will find its target and end your day. I say go for it. Heads I win. Tails you get RICO reform.
  - 6mo ago
lelandfe 6mo ago
If you've ever seen those "Click To Reveal Price" or "Price Only Revealed At Checkout" products online, this here is one reason why. They help businesses keep discounted prices hidden from Amazon's crawlers.
- fg137 6mo ago
  Is it effective, like, at all?
  - 14 6mo ago
    I know myself as well as others in my family have talked about this many times and have a hard rule that if someone has to hide the price they are ashamed of it and we refuse to support them. I literally experienced this tonight. I've been wanting to try some SnackCrates the service where you get snacks from around the world delivered monthly or just a single box if you want. Well the Company SnackCrate stopped shipping to Canada so been looking for another company that does. I see an ad on Facebook and check it out. First looked if they deliver to Canada before anything else. Then try find a price and you can't. Looked all over their site with nothing that even hints at the cost. They want you to first do a snack test to determine good snacks you may like then provide information and so on. Then you can see pricing options. I refuse to do that. Instantly left the site and read the comments on Facebook where I then saw several comments state how expensive they were for such little abouts of snack which made me say yep they are ashamed of the price and that's why they hide it.
- ggreer 6mo ago
  This can also be true if the manufacturer of the product requires that retailers not offer a price below a certain amount. This is called the minimum advertised price (MAP) and is common for big brands like Apple. Another way to get around the minimum advertised price is to bundle the product with some other product or service, such as is done with cell phone contracts.
- xnx 6mo ago
  Blame the manufacturer for this, not the reseller.
SilverElfin 6mo ago
We need all new antitrust laws. The size of these companies is itself a problem. They have so much power that there is no possibility for fair competition. Maybe we can start by taxing companies that are worth more than 1 trillion at an extremely high rate.
- foobarian 6mo ago
  I wonder who would prosecute them. What about an AG who, when confronted about doing a bad job, deflects by pointing out that Nasdaq is "smashing records?"
  - cogman10 6mo ago
    I'd be in favor of giving Lina Khan a lifetime appointment to heading the FTC along with 10x their current budget to tackle exactly this problem. A major part of the problem isn't even that we don't have laws on the books, it's that funding to the enforcement agencies has been gutted to the point where they can mostly just go after extreme egregious violations or very easy to win cases. The IRS is in exactly the same boat.
    - SilverElfin 6mo ago
      That would be great, but I think even her job needs new laws. Otherwise, one of the problems is even hardcore enforcement takes years and huge amounts of taxpayer expense. We need to make it simple, cheap, and quick to improve competition.
      - cogman10 6mo ago
        I don't disagree. I think she's about the perfect person to be involved in writing those new laws in some fashion.
  - hoppyhoppy2 6mo ago
    She's not the AG anymore, though I'm not claiming that Todd Blanche is better.
deleted 6mo ago
[deleted]
ggreer 6mo ago
It's odd that this is a request for a preliminary injunction considering that the case is almost four years old. Both the 2022 and the new filing are heavily censored[1][2], so I can't know for sure, but I didn't notice any revelation in the latest filing. Amazon requires that anyone selling through their platform not offer lower prices elsewhere online. If a seller does so, they'll be relegated to the "New & pre-owned" offers section below the "Add to cart" & "Buy it now" buttons. This has been the case since at least 2019. (This also means that if you're shopping on Amazon and want a better deal, you should check the other offers section for a cheaper price.) Lots of retailers (both physical & online) have similar requirements, and many manufacturers have similar requirements for minimum advertised prices (such as Apple). I think the California AG's plan is to argue that the pricing rules combined with Amazon's large market share merit a judgement against them, but it's going to be an uphill battle to single out one company for practices that are common to the industry. 1. https://oag.ca.gov/system/files/attachments/press-docs/2022-09-14%20Redacted-California%20v.%20Amazon%20Complaint.pdf https://oag.ca.gov/system/files/attachments/press-docs/2022-... 2. https://oag.ca.gov/system/files/attachments/press-docs/REDACTED%20Memorandum%20of%20Points%20and%20Authorities%20ISO%20MPI.pdf https://oag.ca.gov/system/files/attachments/press-docs/REDAC...
- thayne 6mo ago
  > Lots of retailers (both physical & online) have similar requirements My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary. > many manufacturers have similar requirements That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.
  - Ferret7446 6mo ago
    Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?
reenorap 6mo ago
How is this not a complete violation of anti-trust laws? If the federal government won't pursue it (questionable in this environment), surely there's more than enough to go after it state-by-state. And can't we do a class-action lawsuit against Amazon at this point?
- dmix 6mo ago
  You're replying to an article about an anti trust investigation into Amazon that is currently in pre-trial preliminary stages. Which is why the article is talking about information they discovered during the course of it.
jmyeet 6mo ago
The entire use case of dynamic pricing is to raise prices. Airlines were really the first to do this but there it kinda makes sense. You have a plane. It's going anyway. You want to fill it. At the other extreme is RealPage, which is explicitly designed to raise rents and it's used by enough people that you can view it as the last frontier of anti-trust, anticompetitive behavior and price-fixing. It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it. That's another aspect to this: collusion doesn't happen in dark smoke-filled rooms anymore. It can be as simple as all "competitors" simply using the same software, which tells them all to do the same thing. Another commenter had it right: this is beyond antitrust or competition law. It's a RICO issue. There's no real structural reason for inflation since the pandemic. The pandemic simply broke the seal on raising prices and now everybody is in on it.
