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Is Amazon Violating U.S. Antitrust Laws?

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Re: Is Amazon Violating U.S. Antitrust Laws?

#31

Post by munk-a »

Mikeb85 wrote: post #22

It'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 create…

It is illegal to do this when you slip below the cost of production line - at that point your lost profit becomes an investment (if you're doing it right) in either securing long term profits[1] (printers and toner) or driving competitors out of business (predatory pricing[2] or possibly dumping[3] if done for market control)

[1] https://en.wikipedia.org/wiki/Loss_leader

[2] https://en.wikipedia.org/wiki/Predatory_pricing

[3] https://en.wikipedia.org/wiki/Dumping_(pricing_policy) Dumping is a particularly interesting instance since there isn't a direct realized economic gain.

Re: Is Amazon Violating U.S. Antitrust Laws?

#32

Post by [deleted] »

ajhurliman wrote: post #27
nanoscopic wrote: post #20

Amazon 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?

[deleted]

Re: Is Amazon Violating U.S. Antitrust Laws?

#34

Post by [deleted] »

lvs wrote: post #24
_4vew wrote: post #18

(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.

[deleted]

Re: Is Amazon Violating U.S. Antitrust Laws?

#35

Post by int_19h »

_4vew wrote: post #18

(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…

The "consumer welfare standard" is a relatively recent thing, as the article points out, and there were antitrust actions (e.g. blocking of mergers) that were sustained without direct evidence of consumer prices going up as a result prior to that standard being enshrined.

And many people don't think it's a valid standard. So you might be correct in that this is currently legal - or, perhaps, unenforceable because there's no way to prove that it is illegal to the requisite standard of proof. But if so, then to me that would be yet another argument in favor of getting back to antitrust that we used to have before it got Borked [1], since what we have right now is very clearly not working.

[1] https://www.theamericanconservative.com/articles/robert-bork...

Re: Is Amazon Violating U.S. Antitrust Laws?

#36

Post by microcolonel »

lvs wrote: post #24
_4vew wrote: post #18

(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.

It is your duty to evade violation of the law, and your absolute right to evade accusations of violation of the law.

Re: Is Amazon Violating U.S. Antitrust Laws?

#37

Post by harimau777 »

munk-a wrote: post #28
omeid2 wrote: post #25

Earlier quoted context omitted.

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...

Can you explain why you feel that it's unethical? That's not something I've ever thought to consider one way or the other.

Re: Is Amazon Violating U.S. Antitrust Laws?

#38

Post by [deleted] »

_4vew wrote: post #18

(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…

[deleted]

Re: Is Amazon Violating U.S. Antitrust Laws?

#39

Post by microcolonel »

munk-a wrote: post #17
mr_toad wrote: post #16

Earlier 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.

Or controlling the market place where those middle-men are operating from which you're forcing them out? Really, the burden of proof here is on Amazon and I'd be amazed if there wasn't really clear cut proof that they used analytics they don't offer to outside clients (private information) to specifically undercut the existing sellers (under pricing) or selling the products at a profitable point unrealizable if you n…

> the burden of proof here is on Amazon

What? What kind of standard is that?

Re: Is Amazon Violating U.S. Antitrust Laws?

#40

Post by microcolonel »

ajhurliman wrote: post #27
nanoscopic wrote: post #20

Amazon 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?

It seems to me that, by this description, Amazon is admirably fulfilling its legal and fiscal duties, and to a greater degree than I thought before receiving this information.
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