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”

#241

Post by BoiledCabbage » Wed, Oct 04, 2023, 3:31 PM UTC

endisneigh wrote: post #139

brookst wrote: post #130

Earlier quoted context omitted.

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 Ama…

A company makes a product - it costs $10 per unit to make. To list and sell with Amazon, they are charged $12 per unit. To make a profit the company adds and additional $1 per unit. They sell the product on Amazon for $23 per unit.

Online retailer Foo also has a store, and provide the same services that Amazon for their online shop at $5 per unit. The online retailer adds a profit of $2 per unit. Total price $17 per unit. Retailer Foo is more $ efficient for those services as a result customers price compare. Foo is rewarded for their effi with higher volume, manufacturer is rewarded with higher profit and consumer is rewarded with lower prices. Enforcing market competition led to all 3 parties involved being rewarded. Retailer Foo over time grows a larger customer base as people learn to price compare with them and forces Amazon to stop rent seeking.

But the above doesn't happen in the real world. Amazon enforces that the retailer lower their price on Amazon to $17, while still collecting $12 per unit. The company now can sell on foo, but only by selling on Amazon at a loss. They can't afford that amount of loss from Amazon and stay in business. So Amazon avoids competition. They can't pull their product from Amazon because not enough customers vist Foo retailer yet to make up the volume.

So in the end Foo retailer is more dollar efficient, but is prevented from growing and benefiting the marketplace. Amazon leverages its outside market size to avoid competition. Market participants preventing competition is against the benefits of capitalism and harms the consumer. So, it benefits the consumer to ensure Amazon has to actually compete with the more efficient competitor and stop rent selling behavior.

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

#242

Post by dylan604 » Wed, Oct 04, 2023, 3:32 PM UTC

temporallobe wrote: post #30

elashri wrote: post #8

Earlier quoted context omitted.

> 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...

Tangentially related, even in YouTube Premium you can still see ads if the content creator embeds ads as part of their content. This seems like double-dipping to me and I am seeing more and more of this.

I love the take that talking about a sponsor isn't an ad.

Even the lame concept of throwing up Pateron supporter's names on the video for mere frames scrolling by is just moronic to me. Do people really think they are special for having their username flashed on a screen? What value/meaning is derived from this?

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

#243

Post by megaman821 » Wed, Oct 04, 2023, 3:34 PM UTC

iudqnolq wrote: post #173

EGreg wrote: post #154

Earlier quoted context omitted.

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…

When Facebook was founded there was no Facebook. Now there is a Facebook. When there's a better alternative customers are less likely to try out your new, less good idea. Can you give an example of someone serious using IPFS instead of S3? I don't really get what "all storage worldwide" means.

Except there was a Facebook and it was called MySpace. Facebook won because people enjoyed using it better.

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

#244

Post by cwoolfe » Wed, Oct 04, 2023, 3:34 PM UTC

This strategy has been adopted by eBay as well and artificially drives up prices. Let me elaborate.

Recently, eBay has made it so that only the products with paid ads are shown in places where customers click. This drives up the cost of everything by more than 10% which is eBay's ad fee. I refused to buy a paid ad to sell my MacBook. It sat on the site for a month, which is highly unusual for an in-demand and rightly priced product. Finally I lowered the price enough to get it sold.

Most consumers use the default site, which filters by Recommended (i.e. ads) The play for consumers to win at this new payola ad scheme is to always filter by lowest price (or in amazon's case Prime + lowest price)

But really, consumers don't win (and neither do sellers) because now these ads take up space in supposed "search results" for items which don't match the search terms (but are close enough) This creates frustration when you are looking for something to meet a specification, like E26 light bulbs for example. Here, it is pointless to show anything that doesn't meet that specification and yet the site shows them, and the seller has to pay the ad fee.

Please somebody make a site with no payola!

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

#245

Post by enragedcacti » Wed, Oct 04, 2023, 3:34 PM UTC

xgl5k wrote: post #35

FTC should go after other industries that are far more harmful to customers than tech. ISPs, healthcare/insurance, etc. Tech should be no where near the top of concerns for the FTC. This is a political stunt. If Lena Khan and the FTC were actually interested in consumer protection, they would go after other industries first.

> This is a political stunt. If Lena Khan and the FTC were actually interested in consumer protection, they would go after other industries first.

Totally! As we all know, the FTC is legally bound to only doing one thing at a time.

A more aggressive FTC is starting to target drug mergers and industry middlemen: https://www.fiercehealthcare.com/regulatory/more-aggressive-...

How the FTC Is Tackling ‘Below the Radar’ Healthcare Deals : https://medcitynews.com/2023/09/how-the-ftc-is-tackling-belo...

FTC warns of ‘rampant’ pharma consolidation as it targets $28bn Amgen deal: https://www.ft.com/content/bbe06477-22e6-4d46-a4c2-03964a2f8...

FTC writing new internet rules to safeguard users’ search, health and location data: https://www.washingtontimes.com/news/2022/nov/22/ftc-writing...

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

#246

Post by belter » Wed, Oct 04, 2023, 3:34 PM UTC

jen20 wrote: post #234

EGreg wrote: post #117

Earlier quoted context omitted.

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?

What does "open source Amazon" even mean?

Every Prime member gets commit access...

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

#247

Post by adolph » Wed, Oct 04, 2023, 3:37 PM UTC

endisneigh wrote: post #139

brookst wrote: post #130

Earlier quoted context omitted.

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 Ama…

> They will find some other reason to remove these sellers.

I think this speaks to the nut of the problem. Unless there is an incentive upstream of the misalignment of parties, then any number of lawsuits after the fact will have a "war on drugs" level of futility.

What to do then? In an alternative universe perhaps the FTC was implemented to improve trade by promoting standards, ontologies and authenticity verification that lead to greater freedom of trade and less gatekeeping.

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

#248

Post by spiderice » Wed, Oct 04, 2023, 3:38 PM UTC

brvsft wrote: post #191

elashri wrote: post #8

Earlier quoted context omitted.

> 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...

Nice, looks like I have an actual reason to convince my wife that we switch to Instacart next year.

Is Instacart an Amazon replacement for you? Generally, if I can buy something at a store within 15 minutes of me I'll usually just make the drive to buy it rather than going to Amazon. I use Amazon for the things that I generally can't get locally (such as heavy duty floating shelf brackets that I bought recently. No idea what store sells those near me).

But the idea of replacing Amazon with Instacart is definitely intriguing to me

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

#249

Post by translucyd » Wed, Oct 04, 2023, 3:38 PM UTC

0xADADA wrote: post #228

HotTake: the result of this should be to nationalize Amazon to be the defacto national provider of AWS services, delivery, logistics, and backstopped retail services.

But that would nationalize profits as well. What kind a world do you think that's a good thing??? /s

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

#250

Post by thfuran » Wed, Oct 04, 2023, 3:42 PM UTC

NoMoreNicksLeft wrote: post #211

ezfe wrote: post #99

Earlier quoted context omitted.

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.

The first one seems obtuse. If here were some 1960s-style comglomerate that sold shower curtains and offered professional bowling ball waxing, with a 95% monopoly in both... Why would splitting it out into two monopolies improve anything? Even if there are some unknown, misunderstood synergies between the two businesses, will they not just collude in that way that bridge players do, without any overt actions that cou…

>will they not just collude in that way that bridge players do, without any overt actions that could be punished?

Currently, they get that for free by virtue of being the same company. If they were separate companies, it would require actual collusion and may, depending on the specifics, be illegal. It's also be less likely to occur since they'd need some motivation to do so. Why would the shower curtain company even attempt to collude with the bowling ball waxing business?