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Amazon Is a Monopoly

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Re: Amazon Is a Monopoly

#241

Post by mrtksn »

dodobirdlord wrote: post #238
mrtksn wrote: post #217

Earlier quoted context omitted.

Aren't they playing really nice and even operating at loss until they become a monopoly? It's not really a choice if a company is giving you free stuff. Probably it's the same idea with Uber: We can have really nice rides at good prices because rich people are co-paying our rides. When it's only Uber out there, they can start testing our patience while maximising the profits. Amazon and Uber are not really selling so…

> Aren't they playing really nice and even operating at loss until they become a monopoly? No, they aren't. They publish their financial statement every quarter. Generally their revenue is very close to their expenses. Given that, it's impossible that "operating at loss" is an accurate characterization of their business strategy. Jeff Bezos has a saying; "Your margin is my opportunity." It lays out pretty clearly wha…

What I meant was pre-monopoly. The times when a company is constantly loosing money, like Uber.

Anyway, what happens when there are no competitors because the margins are too slim to be profitable without being at Amazon scale? If they are not a charity these margins will get fattier as much as their hearts desires. Their potential competitors won't be able to say "your fat margins are my opportunity" because Amazon will be able to do all kinds of anti-competative things.

Thanks god we have laws that keeps monopolies in check but sometimes these laws can move quite slowly and the damage may not be possbible to repair. Like with the case with Mocrosoft and Google.

Re: Amazon Is a Monopoly

#242

Post by TheOtherHobbes »

dodobirdlord wrote: post #228
scarface74 wrote: post #187

Earlier quoted context omitted.

Isn’t that basically Adam Smith Capitalism 101 that any commodity good’s profit tends toward $0?

More or less. In a competitive system profit margins should trend downward. They won't necessarily reach 0 in the limit, because at some point you'll reach the point where everyone has something better to do with their resources than move into your market and undercut you (and you have no better prospect by undercutting anyone else). A profit margin of 0 is a stable equilibrium, but equilibria can also be reached whe…

This factoid has failed so many times it's astonishing it keeps being repeated. Any competitive system tends towards monopoly/oligoply. Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses, and - depending on the market - of customers.

There is no "moving into the market", because as soon as a market consolidates around one or $very_small_number of players, cost of entry and market capture make competition impossible. So competition ends.

This is where we are now with tech. It's basically impossible for anyone new to compete with Amazon, Google, Facebook, etc. It's also where we are with established players in other sectors such as Airbus.

The only two things that can break the logjam are government action to split up monopolists, and the invention of a new market space with a viably low cost of entry.

Re: Amazon Is a Monopoly

#244

Post by cyborgx7 »

amelius wrote: post #243

Richard Stallman has some thoughts on this topic: https://stallman.org/amazon.html

Stallman's biggest problem, in my opinion, is that all his proposed solutions are individual consumption choices. A beast like Amazon can only be tamed by collective action and regulation.

Re: Amazon Is a Monopoly

#245

Post by dominicr »

nickik wrote: post #235

No it is not. Unless you can't buy basically the same stuff from lots of other places this is simple the usual whining about 'big cooperations'. The reality is that amazon overs good prices and people like to shop there. And yes, suppliers are gone complain, that amazon is evil, just like suppliers complain that walmarket is evil, just as suppliers always claim whatever larger reseller they sell to is a evil monopoly…

What you're referring to is a 'pure' monopoly, which are relatively rare (but still common enough).

The wider use of definition in economics is a company that dominates a market to the extent that is has control over the market. For example, when suppliers have little actual choice in dealing with the company.

Higher prices are not necessarily a product of a monopoly and are not needed to define one.

Re: Amazon Is a Monopoly

#246

Post by nickik »

dominicr wrote: post #245
nickik wrote: post #235

No it is not. Unless you can't buy basically the same stuff from lots of other places this is simple the usual whining about 'big cooperations'. The reality is that amazon overs good prices and people like to shop there. And yes, suppliers are gone complain, that amazon is evil, just like suppliers complain that walmarket is evil, just as suppliers always claim whatever larger reseller they sell to is a evil monopoly…

What you're referring to is a 'pure' monopoly, which are relatively rare (but still common enough). The wider use of definition in economics is a company that dominates a market to the extent that is has control over the market. For example, when suppliers have little actual choice in dealing with the company. Higher prices are not necessarily a product of a monopoly and are not needed to define one.

