Is Amazon Violating U.S. Antitrust Laws? • Hacker News Board

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

#131

Post by 3xblah » Wed, Apr 24, 2019, 9:53 AM UTC

thedailymail wrote: post #93

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'm not sure offloading its decision-making to the neural network will be an effective legal protection for Amazon against anti-trust claims. The key question in the US is whether "predatory" pricing results in financial harms (higher prices) to US consumers. As I understand the logic put froth by Bork in the 70s, the general idea is that "the market" will solve this problem in most cases, under the assumption that i…

"Sussman constructed his theory as something a company harmed by Amazon could use to file a lawsuit, even if no antitrust laws are changed. If it survives an initial motion to dismiss in the courts, Amazon would have to reveal unit costs in a discovery proceeding, which would settle the controversy."

What Sussman actually wrote was "In addition, [this paper] calls for the establishment of a viable framework under which a case may be brought against such firms [as Amazon] by injured competitors."

The journalist says no antitrust laws need be changed. What he fails to mention is the small matter of this framework Sussman says is needed before any case can be brought. It does not exist.

Sussman did not describe the framework in any detail or how it would work. All one can find in the paper is this single sentence: "It is, therefore, necessary to develop some means of oversight that will allow the public to determine whether firms such as Amazon are engaging in such activities."

"Linda Khan published a very informative and influential review on Amazon and antitrust in 2017."

I can remember when a story on the Khan paper was posted to HN. I thought at the time the journalist seemed just a tad overly optimistic. It felt odd to see a law review article being so "hyped" by a journalist. It almost seemed like he/she did not want the reader to actually read the paper. There was so much paraphrasing that the risk of the journalist getting something wrong would be very high.

In 2018, there was another paper in Yale LJ by Baker and Morton that discussed Amazon's anticompetitive activities. This paper was actually influential.1 Unlike Sussman's single sentence calling for "some means of oversight" and a framework under which cases can be filed, the authors included an entire section on "US Enforcement Challenges", about five pages devoted to how enforcement might proceed. The paper was cited by US Sen. Blumenthal in a letter to DOJ and FTC urging them to open investigations of Amazon's predatory pricing.2 (He did not cite Khan's paper.)

Not sure if the Baker and Morton paper received any hype from journalists, but it is indisputable the paper and the letters to DOJ and FTC had an impact. Amazon finally removed the MFN clauses from its agreements with US sellers, as it had done for sellers in Europe in 2013.3

1 https://www.yalelawjournal.org/feature/antitrust-enforcement...

2 https://www.blumenthal.senate.gov/imo/media/doc/12.19.18%20-... https://www.blumenthal.senate.gov/imo/media/doc/12.19.18%20-...

3 https://www.bbc.com/news/business-23881202 https://www.axios.com/amazon-price-practice-antitrust-elizab...

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

#132

Post by imglorp » Wed, Apr 24, 2019, 10:45 AM UTC

munk-a wrote: post #15

imglorp wrote: post #5

Earlier quoted context omitted.

That seems like you could easily circumvent by claiming the underpriced service is a loss leader, routing customers towards more profitable upsells at other points in the relationship. Printers and toner, handles and razors, banks and toasters.

These all[1], along with the general concept of a loss leader, are instances where a company is leveraging patent or protected data laws in an unintended manner to set up a moat against competition - as this is anti-competitive all these examples should be examined to see to what extent are preventing free enterprise - printer toner is a particularly egregious example of using device lock down to prevent a legitimate…

Okay, poor examples?

How about quickie marts selling underpriced drinks in the back... but you usually end up buying other things on your way to the drinks that have the big margins. The drinks are probably undercutting other stores.

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

#133

Post by C1sc0cat » Wed, Apr 24, 2019, 11:22 AM UTC

ssnistfajen wrote: post #94

Maybe this so-called "law student" should read up on retail marketing terms from time to time. Loss-leaders have been a thing for decades if not longer. Amazon is just able to maintain more loss-leaders than your average brick-and-mortar store (chain or non-chain), and their operations are diversified beyond E-commerce/retail with higher margins which can polish the numbers quite a bit. The world has yet to see anoth…

And look at some of the super aggressive (ok bullying) that the big supermarket chains do to suppliers /farmers etc.

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

#134

Post by nickik » Wed, Apr 24, 2019, 11:44 AM UTC

paxy wrote: post #95

elamje wrote: post #91

Regardless of law, they are profitably delivering a very wide variety of items to my door for significantly cheaper than anywhere else I look. I cannot ignore that

What about if/when they are the only retail company left and significantly raise prices? This is the reason such laws exist.

Its funny how this is a worry but it basically never happens. There is basically a incredibly tiny number of actual cases where this 'predatory pricing and then raise prices' has worked and not in markets as open as e-commerce and delivery that other companies could easily get into.

In fact historically this has not happened before Anti-Trust laws. It has basically been used by competitors who couldn't compete on the market so they went to their friends in government to stop their competition. Since they didn't want to argue 'Their product is better and cheaper' they argued, 'Its predatory pricing, as soon as I'm gone this company is gone raise prices'.

