Amazon took away his prime membership. - South Park
Is Amazon Violating U.S. Antitrust Laws?
21–30 of 159 posts
Re: Is Amazon Violating U.S. Antitrust Laws?
#22It's not illegal to drive down prices in a competitive environment. In fact, economic theory says that in a sector that has 'perfect' competition, prices will essentially be the cost of production.
What Amazon is currently doing isn't illegal. In the future, if they abuse their dominant position to jack up prices, they might be in some trouble. But running on thin margins isn't illegal, and it seems Amazon has created avenues to produce profit without increasing prices, thus falling within the law and also with what economic theory predicts should happen.
Re: Is Amazon Violating U.S. Antitrust Laws?
#23Economically speaking, the question should boil down to "is Amazon operating in a contestable market, and/or are they engaging in abusive behavior to raise barriers to entry in the market, lowering its contestability". The notion of predatory pricing per se, in contrast, is not really well-defined. Is there some inherent reason why the suppliers and wholesalers who are supposedly being harmed by this monopoly could not simply move to an established competitor, e.g. eBay, Alibaba or whatever, or even start a platform of their own along more favorable principles?
Re: Is Amazon Violating U.S. Antitrust Laws?
#24(Disclaimer: I work for Amazon, but not in the retail, legal, or finance departments, and I have no inside information about what the company is doing with respect to its pricing. Opinions are my own and not of the company.) Yet another sensationalist headline that is unsubstantiated by the article. "This law student" has a theory . He does not have evidence -- and, in fact, much ink in the article is spilled on the…
Oh come on. You're clearly engineering on how to evade antitrust law. But the better argument is simply that if antitrust law doesn't sufficiently cover Amazon's business, then it needs to be changed to ensure that it does.
Re: Is Amazon Violating U.S. Antitrust Laws?
#25Earlier quoted context omitted.
Vertical integration, or cutting out the ‘middle-man’ is not in and of itself illegal. What might be illegal would be selling products at a loss to drive others away.
Loss leaders are legal, right? What's the effective difference between those and predatory pricing? Is it just the intention rather than the actual effect?
Loss leaders are to bring customers in with the hope of selling them some higher margin products, predatory pricing is selling products below the price to push competition out of business.
Re: Is Amazon Violating U.S. Antitrust Laws?
#26Economically speaking, the question should boil down to "is Amazon operating in a contestable market, and/or are they engaging in abusive behavior to raise barriers to entry in the market, lowering its contestability". The notion of predatory pricing per se , in contrast, is not really well-defined. Is there some inherent reason why the suppliers and wholesalers who are supposedly being harmed by this monopoly could…
And that's the question that seems pretty clear cut as a violation - not currently provable but highly indicated by evidence. The portion of Amazon that sells things to consumers provides a clear incentive to raise barrier to entry in the market that they sell those things in - and Amazon also happens to own the market that these things are sold over.
This is part of the reason I think there should be concern over Amazon, Google & Apple's profitability (and to a lesser extent Microsoft and Valve) creating a walled garden app store opens up all sorts of crazy anti-trust exposure, just because the FTC is currently declawed doesn't mean that exposure doesn't exist, that risk is just being deferred.
In cases like Amazon where they are actively competing against competitors on their own platform... the question of how their suggestion algorithm works is a huge can of legal liability.
Re: Is Amazon Violating U.S. Antitrust Laws?
#27Amazon has a team called "Amazon Profitability Group". I used to work for said team, albeit only briefly. The purpose of the team is to calculate the proper price to sell items for, the "discount" to vendors, and the items to put in the "buy box" in order to make the most profit for Amazon. I think the what is described here in the article is only the tip of the iceberg. Amazon isn't doing something as simplistic as…
"and then doing what the systems tell them is the most profitable."
...so, not predatory pricing then?
Re: Is Amazon Violating U.S. Antitrust Laws?
#28Earlier quoted context omitted.
Loss leaders are legal, right? What's the effective difference between those and predatory pricing? Is it just the intention rather than the actual effect?
Loss leaders are to bring customers in with the hope of selling them some higher margin products, predatory pricing is selling products below the price to push competition out of business.
Loss leaders are not universally legal, they are legal in some US states and illegal in others[1] - this may actually be a giant can of poo that's heading towards Amazon now that most states are agreed sales tax should apply to online purchases. Personally I find that loss leader pricing is unethical in a free economy, but my opinion isn't US law.
[1] https://www.aeaweb.org/research/loss-leading-bans-retail-com...
Re: Is Amazon Violating U.S. Antitrust Laws?
#29Earlier quoted context omitted.
Loss leaders are legal, right? What's the effective difference between those and predatory pricing? Is it just the intention rather than the actual effect?
Loss leaders are to bring customers in with the hope of selling them some higher margin products, predatory pricing is selling products below the price to push competition out of business.
So yes, it’s not externally distinguishable and basically boils down to intent.
Re: Is Amazon Violating U.S. Antitrust Laws?
#30(Disclaimer: I work for Amazon, but not in the retail, legal, or finance departments, and I have no inside information about what the company is doing with respect to its pricing. Opinions are my own and not of the company.) Yet another sensationalist headline that is unsubstantiated by the article. "This law student" has a theory . He does not have evidence -- and, in fact, much ink in the article is spilled on the…
Oh come on. You're clearly engineering on how to evade antitrust law. But the better argument is simply that if antitrust law doesn't sufficiently cover Amazon's business, then it needs to be changed to ensure that it does.
You can disagree on whether or not Amazon is pricing things ethically, or whether or not antitrust laws should cover Amazon's actions, but the article title is "Is Amazon Violating U.S. Antitrust Laws" which, in the current state of US law, it (probably) isn't.