- parineum 6mo ago
  > It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it. Explain "violence", please.
LorenPechtel 6mo ago
And what's really stupid about this is that done openly there probably wouldn't be an issue. Insurance companies can demand providers charge them the lowest rate they charge anyone. Would there have been any issue if Amazon had simply said that to get those features you must match any deals you give anyone else?
- snovv_crash 6mo ago
  Selling to a reseller at the same price isn't an issue. The problem is disallowing selling direct to customer at a lower price. It means if someone makes another online marketplace, let's call it Ganjes, then if they have lower overheads they can't sell for less than Amazon does. Similar for DTC from the manufacturer.
- gnopgnip 6mo ago
  Amazon isn’t doing this to benefit customers. A seller/store with an item priced at $100 and selling at a discount on their own site would be pushed off the buy box and customers could see the item for sale for $120 from another seller.
refurb 6mo ago
If Amazon punishes sellers for having lower prices elsewhere, isn’t it the sellers choice whether to lower their price on Amazon OR raise their price for other sellers? I didn’t see anything in the article suggesting Amazon ask for the 2nd option, just examples of sellers who did the 2nd one.
- avidiax 6mo ago
  You are correct that the merchants have that choice. Amazon's behavior is still anti-competitive. They are the big boys. The drive lots of volume, and have high fees. This policy makes it impractical for most vendors to support Amazon's competitors or compete with Amazon themselves. And it robs customers of a meaningful choice that would cut out an expensive middleman. Without this policy, you might see lots of products on Amazon that are $19.99 with Amazon's 30% cut, and maybe $13.99 (30% less) on the vendor's own website. The consumer loses twice with Amazon's policy: once because they couldn't get the item at a cheaper price, and again because they didn't support any innovation or competition in the market, which would also lower prices.
binarysolo 6mo ago
Long-time Amazon seller/brand here, so here's the crux of the case: 1. Amazon is a search engine for product 2. It values being the cheapest destination for products (MFN most favored nation clause to sell on their website), and basically will suppress your listings from search if they can find you selling it cheaper elsewhere. 3. Amazon is def one of the more expensive ecom channels to sell, BUT they've got a huge audience as well due to decades of consumer-first policies, so sellers still go there because even if they have loyal customers with strong brand loyalty, you still end up with at least 30% of customers going to Amazon first after seeing your ads elsewhere + the lure of NTB new-to-brand customers you can acquire there. So the crux of the case is dependent on whether they can do #2 with impunity -- which Amazon considers "consumer friendly" (but obviously it's win-win for them too).
- mgiampapa 6mo ago
  I order from Amazon because of their logistics. For some reason Amazon can ship for free at the same price as the producer's Shopify page that wants to charge me insane shipping because I live in a remote location. Yes, I understand the price fixing is why they aren't selling for less on their own site, but Amazon's superpower is logistics, not years of goodwill and brand loyalty.
  - binarysolo 6mo ago
    I mean, 1-2 day shipping is a huge part of their consumer-first policy, which is why every seller has got to do FBA -- for the longest time until COVID, the algorithm heavily penalized FBM fulfilled by merchant from ranking in the search results. Once FBA started failing during COVID due to warehouse restrictions + sellers and 3PL third party logistics centers really stepped up did FBM even become a thing (and Amazon smartly gave access to Prime badges for FBM sellers who could deal with stringent shipping times). IMHO the other big superpower Amazon has is to force sellers to eat returns and provide retroactive refunds when a product gets recalled.
    - ssl-3 6mo ago
      It can be 1 or 2 day shipping. That's normally what I get at my house in Ohio. But it can also be a lot faster. I took a trip to Tampa not so long ago for a few days to hang out with an old friend who I don't see very often, and also to help him with a long list of technical stuff around his house. I flew down in cattle class with no luggage, which meant that I didn't get to bring anything in terms of tools or materials. That left me a bit out-of-sorts -- I'm used to having a work truck with me that is full of the tools and stuff that I find useful. And we got into all kinds of projects. We got a lot actually-finished, and we had a great time doing that stuff together. But there was a recurring theme: We'd need to buy some widget or other to move forward. So I'd fire up my pocket supercomputer and start looking to see if Home Depot or Best Buy or Wal-Mart or whoever had it locally, and then start to figure out some ideal factor of best price and travel time. Because that's just what I know how to do. In my life, when I want to get things done today and doing that requires more widgets, then I have to get in the car and drive to the store to get them -- ideally, with a good plan in place first. And he wasn't having any of that. Over and over again, he'd shut me down and say "No, look. Just order it on Amazon. They'll probably bring it over today." And over and over again, I'd look on Amazon and: Sure enough. They brought it over today. Sometimes, with 3 different deliveries in a single day as projects progressed and our need for widgets changed shape. Sometimes, late at night. I don't think we drove anywhere at all while I was down there except to tool around the neighborhood to find some yard sales one morning, and another trip to pick up more liquor and some Chilean sea bass from Costco.
m463 6mo ago
Things I don't like about amazon: - they take a huge cut, making them more expensive. I've heard some folks give 50% to amazon to sell stuff - they destroy or drive away brands, so you cannot shop for quality - "customers" are bombarded by ads. I think sponsored links seem to be close to 100% of results until you scroll down a few pages.
7777777phil 6mo ago
MFN clauses are common in retail, what's different about Amazon's is the enforcement. Manufacturer MAP policies threaten "we won't ship you more," which you can recover from (unlike a listing demotion)

