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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”

#311

Post by timmaxw »

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.

The latter seems plausible to me, but the former makes no sense. If the problem is that Amazon-retail has too much market power, how would splitting off AWS help with that problem? Amazon-retail would still have the same fraction of the retail market as before.

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

#312

Post by helen___keller »

I’m not sure I agree with the opening premise that offering “free shipping” is dangling a free lunch that doesn’t exist.

Technically this is true but it makes a lot of sense by creating an analogous experience as with retail.

If I walk to the corner store to pick up something I’m not paying a line item for the logistics that delivered that item from a factory in China, nor a line item for the rent to keep that item sitting on a shelf in walking distance. I just pay the price of the item, and those costs are baked in.

Maybe an economist can argue this isn’t the most efficient way of paying for externalities but it’s hard to argue it’s without reason. It’s clearly a preferred consumer experience. Amazon prime is like a Costco membership. The only difference is Amazon handles last mile from the fulfillment center, Costco expects me to provide last mile fulfillment with my car.

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

#313

Post by s3p »

granzymes wrote: post #302

>If this suit is resolved in the government’s favor, the remedy could be anything from ending anti-discounting measures to breaking up the firm. There's a bit of an odd remedy issue with this lawsuit. The harm being asserted by the FTC is that Amazon charges more fees than competitors but requires that sellers not charge more on Amazon than on competing sites. Originally Amazon allegedly accomplished this with a Most…

Breaking the company up into smaller units that don't have the monopoly power of forcing their sellers to fix prices.

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

#314

Post by granzymes »

helen___keller wrote: post #312

I’m not sure I agree with the opening premise that offering “free shipping” is dangling a free lunch that doesn’t exist. Technically this is true but it makes a lot of sense by creating an analogous experience as with retail. If I walk to the corner store to pick up something I’m not paying a line item for the logistics that delivered that item from a factory in China, nor a line item for the rent to keep that item s…

I think a physical retail analogy would be to imagine that every store charges a variable "restocking fee" based on how much it costs to get a replacement for the item that you are purchasing. You don't know what that fee will be until the clerk is ringing you up. Then one day a store decides to bake the restocking fees into the price, and no longer surprises the consumer with a variable fee at the checkout counter.

This is clearly a win for consumers, who can now shop the aisles knowing exactly what they will pay for the item upfront before they put it in the cart and go to check out.

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

#315

Post by OkayPhysicist »

endisneigh wrote: post #56
tartuffe78 wrote: post #55

Earlier quoted context omitted.

They're obligated to by the grip Amazon already has on the e-commerce market. Letting Amazon make anti-competitive moves that increase their grip will only worsen the situation.

This grip you're describing only exists because they don't leave, and nothing is stopping them. Again, no one is forcing people to sell on Amazon. They could use Shopify or sell on eBay. People act as if you have to sell on Amazon. You don't. That assumption and expectation is why Amazon is dominant to begin with. Sellers should leave if they don't like it, and that will naturally soften Amazon dominance.

Listen, maybe you've never heard about antitrust law, but using one's dominant market position to maintain dominance in the market to the injury of consumers is pretty much the exact definition of an antitrust violation in the US. So write your local congressman complaining that antitrust law is restricting your ability to lick Jeff Bezo's boots, or run away to the Rockies somewhere and start a radically laissez faire community where everyone's asking about John Galt, but as the law stands in this country, it's illegal, and that's a good thing.

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

#316

Post by abduhl »

taeric wrote: post #289
abduhl wrote: post #276

Earlier quoted context omitted.

So your view is that we should enforce extremely strict laws arbitrarily and capriciously based on however the particular regulator or prosecutor feels about a given entity? I can’t imagine how this could be abused.

If you've ever been on the interstate system, then you are basically with me. Literally it would be trivial in today's world to have a hookup on your car to check your speed against the local signage on a somewhat real time basis. Sounds absurd, but there is a pretty good chance every long haul truck you see out there is doing exactly that. Similarly, mens rea is a thing. Such that statutory enforcement of rules is o…

I think most people who have driven on the interstate are quite aware that police arbitrarily pull people over for many things given the vast number of laws that are continuously broken by all drivers. I do not think a regime where you’re always breaking a law and can be pulled over just for driving while black is a good example when advocating for prosecutorial discretion. I’d prefer a system that doesn’t result in being subject to a regulatory action or prosecution because I was doing business while black.

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

#318

Post by helen___keller »

granzymes wrote: post #309
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…

According to the FTC's lawsuit, Amazon no longer binds its sellers with a Most Favored Nation clause. Instead, Amazon now will refuse to promote an offer in its "buy box" space if it detects a lower price for that good on another website. The FTC alleges that this simply reconstitutes the MFA since most sales on Amazon take place from the buy box. Amazon responds that it is within its rights to not promote uncompetit…

Does anyone have examples of popular / name brand products that are pushed down in ranking due to this? I would love to see for myself how this looks in practice

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

#319

Post by jfghi »

jandrewrogers wrote: post #293
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 artif…

Not the time or place for whataboutism

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

#320

Post by scarface_74 »

jfghi wrote: post #319
jandrewrogers wrote: post #293

Earlier quoted context omitted.

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 artif…

Not the time or place for whataboutism

Why not? If it’s good enough for the government, why isn’t it good enough for the company they are going after?
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