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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”

#131

Post by rk06 »

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-…

Nope, the core issue is Amazon has monopoly on advertisement and distribution. And Amazon is abusing it to suppress competitors.

Consider the scenario:

Amazon executive want more bonus, so they decide to increase retailer prices by 10x.

Now, retailers cost have increased for Amazon by 10x. But other distribution channels remain the same.

So, retailers should increase prices on Amazon only. But Amazon forces them to increase prices everywhere.

This interference of Amazon on other business is the issue

Amazon sees that it's profit is lower

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

#132

Post by speff »

endisneigh wrote: post #93
Jensson wrote: post #91

Earlier quoted context omitted.

For b2c monopolies matters, for b2b it is enough to be a dominant player to engage on a lot of harmful anti-competitive practices. This is a b2b situation that harms consumers, in that situation it doesn't matter that there are competitors, what matters is how much power Amazon has over vendors.

I disagree. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and others do the same thing. The result is the lowest price for a given product on all sites. This is unquestionably good for consumers.

This is very short sighted. Lower prices inevitably come at a cost to quality. Normally this is corrected for in physical stores (you can see if something looks cheap), but it's not so easy with online shops. So yea, everything's cheap now because Amazon/Walmart/Temu and the like drove prices into the ground, but it's also all garbage. And the quality alternatives? Mostly gone because consumers flocked to cheap products.

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

#133

Post by justinator »

EGreg wrote: post #117
oblio wrote: post #113

Earlier quoted context omitted.

More than that... there's probably no real recourse. For the same reason you mentioned.

The real solution is an open source Amazon. What happened to Magento? Does it have any traction? Why sell on Amazon instead of your own site? Can’t competitors to FBA spring up that have great logistics? Are there any? Can anyone link me to them?

Magento was badly designed- infinite levels of directories. Good luck on upgrade. There’s plenty of self hosted online stores. That’s hardly the problem.

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

#134

Post by cmrdporcupine »

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…

Hasn't WalMart been doing the same thing for decades, but in bricks & mortar retailing?

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

#136

Post by satvikpendem »

EGreg wrote: post #117
oblio wrote: post #113

Earlier quoted context omitted.

More than that... there's probably no real recourse. For the same reason you mentioned.

The real solution is an open source Amazon. What happened to Magento? Does it have any traction? Why sell on Amazon instead of your own site? Can’t competitors to FBA spring up that have great logistics? Are there any? Can anyone link me to them?

This is a classic programmer response. The problem is not Amazon's software, it's their marketing, distribution network, huge audience that searches for products exclusively via Amazon, "free" and very fast Prime deliveries, etc. That doesn't all happen via simply open sourcing some code.

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

#137

Post by distances »

endisneigh wrote: post #76
someonehere wrote: post #54

What does breaking up Amazon look like? I’m genuinely curious because half the comments I see in here are “break up Amazon!” or “break up FAANG!” What does that look like? What would Amazon look like if broken up? In the end we all know lobbyists from Amazon will somehow influence their outcome.

It doesn't really matter because Amazon isn't going to be broken up to begin with.

I think you made your position clear enough already in the other threads.

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

#138

Post by Cerium »

ezfe wrote: post #99
someonehere wrote: post #54

What does breaking up Amazon look like? I’m genuinely curious because half the comments I see in here are “break up Amazon!” or “break up FAANG!” What does that look like? What would Amazon look like if broken up? In the end we all know lobbyists from Amazon will somehow influence their outcome.

Here are some possibilities (not claiming these are practical or a solution): The first is splitting Amazon-retail from their other products (Alexa, Ring, AWS, etc.) The second is splitting Amazon-logistics out. I'm not exactly sure how this would work, but it could be argued that Amazon logistics could operate standalone.

FBA as a separate business would be interesting for sure. It would separate out the value of Amazon marketplace from the value of outsourcing your order fulfillment logistics.

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

#139

Post by endisneigh »

brookst wrote: post #130
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…

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 Walmar…

I disagree.

Let's use your example. The sellers should stop selling that item on Amazon, and sell their light bulb on Walmart, or where-ever. Customers who really need that will go find it at Walmart, or where-ever. This strengthens the competitors to Amazon, which is bad for Amazon and good for the consumer. The consumer also find the lower price that they wanted. Alternatively, they buy the alternate product on Amazon which would be cheaper than the inflated price (per your example). Again, good for the customer. Everyone wins in every scenario except for the seller, which is how Amazon and every wholesaler operates.

Suppose the FTC wins this case and sellers can put whatever price on whatever site. Amazon, like any store wants the lowest price. Not to mention there are only some many items you can show on the first page of results. They will find some other reason to remove these sellers and/or their items.

Now maybe there's another case to stop that behavior too. The result is that companies are not obligated to let sellers on their site. That is insane.

In summary, there will never be a scenario where Amazon allows sellers to sell the exact same item for more than Amazon's competitors, unless the government forces Amazon to let sellers sell whatever on their site.

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

#140

Post by LunaSea »

proamdev123 wrote: post #73
Jensson wrote: post #31

Earlier quoted context omitted.

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.

> It is none of Amazons business what prices they put when they list their wares on other services… It is literally Amazon’s business to offer pricing at equal to or better than their competitors. > …the only reason they care is that they want to crush the competition. Every company wants to beat their competition, and many (most?) want to “crush” their competition. Don’t you think Target wants to crush Amazon? Don’t…

> It is literally Amazon’s business to offer pricing at equal to or better than their competitors.

For their own products they can.

For third-party items, Amazon is free to lower their margin.

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