Its actually now standard in anti-trust law now that you actually have to show significant consumer harm. Richard Posner writting has this made the standard in Anti-Trust.

In the past it was just politics and any big company could get hit with anti-trust. Presidents routinly used anti-trust to go after their political enemies.

And if you don't use this 'pure' definition you are essentially just saying 'this is a big company'. Every single large company would be a 'monopoly' by those definition.

Re: Amazon Is a Monopoly

#247

Post by dominicr »

nickik wrote: post #246
dominicr wrote: post #245

Earlier quoted context omitted.

What you're referring to is a 'pure' monopoly, which are relatively rare (but still common enough). The wider use of definition in economics is a company that dominates a market to the extent that is has control over the market. For example, when suppliers have little actual choice in dealing with the company. Higher prices are not necessarily a product of a monopoly and are not needed to define one.

Its actually now standard in anti-trust law now that you actually have to show significant consumer harm. Richard Posner writting has this made the standard in Anti-Trust. In the past it was just politics and any big company could get hit with anti-trust. Presidents routinly used anti-trust to go after their political enemies. And if you don't use this 'pure' definition you are essentially just saying 'this is a big…

The comment I was replying to was referring to the word's definition in economics, not the current legal standards of specific countries.

Re: Amazon Is a Monopoly

#248

Post by ernst_klim »

TheOtherHobbes wrote: post #242
dodobirdlord wrote: post #228

Earlier quoted context omitted.

More or less. In a competitive system profit margins should trend downward. They won't necessarily reach 0 in the limit, because at some point you'll reach the point where everyone has something better to do with their resources than move into your market and undercut you (and you have no better prospect by undercutting anyone else). A profit margin of 0 is a stable equilibrium, but equilibria can also be reached whe…

This factoid has failed so many times it's astonishing it keeps being repeated. Any competitive system tends towards monopoly/oligoply. Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses, and - depending on the market - of customers. There is no "moving into the market", because as soon as a market consolidates around one o…

> Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses

Not market mechanism, governments protecting big biz. Without legislative protection a monopoly doesn't last long, as Standard Oil example shows.

A typical cycle of crony-capitalism is: build big biz on a new market -> lobby heavy regulatory framework and a set of monopoly rights which make entering impossible for any new competitor -> push your shills in some agency like FAA, FCC or FDA -> enjoy your unconditional domination.

> The only two things that can break the logjam are government action to split up monopolists

This factoid has failed so many times it's astonishing it keeps being repeated. A century of anti-trust failures without a single example of a decent outcome, yet people still bring this up.

Re: Amazon Is a Monopoly

#249

Post by stale2002 »

TheOtherHobbes wrote: post #242
dodobirdlord wrote: post #228

Earlier quoted context omitted.

More or less. In a competitive system profit margins should trend downward. They won't necessarily reach 0 in the limit, because at some point you'll reach the point where everyone has something better to do with their resources than move into your market and undercut you (and you have no better prospect by undercutting anyone else). A profit margin of 0 is a stable equilibrium, but equilibria can also be reached whe…

This factoid has failed so many times it's astonishing it keeps being repeated. Any competitive system tends towards monopoly/oligoply. Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses, and - depending on the market - of customers. There is no "moving into the market", because as soon as a market consolidates around one o…

What is happening to prices in the online retail market?

Are prices high, or are prices so competitive, so low, so good for consumers, that competitors have literally been complaining about it for years?

Now, tell me again why you think prices aren't competitive?

Re: Amazon Is a Monopoly

#250

Post by amelius »

cyborgx7 wrote: post #244
amelius wrote: post #243

Richard Stallman has some thoughts on this topic: https://stallman.org/amazon.html

Stallman's biggest problem, in my opinion, is that all his proposed solutions are individual consumption choices. A beast like Amazon can only be tamed by collective action and regulation.

From his post:

> We should not allow a company to have a share over around 10% of any market. If in a certain field a single dominant company is beneficial for society, that means it is a natural monopoly, and should be served by a regulated utility.

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