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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”

#361

Post by JohnMakin »

kimbernator wrote: post #219
EGreg wrote: post #161

Earlier quoted context omitted.

[flagged]

It's trivial to create a website (frontend and backend) that offers similar functionality to Amazon. There's nothing special about their software platform. You can't open-source marketing and the insane delivery network Amazon has. Those, among other things, are the reason they are successful. They could release all of their software completely open source and literally nothing would change.

The infrastructure of a large ecommerce website is extraordinarily complex as well, as well as issues that arise with warehousing tech.

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

#362

Post by darklycan51 »

Oh man the people defending Amazon in the comments, I understand many of you are investors but come on... let's stop pretending for a second that Amazon doesn't deserve a break up for what they've been doing for years now, even after being called to congress for it.

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

#363

Post by taeric »

abduhl wrote: post #355
taeric wrote: post #330

Earlier quoted context omitted.

Ah, agreed. And if you take the worst possible interpretation of my post I can see how you get there. My point was that many rules get enforced on a cost benefit based system. Especially in business where enforcement is necessarily an expensive undertaking. Ideally, part of enforcement will include evolution of the rules so that people don't grow into a situation where what they are doing is suddenly illegal. That sa…

My interpretation isn’t the worst possible interpretation, it’s the realistic interpretation based on how permitting discretionary application of the law actually works in practice. Your view is fine in theory but fails (and not just fails theoretically - it has failed and continues to fail actually) in practice. Advocating for your theoretical ideal when we know it fails in practice is… well, just not useful.

I'm largely acknowledging that that is where we are. And not too concerned about that for many rules. But, and I said so in the initial post, expect that more and more will get enforced both as you get bigger, and as we get better at enforcing them.

That is to say, I also expect clarification and evolution of the rules during this enforcement action. Such that I would be most happy to have some of these arrangement flat out illegal. That said, https://www.ftc.gov/advice-guidance/competition-guidance/gui... was linked on Matt Levine's email today. And... "Our company monitors competitors' ads, and we sometimes offer to match special discounts or sales incentives for consumers. Is this a problem?" is answered with a no. Such that, this is a tough field to litigate right now.

And, what is it you are advocating for? That we only have rules that we can universally enforce? That would require that we know all of the ways that they can be broken from the beginning, so that we can encode those in law.

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

#364

Post by EGreg »

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.

When FB was founded there were:

  MySpace

  Friendster

  Whimit - Russians online (LOL)
and many other small examples. There was still AOL, MSN, etc. There was a time when they ruled.

The only reason that FB, Google and yes Amazon were even able to launch, is because the open permissionless web disrupted AOL, MSN etc. Imagine them allowing Amazon to launch on top of them. They’d cannibalize them just like Amazon cannibalizes sellers.

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

#365

Post by granzymes »

s3p wrote: post #313
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.

But how? The smallest unit of a possible breakup would be a standalone 3rd-party marketplace company, and yet that unit would still have the same market power for 3rd party sellers as Amazon as a whole does today.

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

#366

Post by abduhl »

fyrn_ wrote: post #353
dgb23 wrote: post #327

Earlier quoted context omitted.

This argument seems sound. Amazon is not a neutral entity or a public space. It's a private platform with its own interests that are very often in conflict with sellers. There is this weird cultural expectation of platforms and platform-like applications (social media, multiplayer video games, online stores, proprietary libraries/engines, even entertainment media "universes" and franchises etc.). Participants and con…

That's nice, but the reality is that Amazon has almost 90% control of e-commerce. They have huge monopoly power, and laws exist to protect consumers from that. Is it the ideal way to build a society? No, But the government should still step in when it happens.

90% by what metric?

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

#367

Post by londons_explore »

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…

> Amazon responds that it is within its rights to not promote uncompetitive offers

Sounds to me like Amazon has found a loophole in the law. It agrees to list anything for sale, with no anti competitive conditions, but then only recommends customers buy things that it believes are in the customers best interests.

The FTC will struggle to argue that is illegal. Amazon can't be compelled to recommend stuff. (free speech etc). Also, what they recommend is in the consumers immediate best interests.

It will be hard for the court to argue that amazon should start recommending more expensive items to consumers, just to push consumers into looking for a cheaper platform.

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

#368

Post by AlanYx »

granzymes wrote: post #356
AlanYx wrote: post #352

Earlier quoted context omitted.

That first example is eye-opening for me. I always thought that when Amazon doesn't show a buy button on the product page, it's because that product is not currently available to be shipped from Amazon.

That's one possibility! But Amazon also hides the buy box when the only offers are not what Amazon considers "competitive" because it hurts their brand if consumers see shitty deals. In this example, the pens with the buy box are 50% cheaper and have much faster shipping.

They're not the same pens though (extra fine v. ultra fine).

I can understand why the FTC is concerned. This has the potential to be worse for competition than MFN agreements, because it forces any supplier whose products might end up on Amazon to police its entire distribution network for minimum pricing.* It also forces suppliers to crack down on (legal, authentic) grey market imports, even if those are never sold on Amazon, or risk losing the ability to effectively sell on Amazon.

* Moreover, that minimum pricing has to be sufficiently high to account for Amazon's cost structure, even if other competing vendors are more efficient.

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

#369

Post by dantheman »

wing-_-nuts wrote: post #155
dantheman wrote: post #116

Lina Kahn is the worst type of politically motivated bureaucrat. Instead of executing the law, seeks new interpretations so that she impose her world view on others. She's never created or done anything of value other than be a student or a bureaucrat. Hopefully this case will be another in her long list of failures.

I think US anti-trust law has been far too toothless for far too long. I wish we had some politicians from the 1920-30's that would actually go after big companies instead of taking bribes. Did I say bribes? Sorry I meant campaign contributions.

I mean, I doubt you have any understanding of actual anti-trust cases. But by the time standard oil was broken up it was down to 60% market share and the price of oil continued to fall.

The only monopolies that have truly existed in the USA are government granted ones.

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