While they are at it they should also go after the credit card companies. They have managed to extract a 2-3% tax on most retail transactions. There is really no reason why the fees should be that high in the age of electronic transactions.
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”
#222An 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'm curious... how far does Amazon's MFN policy extend?
For example, let's say I independently decide to import an item from company X and sell it only on a Shopify site for a lower price than company X's items listed on Amazon. Will Amazon exert pressure on company X to stop shipments to me or impose a minimum sale price policy simply because company X's products are available elsewhere cheaper than on Amazon?
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#223I fear a negative decision against Amazon so much more than other big tech. Amazon's offering is so far and beyond all their competition, I'd hate for the government to kill any future innovation they have.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#224I don't understand why you would "Break-Up" Amazon? Why can't we just have common rules that says "Hey, we will fine you $50M a day you continue to do X,Y,Z?". Then we have precedence and law to back up doing monopolistic things. How does breaking a company work? I mean... we broke up Microsoft and that only slowed them down for a few years.
When was Microsoft broken up? I remember the Microsoft was sued for anti competitive behavior but nothing of consequence happened. https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor... .
Yeah, the breakup was overturned on appeal, and the resulting settlement was watered down into "we'll reduce the number of tentacles between Windows and IE".
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#225Earlier quoted context omitted.
You don’t just “spring” up to owning a nationwide network of distribution centers and 1M+ employees. It takes decades of work.
That's the thing people don't get about making competitors to Facebook, Twitter, and other centralized platforms as well. You don't need to boil the ocean in order to serve a single community. For example, Facebook started in Harvard and its value to everyone in Harvard was based on how many people in Harvard used it, not how many people in the world used it. Similarly, if a single product vendor and their customers…
You are correct, but note that one very key edge that Amazon used to as a competitive edge is no longer available to new entrants in the business. For the first 15 to 20 years of Amazon, they were able to be cheaper than their competitors due to the fact that sales tax only had to be collected in states where they had a nexus.
This gave them a pricing advantage which drove more customers to them which they intelligently plowed back into the business in building out their own network, no small feat of course.
A newer competitor would no longer have access to that simple sales tax advantage, and so would have to find something else to compel customers with. Barring that, Amazon/Walmart/Costco/Target/Home Depot/Lowes/Best Buy are tough to compete with because they already offer rock bottom pricing and they don’t have to invest in a ton of new infrastructure for logistics.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#226Earlier 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's exactly their business. Amazon is going to use the limited "shelf space" to promote and highlight those products which are most likely to sell (and to generate best margins). If a product is for sale for less elsewhere, it's less likely to do so, so why should Amazon waste the "shelf space"? This is no different than what non-e-commerce stores (such as Walmart) have been doing for years.
Amazon doesn’t need to promote every single item they sell and it would be meaningless for them to do so. They have a long tail of items which rarely sell and only show up on very specific queries disproving any kind of limited shelf space argument.
As a simple practical manner a small manufacturer can more cheaply sell products at their factory than the overhead of selling through Amazon or anywhere else. You often see this where mid sized brewery offers beer kegs more cheaply on location.
Amazon’s policy simply increases prices without any benefit to consumers or the overall economy.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#227Earlier quoted context omitted.
Hasn't WalMart been doing the same thing for decades, but in bricks & mortar retailing?
Yes, which is why searching "most favored nation clause" turns up legal advice on how to set that up in a good way. Note, there is still a valid question on whether or not companies with enough exposure should be held to higher standards. Consider, we hold pro players to tighter requirements than we do local leagues. They both have basically the same rules, of course, but not fully identical. And enforcement is, of c…
The US is strong on the doctrine that the law applies equally to people (legal entities) regardless of size / market cap. I don't think we'll ever see something like the EU's law that targets only large internet companies. It might even not fly on equal protection grounds.
I think that in either Finland or Iceland people receive traffic fines that are a percentage of their income. They would never fly in the US.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#228HotTake: the result of this should be to nationalize Amazon to be the defacto national provider of AWS services, delivery, logistics, and backstopped retail services.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#229What 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.
One option is to divide AMZ along business units. Thats the natural, easy way to do so. Itd cause least loss of value to the shareholders. I disagree. AMZ babies would still be essentially monopolistic in their markets. Nor do I think shareholder value, after being inflated through monopolistic abuse, is sacrisanct. Divide AMZ slicing through the business units. Make a half dozen vertically integrated baby AMZs. They…
I’m suspicious, I think most people underestimate how hard it would be to split companies.
If you have everyone in the company go dig holes for 24 months, the stock price would tank and much value would be destroyed.
Likewise splitting is a massive effort that amounts to burning resources that wouldn’t otherwise be spent.
Now part of the point is to destroy the monopoly, which reduces company value too. This is a subtle point; we are probably ok with this because implicitly this is profit extracted as rent and which should really go to competitors. We’d probably say the value here is being redistributed.
But the monopoly rent is different from the actual OpEx and CapEx required to restructure. I really want to see even a rough quantitative analysis here before making any commitments.
The approach you put forth here seems maximally complex and inefficient as an end state, FWIW. Shared access is going to be a nightmare to operationalize. Much better to cut at existing business unit org boundaries.
Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”
#230This 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.
I fairly frequently see a little "may be available at a lower price from other sellers without Prime shpping" thing on listings.