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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”

#291

Post by themagician »

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.

Amazon Retail (Vendor Central), Amazon Marketplace (Seller Central), and Amazon Brands (Amazon Basics, Pinzon, etc.) probably need to be separate companies. You also have decide where Amazon Ads and Amazon Registry will live.

Currently these four services all exist under the same roof and it gives Amazon basically unlimited power to unilaterally destroy entire companies or brands with zero consequences and no effort.

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

#292

Post by imchillyb »

endisneigh wrote: post #162
jbluepolarbear wrote: post #159

Earlier quoted context omitted.

You’re just wrong, Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers. The second largest is Walmart and it’s closer to 7%. Walmart, target, whatever, don’t add up to Amazons market.

> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin? Sellers should stop using Amazon if they don't like their policies, and the issues will correct themsel…

Or, hear me out here, The Federal Trade Commission orders a study done and the study corroborates the general sentiment here that Amazon is abusing their power in the marketplace. So, the FTC then sues Amazon.

Your 'feelings' about how this works only matters to you. The US branch of oversight for trade has declared (with a lawsuit) that this behavior is unconscionable and either is or will be illegal by the time this suit is finished.

You're welcome to dispute the FTC and the crowd here on HN, but you need to provide some sort of data to back up your claim of: Sellers should just stop using Amazon...the issues will correct themselves.

The FTC's suit alleges the exact opposite of what you allege. The FTC states that there is harm to the entire economy if Amazon is allowed to continue this practice.

Please cite the studies, data, or metrics you used to claim '...will correct themselves."

Thanks @endisneigh.

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

#293

Post by jandrewrogers »

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…

It is interesting to note that the US government often requires the same kinds of MFN terms, even though it is usually much more expensive to do business with the government than the private sector. There are many ways of constructively working around MFN requirements but it creates collateral damage. For example, the practice of having very high prices that are steeply discounted for most customers is often an artifact of having the US government as one of your customers. For software, it is common to create a new product/service that is trivially different in some way so that you can justify a new SKU that is only sold to the government.

Amazon's practice is bad because it anchors pricing to their mandated cost structure. That the US government engages in similar practices should at least raise questions, because it has the same effect on the marketplace.

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

#294

Post by trinsic2 »

AnonymousPlanet wrote: post #147
exabrial wrote: post #25

Apple, Google, Facebook, Amazon, break them all up. And for the love of crap, stop approving billion dollar mergers.

You have to add Microsoft to this list unless you live in complete denial about the massive monopoly that they have in office IT. And they are actually the first that should be broken up, splitting the office suite from everything else.

Microsoft should be the first one to be split up. Their dominant position is more pervasive than any other market because the operating system people use in their computers is the gateway to get too these other services.

The second should be Apple for the same reasons.

Then Amazon.

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

#295

Post by Qwertious »

adolph wrote: post #247
endisneigh wrote: post #139

Earlier quoted context omitted.

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 verificat…

If a monopoly can't help but follow its incentives to abuse its market power, then you break up the monopoly.

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

#296

Post by dylan604 »

Ensorceled wrote: post #264
dylan604 wrote: post #242

Earlier quoted context omitted.

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?

> What value/meaning is derived from this? Someone is supporting a creator whose content they like and the creator is publicly saying thank you. How is this confusing to you?

They can say "thanks to all my supporters". it's just fallacy to think the creator actually cares. it's a simple copy&paste from a list from their patreon (or whatever) to the text editor of their editing software. it's even less if they aren't even the ones doing the editing. sure, they all say "we love our supporters". it's just like people that donate to NPR so they can have their names read out over the air.

how is their sincerity (more to the point, lack thereof) confusing to you?

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

#297

Post by traviswingo »

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 feel like I’ve purchased direct from business at much cheaper rates than what were listed on Amazon.

Is it possible the loophole here is to provide discount codes at checkout for “20% off” on website only, and now magically it’s cheaper than Amazon?

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

#298

Post by bee_rider »

golemotron wrote: post #227
taeric wrote: post #179

Earlier quoted context omitted.

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.

I think we’re OK with laws like: “don’t form a monopoly,” which applies equally to everyone (but doesn’t come up often for most people!)

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

#299

Post by RandomLensman »

tonyedgecombe wrote: post #282
RandomLensman wrote: post #272

Earlier quoted context omitted.

Highly fragmented markets are also bad for price discovery - so how do we know what size to have?

I read an economics paper a while back that said you need at least four players to get a competitive market. I’m not sure how you would translate that to limits on the size of a company though as every sector would be different.

I think we need to seriously think about market design at some point. Relying on more actors alone is not a great strategy.

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

#300

Post by abduhl »

dwallin wrote: post #115
endisneigh wrote: post #68

Earlier quoted context omitted.

Amazon wants its customers to have the lowest available price . Their rule ensures that. It's very simple.

Clearly you are not a believer in free markets, because by the theory of free markets these prices would naturally arrive at the lowest possible price all on their own. You are right that this policy is very simple, it's very clear both mathematically and logically. Companies cannot lower their prices lower than their costs. If costs are variable across platforms but prices are fixed to a single value than this will…

What you are advocating for here is the opposite of a free market. Two independent parties contracting with each other and agreeing to a most favored nation clause without government intervention is a free market: either party may choose to leave the relationship. The government stepping in restrict parties’ ability to contract as they see fit is a restraint on the market.

In a free market sellers will leave the Amazon ecosystem and move to a platform with less restrictive agreements, resulting in lower consumer prices (albeit with less availability). That’s exactly what GP is arguing. Obviously GP believes in a free market.

Amazon’s belief in their own market power is irrelevant.

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