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Washington state shuts down Amazon price-fixing program nationwide

atg.wa.gov

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Re: Washington state shuts down Amazon price-fixing program nationwide

#61

Post by Spivak »

clintonc wrote: post #53
yazaddaruvala wrote: post #33

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit,…

I am Amazon, and you sell cat mugs. I offer you a "sold by Amazon" contract, which you accept. I start manufacturing my own cat mugs, and sell them at a price that undercuts yours. You have no way to change your price, so your mugs no longer compete effectively with Amazon cat mugs. Most of your sales go away, because Amazon is so dominant as an online marketplace (NOT as a cat mug manufacturer). This is anti-competi…

How is this different from Kroger getting to set the prices of both Lay’s and their store brand chips?

Re: Washington state shuts down Amazon price-fixing program nationwide

#62

Post by NovemberWhiskey »

clintonc wrote: post #53
yazaddaruvala wrote: post #33

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit,…

I am Amazon, and you sell cat mugs. I offer you a "sold by Amazon" contract, which you accept. I start manufacturing my own cat mugs, and sell them at a price that undercuts yours. You have no way to change your price, so your mugs no longer compete effectively with Amazon cat mugs. Most of your sales go away, because Amazon is so dominant as an online marketplace (NOT as a cat mug manufacturer). This is anti-competi…

That doesn't make any sense to me.

If the argument is that Amazon is a dominant retailer and sells its own brand goods to dominate particular segments then exactly the same applies to, say, Walmart.

How does the "sold by Amazon" contract relate to that?

Re: Washington state shuts down Amazon price-fixing program nationwide

#63

Post by rbobby »

dgrin91 wrote: post #27
ghostly_s wrote: post #10

Why are regulators incapable of assessing meaningful punitive damages? 2.5 million is peanuts to Amazon.

Arguably the more important outcome than monetary damages is that the offending program is ceased. From the press release - > Amazon will shut down the “Sold by Amazon” program nationwide. So in principle the problem has been stopped. Now whether Amazon will make a new "Buy from Amazon" program in 5 seconds that will have slightly modified details is to be seen...

> Arguably the more important outcome than monetary damages

Every single consumer that bought a product from one of these third party sellers, or a matching product from Amazon, has been cheated out of several dollars. For each product, for each sale... that adds up to way more than $2.5 million.

And the funny part is that a few database queries could likely surface exactly who has been harmed, how many times, and a gross sale amount affected.

Easy proof for a class action?

Re: Washington state shuts down Amazon price-fixing program nationwide

#64

Post by [deleted] »

organsnyder wrote: post #37
valar_m wrote: post #9

Former Amazonian here. When i was there, they made us take this antitrust training course that had things like "don't use terms like 'market share' in internal communications", but all along there were people doing this? I mean...

> "don't use terms like 'market share' in internal communications" Sounds like the training was teaching you how to avoid leaving an audit trail rather than how to prevent illegal activity.

[deleted]

Re: Washington state shuts down Amazon price-fixing program nationwide

#65

Post by thaumasiotes »

clintonc wrote: post #53
yazaddaruvala wrote: post #33

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit,…

I am Amazon, and you sell cat mugs. I offer you a "sold by Amazon" contract, which you accept. I start manufacturing my own cat mugs, and sell them at a price that undercuts yours. You have no way to change your price, so your mugs no longer compete effectively with Amazon cat mugs. Most of your sales go away, because Amazon is so dominant as an online marketplace (NOT as a cat mug manufacturer). This is anti-competi…

Just to be clear, the difference from wholesaling is that in your example, Amazon has the right to set your prices, but it doesn't buy anything from you?

If Amazon actually buys your cat mugs, and then prices them higher than its own cat mugs, such that customers buy Amazon mugs and don't buy your mugs, you still sold all your mugs and there would seem to be no problem.

Re: Washington state shuts down Amazon price-fixing program nationwide

#67

Post by clintonc »

Spivak wrote: post #61
clintonc wrote: post #53

Earlier quoted context omitted.

I am Amazon, and you sell cat mugs. I offer you a "sold by Amazon" contract, which you accept. I start manufacturing my own cat mugs, and sell them at a price that undercuts yours. You have no way to change your price, so your mugs no longer compete effectively with Amazon cat mugs. Most of your sales go away, because Amazon is so dominant as an online marketplace (NOT as a cat mug manufacturer). This is anti-competi…

How is this different from Kroger getting to set the prices of both Lay’s and their store brand chips?

It would be the same, except

- Kroger isn't 50% of all grocery stores on earth

- Kroger paid money up front for your potato chips

- Kroger isn't charging you for storing your potato chips

Re: Washington state shuts down Amazon price-fixing program nationwide

#68

Post by ineedasername »

>participating sellers had limited, if any, ability to lower the price of their products without withdrawing the product’s enrollment in the Sold by Amazon program.

This sounds similar to how traditional retail works though: If company $A sells products through big box store $B, there may be an agreed upon price (Apple does this), but $B usually has discretion over pricing, and might stop carrying a $A's product if $A wants to sell elsewhere at a lower price. In this case the seller could still sell on Amazon, just not as an official Amazon-sponsored product. So I'm not sure how this reaches an anti-trust level when it appears substantially similar to normal retail sales. In fact in supermarkets it's not uncommon for the store to sell its own competing products-- the store brand-- which seems to fit the Amazon situation as well.

Re: Washington state shuts down Amazon price-fixing program nationwide

#69

Post by upsidesinclude »

skybrian wrote: post #46
urthor wrote: post #32

Earlier quoted context omitted.

That's actually surprisingly cunning. Run a very in depth training program on how "not" to do antitrust. Secretly, it's just a training course in antitrust. Gotta respect the level of commitment to evil.

It sounds like pretty ordinary corporate training. The idea is that you don’t want ordinary workers saying things that sound bad in discoverable messages, which is very likely if there is the ordinary amount of speculation about things they don’t really know about. Whether any particular thing actually is an antitrust violation is for the lawyers to decide. I guess they decided wrong?

No post body was provided.

Re: Washington state shuts down Amazon price-fixing program nationwide

#70

Post by throwaway889900 »

valar_m wrote: post #9

Former Amazonian here. When i was there, they made us take this antitrust training course that had things like "don't use terms like 'market share' in internal communications", but all along there were people doing this? I mean...

People pay attention in corporate training? I sure as hell don't.
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