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Amazon Is a Monopoly

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Re: Amazon Is a Monopoly

#121

Post by Alupis »

mikeash wrote: post #114
Alupis wrote: post #42

Earlier quoted context omitted.

> I'm not sure that it can control prices Amazon very often competes directly with sellers on the Marketplace, and often undercuts them on price. There are products they sell below the purchase cost, sometimes below manufacturing cost. You can't compete with that unless you have piles of money to burn. They sell at a loss until they shake everyone loose from a product, then dominate all sales of that products on the…

So don’t sell on Amazon. There are tons of other options. Amazon is merely the largest, not the only.

Is that really still an option the bigger Amazon gets?

At what point is it a defacto monopoly? A huge share of people shop exclusively on Amazon, particularly when compared to 10 years ago. There's no sign it'll stop growing any time soon.

Choosing not to, or being prohibited from selling on Amazon effectively blocks you out of a significant share of ecommerce sales. There's no way around that.

Re: Amazon Is a Monopoly

#122

Post by coding123 »

whatshisface wrote: post #25
jklinger410 wrote: post #20

Earlier quoted context omitted.

>somebody will try to derail the discussion Pointing out competitors to a supposed monopoly is not derailing the conversation. It is the conversation.

Amazon is probably not a monopoly in the advertising market, but Alphabet doesn't run an online store.

How about we meta-compare instead:

http://gs.statcounter.com/search-engine-market-share

https://www.cnbc.com/2018/07/12/amazon-to-take-almost-50-per...

And that's e-commerce, if you add in offline shopping:

https://www.thebalancesmb.com/compare-brick-and-mortar-store...

So yes, Google has a much larger market share of "search" than Amazon has a market share of "commerce".

Re: Amazon Is a Monopoly

#123

Post by mbesto »

rb808 wrote: post #81

I think I can generalize that the problem with Amazon is similar to many of the modern tech companies in that they're super well funded and aren't expected to make a profit which allows them to undercut incumbents. Amazon can price lower than Target/Wallmart/B&N/Local Stores, lose money every year while the competition slowly dies. Uber can price lower than local taxis, lose money every year while the competition slo…

> and aren't expected to make a profit

Sorry to be harsh, but this "no profit" trope specifically when it comes to Amazon needs to die in a hot fire.

"“Percentage margins are not one of the things we are seeking to optimize. It’s the absolute dollar free cash flow per share that you want to maximize, and if you can do that by lowering margins, we would do that. So if you could take the free cash flow, that’s something that investors can spend. Investors can’t spend percentage margins.” “What matters always is dollar margins: the actual dollar amount. Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” “When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos is very focused on this “absolute dollar free cash flow metric.” You will see many people talk about Amazon’s focus on “growth” vs. margins, but the right focus is instead absolute dollar fee cash flow."[0]

Amazon optimizes for FCF and continually reinvests its "profits" back into the company. Check out their FCF: https://www.marketwatch.com/investing/stock/amzn/financials/...

> Amazon is similar to many of the modern tech companies in that they're super well funded

So you mean Amazon is funding their growth with their customers cash flow? I don't get how that's a problem.

If you want to talk about Uber, Lyft, WeWork...that's another thing. The unit economics are just simply not there. Amazon should not be in the same discussion as those companies.

[0] - https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-fr...

Re: Amazon Is a Monopoly

#124

Post by AnimalMuppet »

theturtletalks wrote: post #36
AnimalMuppet wrote: post #30

Earlier quoted context omitted.

Chromebook doesn't have the market share that Windows had in the 90s. In the context of antitrust cases, market share matters. Also note that Google's market share in search isn't relevant. Chromebook's market share in OSes is what matters for this particular case.

But Google has a way bigger search market share than Microsoft had browser market share at the time. And Google leverages Chrome to build and maintain search market dominance by making Google the default search engine on Chrome. Microsoft wasn’t doing that with IE. It’s not like Microsoft was stopping Netscape on Windows. All things considered, Google is showing more signs of being a monopoly than Microsoft was at th…

Getting a monopoly isn't necessarily an antitrust issue. The primary issue is if you have a monopoly on X, and you use that monopoly to try to gain market share in Y. So, Microsoft had a monopoly on PC operating systems, and they were using that to try to increase their dominance in web browsers. That's using your X to try to extend control of Y. (They weren't stopping Netscape on Windows, but they were trying very hard to reduce their market share as much as possible - to the point that they were paying websites to introduce Netscape-incompatible features. Internally, they said, "Try to make using Netscape a jarring experience".)

Google, arguably, has an effective monopoly on search. That's their X. They do not have a monopoly on PC operating systems, or portable operating systems. They are using their Y to try to maintain their X, which, so far as I know (but IANAL) is not an antitrust issue.

