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

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

#121

Post by endisneigh » Wed, Oct 04, 2023, 2:00 PM UTC

Jensson wrote: post #114

endisneigh wrote: post #104

Earlier quoted context omitted.

You can lower the product for 5% on both your site and on Amazon. Since Amazon makes up the plurality of your sales you gain more sales both there and on your site. Everyone wins except for you, and such is the life of race-to-the-bottom e-commerce sales. What I'm describing is already what happens, by the way. Look at Anker for an example.

> Everyone wins except for you Which is why your scenario here wont happen. Thanks for clarifying so well why your argument "there is no consumer harm" is bullshit, what you said here means you know that what Amazon does here increases prices.

The consumer is Amazon’s end customer, not the seller. Amazon sellers can and do take a loss to sell on Amazon, and ultimately the seller's fate is of no concern to Amazon. Again, they don't have to sell on Amazon to begin with. I buy plenty of bike parts, for example directly on their site and they're not even offered to Amazon to begin with.

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

#122

Post by EGreg » Wed, Oct 04, 2023, 2:01 PM UTC

Jensson wrote: post #31

endisneigh wrote: post #21

Earlier quoted context omitted.

I don't see the problem with this. They don't have to sell on Amazon to begin with. Amazon obviously wants their customers to have the best price available. Sellers can just go off Amazon if they don't like it. If sellers end up raising the price on other platforms as a result of this rule, then that says more about them than Amazon. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and…

It is none of Amazons business what prices they put when they list their wares on other services, the only reason they care is that they want to crush the competition. Dictating how retailers can interact with your competitors is anti-competitive. Dictating what prices they can offer when they put up listings is a part of that, it is anti-competitive.

To be fair, every single wholesaler operates this way.

I have personalky spoken to wholesalers who sell widgets X (lighters etc) to retail stores.

If the retail stores undercut everyone else and drop the price below MSRP, they will exclude them in the future. There is centralized price control even though the retailers are free to do what they want.

That is done by auto dealers and anyone else who does MSRP. The difference is that they are still competing in that product category. Amazon on the other hand is a platform that stands BEHIND them. This leads to an emergent price cartel, just like in the propu lica piece on NYC real estate:

https://magarshak.com/blog/?p=385

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

#123

Post by fallingknife » Wed, Oct 04, 2023, 2:02 PM UTC

globalnode wrote: post #15

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.

That doesn't really sound like price setting power. They are saying you can set whatever price you want, but it has to be the same as other sales channels.

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

#124

Post by dwallin » Wed, Oct 04, 2023, 2:02 PM UTC

endisneigh wrote: post #104

dwallin wrote: post #94

Earlier quoted context omitted.

You are a seller. Amazon makes up 40% of your sales. You have your own first party website where you can profitably offer your product for 5% less and still make an additional 10% profit but it only makes up 5% of your sales currently. What's your move in this position? You can't just imagine all companies as perfect frictionless spherical interchangeable cows. In reality companies as large as Amazon can have signifi…

You can lower the product for 5% on both your site and on Amazon. Since Amazon makes up the plurality of your sales you gain more sales both there and on your site. Everyone wins except for you, and such is the life of race-to-the-bottom e-commerce sales. What I'm describing is already what happens, by the way. Look at Anker for an example.

Great, you gain more sales and immediately go out of business since you were already pricing your product near cost.

Prices then rise back up as your nearest competitor was smart enough to not lower price below their cost.

Or do you somehow believe that price competition currently only exists everywhere EXCEPT on Amazon's platform?

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

#125

Post by abirch » Wed, Oct 04, 2023, 2:02 PM UTC

proamdev123 wrote: post #81

abirch wrote: post #22

Earlier quoted context omitted.

I agree with you. I quit using Amazon late last year and it's pretty easy to change to different vendors. Hopefully more consumers do this so that vendors don't have to use the Amazon price everywhere else on the internet.

Where do you shop online now for things that you used to buy on Amazon? Have you found any unexpected pros or cons from going to alternative online stores? I’m not planning to leave Amazon, but I’d love to find good alternatives.

For smaller things I use Target. I rely more on Costco as well (versus Amazon's subscribe and save)

For more niche items I buy in bulk from different the manufacturer's site. To be honest it's a little more work but to help retailers it's worth it. Sometimes I have to pay for shipping but I do remember that I'm saving 130 dollars a year by not being Prime.

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

#126

Post by cedilla » Wed, Oct 04, 2023, 2:03 PM UTC

endisneigh wrote: post #21

thelastgallon wrote: post #17

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…

I don't see the problem with this. They don't have to sell on Amazon to begin with. Amazon obviously wants their customers to have the best price available. Sellers can just go off Amazon if they don't like it. If sellers end up raising the price on other platforms as a result of this rule, then that says more about them than Amazon. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and…

It does the opposite - it prevents the price going lower than cost plus Amazon fees.

Amazon is not exactly cheap for sellers, so the price has to go up everywhere.

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

#127

Post by lazide » Wed, Oct 04, 2023, 2:06 PM UTC

jprete wrote: post #85

ct0 wrote: post #42

Earlier quoted context omitted.

Just change the SKU of the product so they are "different". Big box stores do it all the time to reduce the probability of price matching.

Amazon is not a court of law and need not be bound by this technicality.

Courts also are not bound by technicalities like this typically!

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

#128

Post by fallingknife » Wed, Oct 04, 2023, 2:06 PM UTC

bryanlarsen wrote: post #3

jncfhnb wrote: post #2

We need a new act that explicit addresses platform economics antitrust.

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…

Maybe if they weren't going after FAANG exclusively I could take this seriously and not think it is entirely politically motivated BS. ISP monopolies are 10x more harmful than anything they are going after. They have even taken subsidies and then refused to deliver what they promised to get the subsidy, and kept the money. But all I hear about is cases against Google and Amazon for things that sound to me like a real legal stretch.

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

#129

Post by hnuser847 » Wed, Oct 04, 2023, 2:06 PM UTC

zb3 wrote: post #14

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.

> You pay these fees so the products aren't cheap.

Except they are, otherwise consumers wouldn't use Amazon. Whenever I want to buy anything, I check Amazon first. 9 times out of 10 it's the same price as every other retailer with the added benefit of free shipping and free returns. If that wasn't the case, I would have no reason to use Amazon.

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

#130

Post by brookst » Wed, Oct 04, 2023, 2:07 PM UTC

endisneigh wrote: post #21

thelastgallon wrote: post #17

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…

I don't see the problem with this. They don't have to sell on Amazon to begin with. Amazon obviously wants their customers to have the best price available. Sellers can just go off Amazon if they don't like it. If sellers end up raising the price on other platforms as a result of this rule, then that says more about them than Amazon. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and…

I'll take the charitable interpretation and assume you just don't understand the mechanics of the policy.

Amazon is saying that sellers cannot offer a fair low price to customers on other platforms if the seller can't also offer it on Amazon. This is 1) anticompetitive, 2) anticonsumer, and 3) insane.

Consider this test:

- Seller buys a crappy LED bulb from China for $0.80

- Seller is happy to list the bulb on Walmart, Target, etc, for $2.00. Net of fees and shipping and stuff they make enough money

- Amazon charges $3 in fees. Obviously the seller can't afford to sell for $2 on Amazon. They sell for $5 instead.

- However, now the seller also can't sell for $2 on competing sites. Amazon, leveraging its market share, has dictated that the seller must price Amazon's fees into pricing on non-Amazon sites, so consumers pay $5 to Target for something the seller would have been happy getting $2 for.

This is insane.