274 points by kmfrk 6mo ago

worik 6mo ago

Unsurprising Did Amazon think they were too big to convict? I wonder if they will meet the fate of Standard Oil, back in the day.

fmajid 6mo ago
No, Antitrust law was effectively neutered by the Chicago School and their agent Robert Bork. https://www.theamericanconservative.com/robert-borks-america/ https://www.theamericanconservative.com/robert-borks-america... (BTW that source is right-wing and can hardly be said to be biased against Bork).
- vondur 6mo ago
  That's fascinating. Bork was denied being on the supreme court but his ideas shaped current antitrust laws. It feels a bit like the old Standard Oil argument: It's ok to have a huge market share so long as pricing for goods gets cheaper even if it hurts competition overall. *edited* for grammar.
  - blackjack_ 6mo ago
    Yeah. Heather Cox Richardson was arguing about this today, saying that historically the job of the government was to decide that cheaper but gutting a local economy, or cheaper but taking enough market share to be able to heavily raise prices in the future was bad. But due to Bork that capacity of the government to actually help drive good outcomes for the bulk of the population has been gutted.
    - pas 6mo ago
      local small business should offer local specialty, if it's doing the exact same thing as the big business but with higher overhead, then why not find something much more productive for the folks there? small local economies that are stagnating already for decades are not great for anyone. people who live there are struggling, no upward mobility, anyone a bit more successful leaves, the usual urban rural polarization intensifies, yadda yadda. obviously one of the big drivers of this is the completely fucked up housing policy. (which itself is driven by public safety and public transit issues.) education is a close second. then the return to office mandates. the all the discontinuities and disincentives of the braindead wrong implementation of welfare (and other social support/payments). the real economy deadweight loss is easily 2-3% of GDP (per year of course)
  - fmajid 6mo ago
    Remember, Bork was the third guy who supinely did Nixon's bidding when Attornet-General and his deputy resigned rather than fire the special prosecutor investigating Watergate.