Re: Amazon Is a Monopoly

#125

Post by jimbokun »

tj-teej wrote: post #87
lisper wrote: post #83

Earlier quoted context omitted.

I'm not a huge Uber fan, but in their case at least I don't think you're being entirely fair. My home airport is SFO. The official taxis there have an extremely annoying pricing policy: if your destination is more than 20 miles form the airport they add a $50 surcharge to the cost of your trip. (I live 25 miles away.) And you can't summon a cab with an app. If you're at the airport they are very convenient. If you ar…

Serious question: once the taxi industry has died what makes you believe that Uber won't implement similar policies?

Then it's time to apply anti-trust law to Uber.

(Assuming Lyft or other companies are no longer viable competitors.)

Re: Amazon Is a Monopoly

#126

Post by coding123 »

rb808 wrote: post #81

I think I can generalize that the problem with Amazon is similar to many of the modern tech companies in that they're super well funded and aren't expected to make a profit which allows them to undercut incumbents. Amazon can price lower than Target/Wallmart/B&N/Local Stores, lose money every year while the competition slowly dies. Uber can price lower than local taxis, lose money every year while the competition slo…

Well you're not exactly doing a fair comparison for AirBnB because the actual owner sets the price. AirBNB doesn't set the price. Uber, on the other hand, does.

Re: Amazon Is a Monopoly

#127

Post by jiveturkey »

lisper wrote: post #83
rb808 wrote: post #81

I think I can generalize that the problem with Amazon is similar to many of the modern tech companies in that they're super well funded and aren't expected to make a profit which allows them to undercut incumbents. Amazon can price lower than Target/Wallmart/B&N/Local Stores, lose money every year while the competition slowly dies. Uber can price lower than local taxis, lose money every year while the competition slo…

I'm not a huge Uber fan, but in their case at least I don't think you're being entirely fair. My home airport is SFO. The official taxis there have an extremely annoying pricing policy: if your destination is more than 20 miles form the airport they add a $50 surcharge to the cost of your trip. (I live 25 miles away.) And you can't summon a cab with an app. If you're at the airport they are very convenient. If you ar…

take a taxi to the marriot next door. then uber from there.

Re: Amazon Is a Monopoly

#128

Post by matthewmacleod »

theturtletalks wrote: post #71
matthewmacleod wrote: post #55

Earlier quoted context omitted.

The core problem here is that you see the “thing” as “bundling a browser”, so your logical conclusion it that it is the “exact same thing”. In reality, Microsoft was accused of several different acts - monopolisation, unlawful tying arrangements, unlawful exclusive dealing arrangements. It was not merely the fact that Microsoft bundled a browser, but the whole ecosystem and market position around that action. It is p…

“The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer (IE) web browser software with its Windows operating system. Bundling them is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of IE. It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera)…

No – the issue is not bundling. Bundling in general is not a problem. Companies bundle things all the time, and it should be immediately obvious that this isn't a problem.

But bundling can become a problem when the company doing the bundling has an outsized effect on the market generally. This means that when a company (e.g. Microsoft) has total market dominance in a category, then bundling software for which there is already a third-party market, using privileged access to your own APIs—particularly when you talk about wanting to "extinguish" and "smother" rivals–it can become a problem where it otherwise wouldn't be.

Note that Google has had several antitrust investigations launched against it, including the ongoing US one.

Re: Amazon Is a Monopoly

#129

Post by enjoyyourlife »

Florin_Andrei wrote: post #98
rb808 wrote: post #81

I think I can generalize that the problem with Amazon is similar to many of the modern tech companies in that they're super well funded and aren't expected to make a profit which allows them to undercut incumbents. Amazon can price lower than Target/Wallmart/B&N/Local Stores, lose money every year while the competition slowly dies. Uber can price lower than local taxis, lose money every year while the competition slo…

> Tesla can price lower than Ford/Toyota/Merc, lose money every year while the competition slowly dies. That was a bad example.

It was not. They price lower for luxury cars than other companies.

Re: Amazon Is a Monopoly

#130

Post by perl4ever »

Alupis wrote: post #82
disposition2 wrote: post #78

Earlier quoted context omitted.

Are the actions of Amazon any different from what Walmart has done in the past? Just about all you describe, Walmart has been doing for 20+ years (probably closer to 30)

Yes and no. Until recently, Walmart hasn't had a Marketplace - so while Walmart has (and does) exploit their vendors with pricing and what-not, they haven't been able to wield that club against their competition directly like Amazon does. People have also been saying Walmart is quite anti-competitive for years for what that's worth too.

"Until recently, Walmart hasn't had a Marketplace"

No? When exactly did they start selling large numbers of items on their website that aren't in stores?

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