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Amazon Is a Monopoly

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Re: Amazon Is a Monopoly

#301

Post by specialist »

dredmorbius wrote: post #288
tim333 wrote: post #258

It's not a monopoly under the dictionary definition: >the exclusive possession or control of the supply of or trade in a commodity or service. It is maybe under the Sherman Act: >“Monopoly power” is generally understood to mean “the power to control prices or exclude competition”. I wish when people use words in a different way to the dictionary meaning they'd say so. Otherwise it leads to a whole lot of pointless "O…

"Monopolization Defined" The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any mark…

I support their emphasis on anti-competitive behavior. Versus the Borkian focus on just consumers.

(How would "the market" know the fair price without healthy competition?)

Someone (you? chubot?) previously equated laissez faire with pro-monopoly. Facepalm. Terrific insight, framing.

Re: Amazon Is a Monopoly

#302

Post by ggg3 »

stcredzero wrote: post #84

being a monopoly on its own is not illegal under the antitrust laws. Illegal monopolization requires both 1) monopoly power and 2) that the firm acquired, enhanced, or maintained that power by using exclusionary conduct. Exclusionary conduct includes things like predatory pricing, exclusive agreements, refusing to deal with a company, most-favored nation clauses, designing your product or service in a way that exclud…

Yes. antitrust law is exactly about having a moat (exclusionary conduct) and more than some pct of the market (monopoly power).

Re: Amazon Is a Monopoly

#303

Post by thedaemon »

arkh wrote: post #229
Alupis wrote: post #121

Earlier quoted context omitted.

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.

> A huge share of people shop exclusively on Amazon People should ask why. Is it the prices? No. Is it the discoverability? No. It's because when you have a problem with whatever you bought you get reimbursed. No "call Samsung hotline", no "we'll add this totally not free warranty package in your cart".

You are incorrect. As someone who has used Amazon, I have never returned anything or been reimbursed.

Re: Amazon Is a Monopoly

#304

Post by coliveira »

ernst_klim wrote: post #285
skinnymuch wrote: post #279

Earlier quoted context omitted.

It’s disingenuous to do faux ignorance by acting like you don’t know what I roughly meant when I said everyone. You know I wasn’t talking about your local cafe. Or even a $10M/year company.

> It’s disingenuous to do faux ignorance by acting like you don’t know what I roughly meant when I said everyone. You know I wasn’t talking about your local cafe. Or even a $10M/year company. Then articulate your point more clearly. Sure, many the American megacorps are using the government for their own sake. That's exactly proving why US is such a crony state, where big corps are protected from competition by a hug…

You point is moot because there is no capitalist society where big companies will not interfere with government. If government is too big, they will lobby the government. If government is too small/inexistent, they will run monopolies by direct financial control and other "standard" practices: buying out competitors, collusion, threats of violence.

Re: Amazon Is a Monopoly

#305

Post by parasubvert »

nine_k wrote: post #160
parasubvert wrote: post #156

Earlier quoted context omitted.

Re-investment for the long term is government subsidized growth? That's a new one. I have to disagree pretty strongly that this is a distortion of anything, it's capitalism 101 in the face of a progressive corporate profit tax. If the US government wants to tax all business activity regardless of profit, they can do what the rest of the Western world has done and introduce a VAT. Amazon is otherwise doing a masterful…

They are financed by investors initially, and are not paying back in cash. They re-invest their profits, in other words, keep them to themselves. The investors are paid back by the rising stock, which means by more investors who want to buy the stock and raise the price by their demand. This is indeed brilliant, and overpowers any org that needs to return part of its profits back to investors, lenders, etc.

Not paying a dividend in favour of being a growth stock is an old play... Microsoft famously took 28 years to begin paying a dividend (2003).

Re: Amazon Is a Monopoly

#306

Post by liara_k »

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…

That's true in general now. Particularly in industries with high capital intensity, network effects, and/or monotonically increasing returns to scale. But that's a LOT of modern industries.

It wasn't always that way... or, at least, not for such a large proportion of the economy. The problem is that economic models and resulting policy is still based on assumptions that, due to technological change, no longer hold. The logic is usually sound, but the assumptions are ridiculous (see, e.g., abuse of the Coase Theorem).

It's far past time to re-evaluate this perspective, but we keep running into that Upton Sinclair quote: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

Re: Amazon Is a Monopoly

#307

Post by dredmorbius »

specialist wrote: post #301
dredmorbius wrote: post #288

Earlier quoted context omitted.

"Monopolization Defined" The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any mark…

I support their emphasis on anti-competitive behavior. Versus the Borkian focus on just consumers. (How would "the market" know the fair price without healthy competition?) Someone (you? chubot?) previously equated laissez faire with pro-monopoly. Facepalm. Terrific insight, framing.

