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Is Amazon Violating U.S. Antitrust Laws?

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

#71

Post by ThrustVectoring »

rdlecler1 wrote: post #52

The real danger is in debasement—something we’ve seen with product over the past 40-50 years and it’s no different than Walmart putting pricing pressure on it’s suppliers. If suppliers can’t increase costs and they’ve maxed out economies of scale then they need to debase their product to Suppliers need to cut corners to generate additional profits.

This squeeze on suppliers is a big part of why Amazon has such a problem with counterfeit goods, IMO. If you start blindly optimizing on supplier prices, counterfeiters can often win those price competitions.

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

#72

Post by ehsankia »

tyingq wrote: post #64
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…

I do believe these sorts of "Amazon is amazingly smart" posts. But they are hard to reconcile with why Amazon keeps showing me a rice cooker ad, after I buy a rice cooker from them.

Maybe you'll find it so useful that you'll want to gift it to someone else also?

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

#73

Post by serioussecurity »

tyingq wrote: post #64
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…

I do believe these sorts of "Amazon is amazingly smart" posts. But they are hard to reconcile with why Amazon keeps showing me a rice cooker ad, after I buy a rice cooker from them.

Because ad click through rates are so low and the signal is so incredibly sparse. It's all measured against a test set which the researchers rarely look at directly (because the data set is so large). So if something lifts ad vlicks by 1% and that's from 100 in 10k to 101 in 10k, they don't really care if 9k of the ads get appreciably dumber.

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

#74

Post by [deleted] »

chii wrote: post #46
MereInterest wrote: post #44

Earlier quoted context omitted.

Depends. Did they intentionally go out of their way to teach the model that predatory pricing, despite being profitable, is not allowed?

why does it matter that the decision came out of an AI model? Predatory pricing is either legal or not (in the eyes of the court, or legislations).

[deleted]

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

#75

Post by harryh »

tyingq wrote: post #64
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…

I do believe these sorts of "Amazon is amazingly smart" posts. But they are hard to reconcile with why Amazon keeps showing me a rice cooker ad, after I buy a rice cooker from them.

patio11 has a good tweetstorm on why Amazon doing this is perfectly rational.

https://twitter.com/patio11/status/875629380105416705

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

#76

Post by cryptonector »

serioussecurity wrote: post #73
tyingq wrote: post #64

Earlier quoted context omitted.

I do believe these sorts of "Amazon is amazingly smart" posts. But they are hard to reconcile with why Amazon keeps showing me a rice cooker ad, after I buy a rice cooker from them.

Because ad click through rates are so low and the signal is so incredibly sparse. It's all measured against a test set which the researchers rarely look at directly (because the data set is so large). So if something lifts ad vlicks by 1% and that's from 100 in 10k to 101 in 10k, they don't really care if 9k of the ads get appreciably dumber.

Sure, but if you buy a rice cooker, maybe the ads to show you are for: rice, cookbooks (featuring lots of rice?), pressure cookers, cast iron pans, sous vide recirculators, and so on. I mean, you have a rice cooker, you won't want another, but chances are you'd buy other things you don't already have.

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

#77

Post by Dylan16807 »

munk-a wrote: post #42
harimau777 wrote: post #37

Earlier quoted context omitted.

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.

I think that loss leading leads to device or producer lock in (as it's intended to) and limited the utility of devices for frivolous reasons - if your nuclear reactor specifically requires rods with little notches at the end feel free to warn and protect against incompatible notches, but if that notch requirement was to lock the consumer into your Atomizer Brand Rods(R) then you may force a consumer into making fisca…

The example that comes to my mind for "loss leader" is stores a while back selling CD-R spindles for almost free, limit one per customer, to get people in the door. No lock-in at all, just a way of doing advertising.

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

#78

Post by hbosch »

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…

What is different — generally — between the way Amazon determines prices, in your example, and the way Google determines the best search results? It seems they both use massive knowledge and technology advantages to determine something that’s in the best interest of the company...

In fact almost all large businesses use these types of data to maximize profits, I would assume. Is there a functional difference between changing a digital page to optimize return and changing a store shelf configuration at Wal Mart to do the same? Because of course Wal Mart uses analytics to determine their store layouts and deal placements etc.

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

#79

Post by nmjohn »

cryptonector wrote: post #76
serioussecurity wrote: post #73

Earlier quoted context omitted.

Because ad click through rates are so low and the signal is so incredibly sparse. It's all measured against a test set which the researchers rarely look at directly (because the data set is so large). So if something lifts ad vlicks by 1% and that's from 100 in 10k to 101 in 10k, they don't really care if 9k of the ads get appreciably dumber.

Sure, but if you buy a rice cooker, maybe the ads to show you are for: rice, cookbooks (featuring lots of rice?), pressure cookers, cast iron pans, sous vide recirculators, and so on. I mean, you have a rice cooker, you won't want another, but chances are you'd buy other things you don't already have.

What is the ratio between people who viewed a rice cooker (the group I'm assuming they target with ads) vs. those who actually bought a rice cooker?

Is it possible the ratio is so large to where while it obviously could be optimized to exclude people who have since purchased said item - the optimization is only a rounding error, and may not turn out to be worth it?

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

#80

Post by Declanomous »

sokoloff wrote: post #67
tyingq wrote: post #64

Earlier quoted context omitted.

I do believe these sorts of "Amazon is amazingly smart" posts. But they are hard to reconcile with why Amazon keeps showing me a rice cooker ad, after I buy a rice cooker from them.

Amazon seems to think that I’m a real vacuum aficionado/collector as well. It’s quite possible that those are still the best items to recommend to us, to mop up any “unhappy with the one they got, so save them with a return/rebuy” sales.

I wouldn't be surprised if the actual reason was they are capturing extra sales from people who bought something, liked it a lot, and then bought another to give to their kids or for their second home. My mom buys me random chotchkies all the time after she bought them and liked them, and if my parents were well off I could easily see her buying me a vacuum or a new mattress after she got herself one.

For 99% of people that probably doesn't happen, but the people with the money to do that probably spend a TON of money, so they are worth targeting with ads.

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