trollbridge 6mo ago

Amazon would be smart to settle with no admission of wrongdoing and an agreement to seal documents lest every other state end up following suit.

ikidd 6mo ago
The documents can be subpoenaed for a new proceeding from the source.

fmajid 6mo ago

[flagged]

add-sub-mul-div 6mo ago
[flagged]
- decremental 6mo ago
  [dead]
113 6mo ago
Seems like that's just for protesters.
- NewJazz 6mo ago
  [flagged]
  - smallmancontrov 6mo ago
    [flagged]
cucumber3732842 6mo ago
That would be like showing up for the battle of Kursk with an M18 battalion. Might go well at first, you might score some big flashy wins, but....ugh... things are gonna get worse as the party goes on and it's generally an ill advised strategy. Rico as written and enforced walks right up to the limit of constitutionality in a dozen ways. It's built for speed. It's never really been thrown into a knock down drag out legal action between titans on equal footing (i.e. a bigco legal team, potentially helped by other bigcos). It might survive nominally but it probably won't come out the other end in serviceable condition. You might win a few but eventually an appeal will find its target and end your day. I say go for it. Heads I win. Tails you get RICO reform.
- 6mo ago

lelandfe 6mo ago

If you've ever seen those "Click To Reveal Price" or "Price Only Revealed At Checkout" products online, this here is one reason why. They help businesses keep discounted prices hidden from Amazon's crawlers.

fg137 6mo ago
Is it effective, like, at all?
- 14 6mo ago
  I know myself as well as others in my family have talked about this many times and have a hard rule that if someone has to hide the price they are ashamed of it and we refuse to support them. I literally experienced this tonight. I've been wanting to try some SnackCrates the service where you get snacks from around the world delivered monthly or just a single box if you want. Well the Company SnackCrate stopped shipping to Canada so been looking for another company that does. I see an ad on Facebook and check it out. First looked if they deliver to Canada before anything else. Then try find a price and you can't. Looked all over their site with nothing that even hints at the cost. They want you to first do a snack test to determine good snacks you may like then provide information and so on. Then you can see pricing options. I refuse to do that. Instantly left the site and read the comments on Facebook where I then saw several comments state how expensive they were for such little abouts of snack which made me say yep they are ashamed of the price and that's why they hide it.
ggreer 6mo ago
This can also be true if the manufacturer of the product requires that retailers not offer a price below a certain amount. This is called the minimum advertised price (MAP) and is common for big brands like Apple. Another way to get around the minimum advertised price is to bundle the product with some other product or service, such as is done with cell phone contracts.
xnx 6mo ago
Blame the manufacturer for this, not the reseller.

SilverElfin 6mo ago

We need all new antitrust laws. The size of these companies is itself a problem. They have so much power that there is no possibility for fair competition. Maybe we can start by taxing companies that are worth more than 1 trillion at an extremely high rate.

foobarian 6mo ago
I wonder who would prosecute them. What about an AG who, when confronted about doing a bad job, deflects by pointing out that Nasdaq is "smashing records?"
- cogman10 6mo ago
  I'd be in favor of giving Lina Khan a lifetime appointment to heading the FTC along with 10x their current budget to tackle exactly this problem. A major part of the problem isn't even that we don't have laws on the books, it's that funding to the enforcement agencies has been gutted to the point where they can mostly just go after extreme egregious violations or very easy to win cases. The IRS is in exactly the same boat.
  - SilverElfin 6mo ago
    That would be great, but I think even her job needs new laws. Otherwise, one of the problems is even hardcore enforcement takes years and huge amounts of taxpayer expense. We need to make it simple, cheap, and quick to improve competition.
    - cogman10 6mo ago
      I don't disagree. I think she's about the perfect person to be involved in writing those new laws in some fashion.
- hoppyhoppy2 6mo ago
  She's not the AG anymore, though I'm not claiming that Todd Blanche is better.

