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Amazon scooped up data from its own sellers to launch competing products

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Re: Amazon scooped up data from its own sellers to launch competing products

#111
post #96

Earlier quoted context omitted.

What really is the issue? That Amazon is leveraging its success to be successful? It's unfair that Amazon is able to see that a product category is doing well so it invests its own money into manufacturing a product to sell through its site? Do you really think that if Amazon couldn't use the data from its own site that it wouldn't procure it elsewhere? Before any product is developed there is extensive market resear…

It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another. Amazon may or may not legally be a retail monopoly - I do not know the answer. But your question can be rephrased for any monopoly and the answer would be “monopolies should be punished for leveraging their monopoly power in other markets, because that ruins the market for everyone els…

> It is not illegal to have a monopoly; but it is illegal to use a monopoly you have in one area to get an unfair advantage in another.

This is a very common misconception in the United States. It’s how a lot of defenders of antitrust law want antitrust law to work, but it is not how antitrust law does work.

This Supreme Court case explicitly establishes that antitrust laws can be used against companies which obtain a high market share simply by anticipating future demand and responding effectively and efficiently.

https://en.wikipedia.org/wiki/United_States_v._Alcoa

Re: Amazon scooped up data from its own sellers to launch competing products

#113

Is this any different than what other stores do with their own store brands?

Because it amounts to IP theft. It's one thing to see that unbleached toilet paper is selling well, and getting a supplier to sell you a store brand version. But it's completely different to see that a particular office stand is selling very well, determine that it has a 20% margin, and have someone build an identical product which you sell 5% margin. If you look at many Amazon Basics products, they are clear ripoffs…

In what way does Amazon know the backend margins that any other store wouldn’t?

They don’t. Amazon isn’t being asked to produce a product for a vendor then taking that and selling it themselves, that would be wrong. This is Amazon doing exactly what other stores do, seeing what sells well and making their own version.

Re: Amazon scooped up data from its own sellers to launch competing products

#114

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

that solves the problem for suppliers, but creates one for consumers with lower competition. Less competition, higher prices. *just noticed I was down voted, likely by MichaelApproved because he has 7500 Karma and I only have 156. I'm starting to really hate contributing to HackerNews discussions because it's fully of a bunch of bullies who pound on your karma if you don't agree with their viewpoints. Bring on the do…

> that solves the problem for suppliers, but creates one for consumers with lower competition. Less competition, higher prices.

How so? Amazon is the one reducing competition, stopping Amazon from doing that would increase competition. That's a good thing for consumers.

Re: Amazon scooped up data from its own sellers to launch competing products

#115
post #81

every major retailer has store brands, and I fully expect they all use their sales data to inform their generic products business, and all of their suppliers expect that too. As a consumer, I like that Amazon is upfront about what products come from their brand. Good luck browsing through the plumbing and electrical fixtures at Home Depot or Lowes and figuring out what crappy store brand stuff and whats not.

> figuring out what crappy store brand stuff and whats not. Don't they usually have only one store brand? Or maybe two, if there's a premium option? I don't think I've ever questioned which is the store brand. I know I've questioned which non-store brands are of dubious origin though (e.g., knockoffs)

My experience has been that they have multiple house brands in each department, and they are different in each department.

Re: Amazon scooped up data from its own sellers to launch competing products

#116
post #72
post #62

Earlier quoted context omitted.

Different problems. One is the regulation of which suppliers can distribute on a platform, deceptive advertising, right-to-repair, and similar consumer protection considerations. The other problem the article and parent comments are describing relates to the distributor/retailer creating or sourcing generic alternatives to the items sold by their existing suppliers and informing their decisions to do so based on the…

What's your evidence that we get better outcomes for consumers?

Good question. Actually I don't have any data for that. Anecdotally many "store brand" items of things that seem commodity-like, are things that I can get the same quality as a name brand at a lower price. This is better for me, and I suspect better for most consumers in a static situation. But the market is dynamic. Does this stifle innovation of new products? Does the reduced revenue of "brand" named producers, especially smaller ones hurt? Does the price competition produce a race to the bottom that ultimately doesn't benefit consumers? I don't know. But I would say that the considerations of increased regulations of "generics" vs increased regulation of "online markets" seem to me to involve different tradeoffs.

Re: Amazon scooped up data from its own sellers to launch competing products

#117

Stating the obvious I guess. All retailers do this and create their own white-label brands to squeeze profit from well-performing categories. Target, for instance, is very upfront about it and they have like a gazillion white-label brands that compete in hundreds of categories, which makes it very gray for the customer. Does anyone really think that any retailer launches a competing product in a category without look…

I really don't think Target is that upfront. How am I supposed to know Mossimo and Goodfellow are Target brands. I do however understand that Kroger groceries are made by the kroger store.

Upfront with the suppliers. Not necessarily with the customers.

Re: Amazon scooped up data from its own sellers to launch competing products

#118
post #85

Stating the obvious I guess. All retailers do this and create their own white-label brands to squeeze profit from well-performing categories. Target, for instance, is very upfront about it and they have like a gazillion white-label brands that compete in hundreds of categories, which makes it very gray for the customer. Does anyone really think that any retailer launches a competing product in a category without look…

This is the same situation that happens on most platform plays. You can see this in how Salesforce and Shopify are leveraging their platforms to learn what is popular and produce/buy their own products to sell to their customers to capture 100% of the value, rather than 30% of the value of the solution to the customer.

I think the biggest issue isn't the "copy product by leveraging data", but more like, their products play by a different set of rules.

They could copy products and launch them abiding by the same guidelines, policies and everything else.

That's not the case, and that's where the unfairness comes to play: Amazon plays on their market place by a different set of rules.

It's not only Amazon. Google, Apple, and so on. The question starts to arise, if they want such massive platforms and play on such marketplaces, they must obey their own guidelines, else they are either stripped from the playground or someone else should own the play ground.

Re: Amazon scooped up data from its own sellers to launch competing products

#119
Quick link to AmazonBasics

https://www.amazon.com/s?rh=p_89%3AAmazonBasics

I am happy to buy these products over generics because of the higher quality. Batteries, paper shredders, water filters, electronics accessories, household supplies, office products...

Re: Amazon scooped up data from its own sellers to launch competing products

#120
post #80

Earlier quoted context omitted.

The alternative to introducing this regulation is not going to a system with no regulation, it's continuing with the current framework where Amazon is actively driving competition out of the market. Opposing this regulation without an actual alternative is just defending the status quo.

If the free market has overly concentrated power in a party, the solution is to create competition by dividing that party.

Isn't that exactly what MichaelApproved said?
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