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The FTC sues to break up Amazon over an economy-wide “hidden tax”

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Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#11

Post by hnuser847 »

The TL;DR is that the “hidden tax” is onerous advertising fees paid by third-party retailers to have their products appear high in search results.

I don’t really see the issue here, since this appears to be a win-win for both consumers and sellers. Consumers get the cheap stuff they want with free shipping, and sellers get access to hundreds of millions of customers and the volume of sales needed to survive in a low-margin business. The fact that sellers are willing to pay these fees suggests that’s it worth it for them to be on Amazon. If it wasn’t worth it, they would be somewhere else.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#12

Post by endisneigh »

It seems the government's main issue is that they have problems with companies being large. If that's the issue they should lobby congress to simply enforce some maximum size/impact a company has.

My opinion on this is that e-commerce is extremely competitive and consumers are already highly motivated to pay the least amount of money. If it were cheaper for consumers to go elsewhere they would, and sellers would follow.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#13

Post by hnuser847 »

koalaman wrote: post #6

This has been pretty obvious for a while. Whenever I do product searches on Amazon the prime eligible results are more expensive by exactly the shipping costs of the non prime vendors. The only reason I keep it is for the video service which I'm guessing is the same for a lot of people.

The “hidden tax” described in the article is to sellers, not consumers. Free shipping is subsidy for consumers that costs Amazon billions of dollars. I have personally never seen what you’re describing.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#14

Post by zb3 »

hnuser847 wrote: post #11

The TL;DR is that the “hidden tax” is onerous advertising fees paid by third-party retailers to have their products appear high in search results. I don’t really see the issue here, since this appears to be a win-win for both consumers and sellers. Consumers get the cheap stuff they want with free shipping, and sellers get access to hundreds of millions of customers and the volume of sales needed to survive in a low-…

You pay these fees so the products aren't cheap. And Amazon (using its size) made it impossible for sellers to sell their products cheaper elsewhere. This is anticompetitive.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#15

Post by globalnode »

hnuser847 wrote: post #11

The TL;DR is that the “hidden tax” is onerous advertising fees paid by third-party retailers to have their products appear high in search results. I don’t really see the issue here, since this appears to be a win-win for both consumers and sellers. Consumers get the cheap stuff they want with free shipping, and sellers get access to hundreds of millions of customers and the volume of sales needed to survive in a low-…

did you read it all? it claims the prices are higher due to the hidden tax and that amazon is price fixing by threatening to block 3rd party sellers if they sell at a more reasonable price elsewhere. this doesnt necessarily mean that consumers will get a better deal elsewhere but it is probably unhealthy to put all that price setting behaviour in the hands of one company.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#17

Post by thelastgallon »

An excerpt from: https://pluralistic.net/2023/04/25/greedflation/

Amazon binds its sellers over to something called Most Favored Nation status. That means that sellers can't offer their goods more cheaply than they do on Amazon – even if it costs them (lots) less to sell in Target or direct from their websites. This means that every time a seller adds a dollar to their Amazon sale price, they have to add a dollar to the price of their goods everywhere else, too.

After a bunch of state AGs filed lawsuits against Amazon over this, the company promised to cut it out.

They lied.

A new filing in California's suit against Amazon reveals that sellers live "in constant fear" of retaliation from Amazon if they allow their goods to be sold more cheaply elsewhere.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#18

Post by ryanwaggoner »

koalaman wrote: post #6

This has been pretty obvious for a while. Whenever I do product searches on Amazon the prime eligible results are more expensive by exactly the shipping costs of the non prime vendors. The only reason I keep it is for the video service which I'm guessing is the same for a lot of people.

That’s likely because the non-prime vendors have to lower their prices to match prime, or they wouldn’t sell much.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#19

Post by endisneigh »

elashri wrote: post #8
koalaman wrote: post #6

This has been pretty obvious for a while. Whenever I do product searches on Amazon the prime eligible results are more expensive by exactly the shipping costs of the non prime vendors. The only reason I keep it is for the video service which I'm guessing is the same for a lot of people.

> The only reason I keep it is for the video service which I'm guessing is the same for a lot of people. Which will start having ads unless you pay a fee for the ad-free experience starting next year [1] [1] https://www.npr.org/2023/09/22/1201028854/amazon-prime-video...

A more charitable take is that Amazon is raising the price (for the nth time) of prime, and introducing a small discount if you put up with ads.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#20

Post by bryanlarsen »

DannyBee wrote: post #10
bryanlarsen wrote: post #3

Earlier quoted context omitted.

Actually we don't. We just need the bureaucracy and judiciary to overturn the last 50 years of subversion of the original intent of the antitrust acts. The appointment of Lina Khan was a good first step on that path. This case is a good second step. But a new act would make the process a lot simpler. Judicial precedence is powerful and doesn't change quickly or easily. A new law would make precedence for the old law…

I'm gonna disagree - the original act from 1890, still used, had interpretation issues from the start, which all of the "subversion" you speak of comes from. It is a difference in how the text is read for sure, but the text is badly written. It says ""Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is he…

Sure, but my point is that we don't "need" a new act, as the OP states. All hope is not lost if we don't get one.

Bad precedence and an unclear act makes Lina Khan's actions very difficult, but not quite impossible.

The split nature of Congress, its showmanship and quorum rules make getting a new act very difficult, but not quite impossible.

We should be pursuing both paths in parallel.

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