deleted 6mo ago

[deleted]

ggreer 6mo ago

It's odd that this is a request for a preliminary injunction considering that the case is almost four years old. Both the 2022 and the new filing are heavily censored[1][2], so I can't know for sure, but I didn't notice any revelation in the latest filing. Amazon requires that anyone selling through their platform not offer lower prices elsewhere online. If a seller does so, they'll be relegated to the "New & pre-owned" offers section below the "Add to cart" & "Buy it now" buttons. This has been the case since at least 2019. (This also means that if you're shopping on Amazon and want a better deal, you should check the other offers section for a cheaper price.) Lots of retailers (both physical & online) have similar requirements, and many manufacturers have similar requirements for minimum advertised prices (such as Apple). I think the California AG's plan is to argue that the pricing rules combined with Amazon's large market share merit a judgement against them, but it's going to be an uphill battle to single out one company for practices that are common to the industry. 1. https://oag.ca.gov/system/files/attachments/press-docs/2022-09-14%20Redacted-California%20v.%20Amazon%20Complaint.pdf https://oag.ca.gov/system/files/attachments/press-docs/2022-... 2. https://oag.ca.gov/system/files/attachments/press-docs/REDACTED%20Memorandum%20of%20Points%20and%20Authorities%20ISO%20MPI.pdf https://oag.ca.gov/system/files/attachments/press-docs/REDAC...

thayne 6mo ago
> Lots of retailers (both physical & online) have similar requirements My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary. > many manufacturers have similar requirements That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.
- Ferret7446 6mo ago
  Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?

reenorap 6mo ago

How is this not a complete violation of anti-trust laws? If the federal government won't pursue it (questionable in this environment), surely there's more than enough to go after it state-by-state. And can't we do a class-action lawsuit against Amazon at this point?

dmix 6mo ago
You're replying to an article about an anti trust investigation into Amazon that is currently in pre-trial preliminary stages. Which is why the article is talking about information they discovered during the course of it.

jmyeet 6mo ago

The entire use case of dynamic pricing is to raise prices. Airlines were really the first to do this but there it kinda makes sense. You have a plane. It's going anyway. You want to fill it. At the other extreme is RealPage, which is explicitly designed to raise rents and it's used by enough people that you can view it as the last frontier of anti-trust, anticompetitive behavior and price-fixing. It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it. That's another aspect to this: collusion doesn't happen in dark smoke-filled rooms anymore. It can be as simple as all "competitors" simply using the same software, which tells them all to do the same thing. Another commenter had it right: this is beyond antitrust or competition law. It's a RICO issue. There's no real structural reason for inflation since the pandemic. The pandemic simply broke the seal on raising prices and now everybody is in on it.

parineum 6mo ago
> It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it. Explain "violence", please.

LorenPechtel 6mo ago

And what's really stupid about this is that done openly there probably wouldn't be an issue. Insurance companies can demand providers charge them the lowest rate they charge anyone. Would there have been any issue if Amazon had simply said that to get those features you must match any deals you give anyone else?

snovv_crash 6mo ago
Selling to a reseller at the same price isn't an issue. The problem is disallowing selling direct to customer at a lower price. It means if someone makes another online marketplace, let's call it Ganjes, then if they have lower overheads they can't sell for less than Amazon does. Similar for DTC from the manufacturer.
gnopgnip 6mo ago
Amazon isn’t doing this to benefit customers. A seller/store with an item priced at $100 and selling at a discount on their own site would be pushed off the buy box and customers could see the item for sale for $120 from another seller.

refurb 6mo ago

If Amazon punishes sellers for having lower prices elsewhere, isn’t it the sellers choice whether to lower their price on Amazon OR raise their price for other sellers? I didn’t see anything in the article suggesting Amazon ask for the 2nd option, just examples of sellers who did the 2nd one.