The first US anti-trust law was enacted because butchers were extremely angry about centralized slaughtering houses that used refrigerated trains to transport meat. Classic special interest politics. But somehow 150 years later the evil centralized slaughtering houses haven't raised the prices yet.

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

#135

Post by dhimes » Wed, Apr 24, 2019, 11:49 AM UTC

Normal_gaussian wrote: post #109

cryptonector wrote: post #76

Earlier quoted context omitted.

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.

Its funny you should use that example. I recently bought a rice cooker, and then bought another a few weeks later. I've done similar things a lot, in this case it was because the first cooker had too large a minimum cooking amount. I'm currently looking at buying my mother google WiFi - which I bought a few weeks ago. And a few months back I rebought a tool I had just purchased because I lost it. I currently work for…

There's a whole lot about advertising I don't know, but the question that sticks in my mind is, did you need that ad to know which rice cooker to buy the second time? Did it change your decision? Did you see an ad for a different rice cooker and act on that?

It seems like an effective ad would be this: Say you bought a rice cooker on Amazon for $75. Now Walmart shows you an ad for the same rice cooker for $60. That would certainly stick in my head- not for the rice cooker but for the price difference that Walmart can provide.

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

#136

Post by d4nt » Wed, Apr 24, 2019, 12:07 PM UTC

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 think the problem might be even more complex than that. From what you’ve said they seem to be training AI to predict what people want and how valuable it is to them. This problem used to be the role of the giant distributed computational process know as the Free Market. Communism/Socialism famously found that problem too hard to solve and collapsed as a result. If there’s a new way to solve it, it’s both hard to argue that’s a bad thing, and a major threat to many of society’s institutions.

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

#137

Post by Retric » Wed, Apr 24, 2019, 12:12 PM UTC

dhimes wrote: post #135

Normal_gaussian wrote: post #109

Earlier quoted context omitted.

Its funny you should use that example. I recently bought a rice cooker, and then bought another a few weeks later. I've done similar things a lot, in this case it was because the first cooker had too large a minimum cooking amount. I'm currently looking at buying my mother google WiFi - which I bought a few weeks ago. And a few months back I rebought a tool I had just purchased because I lost it. I currently work for…

There's a whole lot about advertising I don't know, but the question that sticks in my mind is, did you need that ad to know which rice cooker to buy the second time? Did it change your decision? Did you see an ad for a different rice cooker and act on that? It seems like an effective ad would be this: Say you bought a rice cooker on Amazon for $75. Now Walmart shows you an ad for the same rice cooker for $60. That w…

These are amazon internal adds, they don’t care about the specific rice cooker they show as much as the rice cooker category. Thus simply getting you to think about them while you’re on the website is enough they don’t need to predict your specific purchase.

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

#138

Post by jasonsync » Wed, Apr 24, 2019, 12:13 PM UTC

A little late.

Amazon launched a product called "Amazon Drive" in 2015 ...

Unlimited cloud storage! $11.99/year for photos and $59.99/year for everything:

https://venturebeat.com/2015/03/26/amazon-launches-two-new-c...

At the time, anyone familiar with cloud storage (Dropbox, Sync.com, Box etc.) knew that Amazon was undercutting their rivals (selling at a loss) to enter the consumer market.

Worse, many cloud providers resell AWS storage (Dropbox did at the time, and was an Amazon customer).

Amazon ran this "loss leader" for almost 2 years, hoping to drive the competition out.

In the end all they did was upset existing AWS customers, and eventually duped their own newly minted Amazon Drive customers, because they shuttered the service 2 years later (the losses started adding up on both sides):

https://techcrunch.com/2017/06/08/amazon-ends-its-unlimited-...

https://www.geekwire.com/2018/dropbox-saved-almost-75-millio...

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

#139

Post by mattkrause » Wed, Apr 24, 2019, 12:38 PM UTC

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.

> they don't really care if 9k of the ads get appreciably dumber.

But maybe they should. The recipients of those 9,000 ads are being trained to ignore the recommendations because they’re so useless, and may continue to ignore its suggestions even after it improves. Likewise, a few clueless recommendations can “spoil” good ones shown at the same time.

None of this shows up in the test set, of course, but people tend to turn off their brains when ‘evaluating’ ML stuff.

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

#140

Post by jondubois » Wed, Apr 24, 2019, 12:43 PM UTC

The root of the problem is that corporations have fooled governments into mixing up 'consumers' with 'people'. Governments should serve people, not consumers. This is a big mistake because people spend most of their lives working; this means that the average person spends the vast majority of their time producing value instead of consuming it. So the average person is not a consumer, they're a producer. The biggest consumers are rich people. Whenever you make laws to protect consumers, you're mostly protecting rich people. As wealth becomes increasingly centralized, this statement becomes increasingly true and it becomes a vicious cycle.