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FTC sues Amazon for illegally maintaining monopoly power

ftc.gov

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Re: FTC sues Amazon for illegally maintaining monopoly power

#171

Post by pcurve »

jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

wow... that BB article makes me sad.

https://archive.ph/yw3Bv

In 2016, they collected 35.2%. In 2022, they collected 51.8% in fee.

That's insane.

Re: FTC sues Amazon for illegally maintaining monopoly power

#172

Post by seatac76 »

jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

Thanks for sharing your experience. Do you think Amazon dropped the planned fee they were going to charge for those sellers who don’t use prime, in anticipation of this suit? Would that have impacted you?

Re: FTC sues Amazon for illegally maintaining monopoly power

#173

Post by CuriouslyC »

tehlike wrote: post #85
crooked-v wrote: post #15

Earlier quoted context omitted.

Kirkland has a big difference here, in that it's a much better consistent indicator of quality than the Amazon house brands.

Probably true. But then feels like it's one or two tweaks away.

It might be, but Costco has a reputation for integrity, and it's not worth trading that for a few percent cost savings on generic items that aren't even a big portion of their bottom line.

Re: FTC sues Amazon for illegally maintaining monopoly power

#174

Post by binarymax »

lvl102 wrote: post #169
dvngnt_ wrote: post #116

Earlier quoted context omitted.

a competitor that owns and governs the platform you have to use is different from another 3rd party that you have to compete with

You don’t have to use them. That’s the point of my argument. No one’s stopping you from selling it using Shopify where you can set up an e-commerce store within a couple of hours.

The whole point of the case is to show that they control a monopoly. When there's a monopoly, you can't go anywhere else!

Re: FTC sues Amazon for illegally maintaining monopoly power

#176

Post by [deleted] »

crznp wrote: post #163
likpok wrote: post #109

Earlier quoted context omitted.

ATT, where apple hobbled other ad networks running on iOS. It used to be that DTC companies could use the fine-grained targeting offered by FB and Google to reach consumers without needing to go through a major distributor. Since the targeting is much less effective it's more expensive (potentially uneconomically so) to reach people. As a result, sellers are forced back to Amazon.

Lots of TLAs: ATT: Apple's App Tracking Transparency, not AT&T FBA: Fulfillment by Amazon, not related to FB DTC: Direct To Consumer, not Depository Trust Company

[deleted]

Re: FTC sues Amazon for illegally maintaining monopoly power

#177

Post by steveBK123 »

jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

I ran a small FBA business for a year nowhere near any scale and it was an interesting lesson. People who weigh in on these tech topics should actually try these things out to understand them better.

It's nothing like listing on eBay where there's some haircut off the top and that's that.

There are fees for - accepting inventory, holding inventory, returning unsold inventory, shipping sales, processing returns, destroying returns, transaction fees, ads to promote your listings in market, and probably 5 other things I forget. Depending on the fee it is - fixed, % of $, weight based, volume based, or some combination.

The fees change constantly with not much notice. So every time you think you've got just the right size/weight/price balance you get screwed. And where else are you going to go?

Like Uber drivers, I imagine some % of FBA sellers don't know they are losing money in real time. You need to do some decent accounting to track as all these different fees hit at different times. It's not like Amazon gives you the data & tools to track your all-in costs per sale.

Re: FTC sues Amazon for illegally maintaining monopoly power

#178

Post by ch4s3 »

rewmie wrote: post #95
ch4s3 wrote: post #56

Earlier quoted context omitted.

Neither is Amazon in e-commerce, they hold ~39% of the US market and their eCommerce growth lags behind total eCommerce with 9% and 10% respectively. Wal-Mart is at about 6.5% but had nearly 25% growth this year while capturing 36% of all eGrocery sales in the US. The only place where Amazon is even near 50% is in consumer electronics and office supplies. The eCommerce market as such has a very long tail and a lot of…

> Neither is Amazon in e-commerce, they hold ~39% of the US market and (...) From the link: > The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.

I obviously read the press release, but haven't read the 173 page complaint yet. But the piece about pricing is DEAD wrong.

The complaint says:

> Amazon uses a set of anti-discounting tactics to prevent rivals from 24 growing by offering lower prices,

But Amazon's contracts with big sellers specifically state that it may only discount when competitors first lower prices, making it in effect a price follower.

It goes on to say:

> Amazon deploys a sophisticated surveillance network of web crawlers that constantly monitor the internet, searching for discounts that might threaten Amazon’s empire. When Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same product on Amazon, Amazon punishes that seller

Which belies the fact that when you sell on Amazon you agree not to offer lower prices in other places. This is simply Amazon enforce one end of the two way part of the contract. Amazon agrees not to unilaterally slash your prices and you agree not to discount behind their backs. But you aren't as an eCommerce seller obligated to do business with Amazon, they don't have sufficient market share for that.

Furthermore, this statement is specifically false:

> By taming price cutters into price followers, Amazon freezes price competition 11 and deprives American shoppers of lower prices

Amazon is the price follower. If Wal-Mart offers a discount, so will Amazon. If B&H Photo discounts a camera, so will Amazon. The FTC is using sleight of hand here.

I just don't find their arguments here to be very compelling. I'm not against monopoly enforcement, but I just don't see how Amazon actually has the pricing power they're claiming.

Re: FTC sues Amazon for illegally maintaining monopoly power

#179

Post by kozd »

abduhl wrote: post #161
cratermoon wrote: post #96

Earlier quoted context omitted.

> It is not if you cannot prove that the price that the customer pays is now higher. That's according to a peculiar interpretation of anti-trust law. “Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer price…

It’s strange to call the most prominent view (and the one applied by courts currently) a “peculiar” interpretation. Lina Khan is the one with the “peculiar” view right now. The consumer interest test is preferred because, among other reasons, it is quantitative. Quantitative tests are seen as less able to be abused because some judge has a particular view/vibe. Additionally, the consumer harm test focuses on the cons…

Isn't the issue here short term vs long term consumer interest? It's all fine and dandy for consumers to pay lower prices because company A is eating losses to drive company B out of business but what happens after that.

Re: FTC sues Amazon for illegally maintaining monopoly power

#180

Post by chx »

munk-a wrote: post #25
hightrix wrote: post #11

Earlier quoted context omitted.

Exactly. I prefer Amazon Basics to YAYWOWND brand every day. It is one of the few brands on Amazon you can count on to not be Chinese crap. Even if it is made in China, the Amazon Basics products are generally good quality.

I think it's slightly better than but just slightly. Amazon Basics within my company has earned a reputation for being extremely fragile crap that will break quickly and, occasionally, dramatically. I have had absolutely awful experiences with their surge protectors. But yes - it's a step up from YAYWOWND which is a company that probably didn't exist last week and almost certainly won't exist in a month when their pr…

The /r/usbchardware subreddit used to recommend AmazonBasics cables because they are USB IF certified https://www.usb.org/single-product/728 but lately... https://www.usb.org/products the entire company is gone. https://i.imgur.com/qFzHbvP.png It also used to be you could use the ASIN to search for it... you can't now.
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