Looks like I've made similar points at least a couple of times:

https://hn.algolia.com/?query=dredmorbius%20laissez%20faire%...

https://news.ycombinator.com/item?id=11677735#11681574

https://news.ycombinator.com/item?id=8261411#8278705

What I'd just (re?) realised is that the term laissez faire itself originated with Quesnay, though arguably in a different context -- he was arguing against merchantilist tarrifs and protectionist practices.

I've been pursuing the old question of cui bono in looking at the situation of market and financialised commerce, as opposed to other systems (communal, tribal, feudal, socialist). No firm conclusions though it's an interesting inquiry.

Re: Amazon Is a Monopoly

#308

Post by hobofan »

laughinghan wrote: post #161
blairanderson wrote: post #120

I run a consulting company for Amazon suppliers. We have roughly 2-dozen Amazon suppliers and our first-hand experience is that Amazon is absolutely stifling competition/business to the detriment of customer. The biggest problem is `agreements that restrain trade` is a monopoly practice that happens across the board. They're a black box AND have tiny support systems for their marketplace. One recent example. A client…

What does "Amazon won't accept" mean? Doesn't Amazon just show the lowest price of all its current suppliers, and if the current lowest-priced supplier runs out, it shows the next lowest price? (No fan of Amazon here, just trying to understand what you're saying.)

For marketplace sellers, yes that's the rough gist. There are however many more factors: seller rating, shipping speed, whether the fulfillment is done by Amazon, and a few hidden ones.

Source: Have built price optimization software for Amazon Marketplace sellers in the past

Re: Amazon Is a Monopoly

#309

Post by AnthonyMouse »

chumali wrote: post #255
AnthonyMouse wrote: post #184

Earlier quoted context omitted.

> Amazon has the power to do both. No they don't. If Amazon significantly raises prices it charges customers, or lowers prices it pays suppliers, to above/below what Walmart or a hundred others do, are the customers and suppliers going to stay with them? No. When they don't put you in their store, can they also prevent you from reaching the same customers through any other store? No. The fact that they can choose not…

This is a ridiculous argument, Amazon clearly has substantial market power which can be used to reduce the exposure of their suppliers [1] (the loss in exposure means there a significant costs associated with suppliers moving to another platform/store - the very definition of market power). Comparing them to the mom and pop coffee shop is absurd - unlike the coffee shop, there are not hundreds of Amazon competitors t…

> unlike the coffee shop, there are not hundreds of Amazon competitors that you can sell your product through

There are though. Not only major ones like Walmart, eBay, Esty, Target, Craigslist, etc., but the fact that anyone can create their own website and then get customers through price comparison sites by having the most competitive prices. On top of which, brick and mortar retailers can reach the same customers for most products, and there are a zillion of those you can sell through, or a slew of wholesaling companies that will do the retail distribution work for you.

That's assuming you're manufacturing the products; if you are the wholesaler then what did you think your job was? It's to negotiate with lots of retailers to buy through you. "I want Amazon to provide 100% of the value but I still make money and never get cut out" is not a sound business model.

> the loss in exposure means there a significant costs associated with suppliers moving to another platform/store - the very definition of market power

You can set up with eBay in like an hour, probably the same for most others. It would be more if you have a lot of different SKUs, but that implies you're doing more volume and it's still a small fraction of your total costs.

Re: Amazon Is a Monopoly

#310

Post by dwyerm »

arkh wrote: post #229
Alupis wrote: post #121

Earlier quoted context omitted.

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.

> A huge share of people shop exclusively on Amazon People should ask why. Is it the prices? No. Is it the discoverability? No. It's because when you have a problem with whatever you bought you get reimbursed. No "call Samsung hotline", no "we'll add this totally not free warranty package in your cart".

Agreed. The prices are meh. The discoverability is terrible and seemingly getting worse. I even feel like the customer service is also screaming downhill. Still, I'm nearly exclusive with Amazon because I give them money and they send me product, and there's no friction in that exchange.

Consider for comparison my recent experience purchasing a wedding gift from Bed Bath and Beyond. They had done everything right to capture my purchase: They hosted the wedding registry, kept the new couple's address hidden, and by not allowing me to select "I'm buying this somewhere else" made it difficult for me to get the item cheaper from another retailer.

Despite all of that, I still abandoned the cart and came back to Amazon. BB&B requires Verified By Visa, and I require my credit card provider to not be stupid about security, so my card was declined with no recourse.

Mind you, Amazon has declined my payment before, too. But they only did it once, more-than paid for their mistake, and haven't troubled me since.

Amazon is a monopoly like Visa and Mastercard are monopolies. They enrich themselves while facilitating commerce. While I'm uncomfortable with that power they hold, I wouldn't want to be without it.

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