avidiax 6mo ago
You are correct that the merchants have that choice. Amazon's behavior is still anti-competitive. They are the big boys. The drive lots of volume, and have high fees. This policy makes it impractical for most vendors to support Amazon's competitors or compete with Amazon themselves. And it robs customers of a meaningful choice that would cut out an expensive middleman. Without this policy, you might see lots of products on Amazon that are $19.99 with Amazon's 30% cut, and maybe $13.99 (30% less) on the vendor's own website. The consumer loses twice with Amazon's policy: once because they couldn't get the item at a cheaper price, and again because they didn't support any innovation or competition in the market, which would also lower prices.

binarysolo 6mo ago

Long-time Amazon seller/brand here, so here's the crux of the case: 1. Amazon is a search engine for product 2. It values being the cheapest destination for products (MFN most favored nation clause to sell on their website), and basically will suppress your listings from search if they can find you selling it cheaper elsewhere. 3. Amazon is def one of the more expensive ecom channels to sell, BUT they've got a huge audience as well due to decades of consumer-first policies, so sellers still go there because even if they have loyal customers with strong brand loyalty, you still end up with at least 30% of customers going to Amazon first after seeing your ads elsewhere + the lure of NTB new-to-brand customers you can acquire there. So the crux of the case is dependent on whether they can do #2 with impunity -- which Amazon considers "consumer friendly" (but obviously it's win-win for them too).

mgiampapa 6mo ago
I order from Amazon because of their logistics. For some reason Amazon can ship for free at the same price as the producer's Shopify page that wants to charge me insane shipping because I live in a remote location. Yes, I understand the price fixing is why they aren't selling for less on their own site, but Amazon's superpower is logistics, not years of goodwill and brand loyalty.
- binarysolo 6mo ago
  I mean, 1-2 day shipping is a huge part of their consumer-first policy, which is why every seller has got to do FBA -- for the longest time until COVID, the algorithm heavily penalized FBM fulfilled by merchant from ranking in the search results. Once FBA started failing during COVID due to warehouse restrictions + sellers and 3PL third party logistics centers really stepped up did FBM even become a thing (and Amazon smartly gave access to Prime badges for FBM sellers who could deal with stringent shipping times). IMHO the other big superpower Amazon has is to force sellers to eat returns and provide retroactive refunds when a product gets recalled.
  - ssl-3 6mo ago
    It can be 1 or 2 day shipping. That's normally what I get at my house in Ohio. But it can also be a lot faster. I took a trip to Tampa not so long ago for a few days to hang out with an old friend who I don't see very often, and also to help him with a long list of technical stuff around his house. I flew down in cattle class with no luggage, which meant that I didn't get to bring anything in terms of tools or materials. That left me a bit out-of-sorts -- I'm used to having a work truck with me that is full of the tools and stuff that I find useful. And we got into all kinds of projects. We got a lot actually-finished, and we had a great time doing that stuff together. But there was a recurring theme: We'd need to buy some widget or other to move forward. So I'd fire up my pocket supercomputer and start looking to see if Home Depot or Best Buy or Wal-Mart or whoever had it locally, and then start to figure out some ideal factor of best price and travel time. Because that's just what I know how to do. In my life, when I want to get things done today and doing that requires more widgets, then I have to get in the car and drive to the store to get them -- ideally, with a good plan in place first. And he wasn't having any of that. Over and over again, he'd shut me down and say "No, look. Just order it on Amazon. They'll probably bring it over today." And over and over again, I'd look on Amazon and: Sure enough. They brought it over today. Sometimes, with 3 different deliveries in a single day as projects progressed and our need for widgets changed shape. Sometimes, late at night. I don't think we drove anywhere at all while I was down there except to tool around the neighborhood to find some yard sales one morning, and another trip to pick up more liquor and some Chilean sea bass from Costco.

m463 6mo ago

Things I don't like about amazon: - they take a huge cut, making them more expensive. I've heard some folks give 50% to amazon to sell stuff - they destroy or drive away brands, so you cannot shop for quality - "customers" are bombarded by ads. I think sponsored links seem to be close to 100% of results until you scroll down a few pages.

7777777phil 6mo ago

MFN clauses are common in retail, what's different about Amazon's is the enforcement. Manufacturer MAP policies threaten "we won't ship you more," which you can recover from (unlike a listing demotion)