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”

#401

Post by NeuroCoder » Wed, Oct 04, 2023, 6:38 PM UTC

pierat wrote: post #383

cwoolfe wrote: post #244

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…

Thats not the only thing I caught, at least with Ebay. During the pandemic, I decided to sell a bunch of a component I had stockpiled. (Im not a scalper. I got the parts when my dad died.). I put them for sale with $100 minimum, auction. They ended up selling for $300. I was definitely happy.... until Ebay refused to send me my money, and instead demanded access to a bank account, after the sale was complete. Fuck th…

It's amazing how quickly I recognized eBay descending into this sort of stuff from its inception. Maybe Amazon did so quickly too, but it's so obviously scummy that even as a teenager I got this impression. Kudos to you for going the extra mile

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

#402

Post by SOLAR_FIELDS » Wed, Oct 04, 2023, 6:39 PM UTC

timmaxw wrote: post #308

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…

This writeup has a lot more details: https://www.wired.com/story/amazon-antitrust-lawsuit-cuts-to... DC AG Karl Racine filed a lawsuit over this in May 2021. The judge threw it out, supposedly for lack of evidence that it actually raised prices: https://www.jurist.org/news/2022/03/dc-trial-court-dismisses... I can't find details; it's unclear what the evidence or lack thereof was. CA AG Rob Bonta filed another lawsui…

I know that sometimes these lawsuits can take awhile but scheduling something 3 years away seems excessive. It feels like discovery can take months, but years feels like a very long time here especially since this is something that is actively still ongoing and damaging to the victims

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

#403

Post by granzymes » Wed, Oct 04, 2023, 6:39 PM UTC

thfuran wrote: post #398

granzymes wrote: post #365

Earlier quoted context omitted.

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.

Why is that the smallest possible unit? It may not be especially practical, but it's certainly possible to break Amazon up by retail product category (one company for books, one for kitchenware, etc).

Because you run into the issue of "unscrambling the eggs". If Amazon is not organized by retail product category (and I would assume it is largely not), then it will be very difficult to split the company in that way. Courts really aren't in the business of restructuring companies and the last thing you want is for the new baby companies to fail because the restructuring went poorly.

Which employees go where, who gets what IP, what happens to all the underlying website/physical infrastructure? A "3rd party marketplace" unit is already likely smaller than is feasible for a court to oversee. By comparison, it would be a lot easier to split Amazon into "AWS" and "not-AWS" because the company is already organized that way.

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

#404

Post by scarface_74 » Wed, Oct 04, 2023, 6:40 PM UTC

jhbadger wrote: post #394

scarface_74 wrote: post #380

Earlier quoted context omitted.

Really? That’s your example? Everyone and their mother has a video conferencing solution and the idea has been around as something to aspire to since the 60s with the Jetsons . Do you agree with the look and feel lawsuit that Apple had against MS? Or think that Roku, Amazon, Google , etc did something untoward because they came after Apple with set top boxes?

Well, for historical accuracy, Roku was first in regard to streaming devices you hooked up to your TV. Apple and the rest copied them . And it is pretty much obvious that Microsoft copied Apple (and yes, you can argue that Apple in turn copied PARC). But what makes Amazon copying things different is that they are a marketplace for other people's products and a maker of products themselves. That has an intrinsic confl…

The first AppleTV was released in 2007. The first Roku in 2008.

As far as Amazon copying others as a marketplace owner, ever heard of the Kirkland’s brand? Store brands have been around forever.

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

#405

Post by taeric » Wed, Oct 04, 2023, 6:41 PM UTC

granzymes wrote: post #385

AlanYx wrote: post #368

Earlier quoted context omitted.

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…

I was offering the comparison because those two pens should be priced within a few cents of eachother (the difference is the tip width and ironically "extra fine" is more expensive). If the products were the same then there would only be one product page and the $9.99 offer would be the highlighted deal. The fact that one product has the buy box at $9.99 and 1-day shipping and the other product does not have the buy…

You seem to be thinking that manufacturing costs alone dictate the product cost. Demand and volume in circulation are also part of what determines costs, though. That is, your first assertion that they should be within cents of each other is clearly wrong.

It doesn't let us infer that there is a cheaper cost somewhere, it lets us infer that Amazon has a low confidence that someone will buy it. That or they have such a low inventory of it that they are not confident showing it on the buy box without more engagement from the users.

To be clear, I'm ok with the idea that this is getting investigated. I have low confidence of finding smoking gun reasons to punish sellers on this. I am far more confident that Amazon is optimizing to convert sales.

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

#406

Post by scarface_74 » Wed, Oct 04, 2023, 6:41 PM UTC

user3939382 wrote: post #395

scarface_74 wrote: post #341

Earlier quoted context omitted.

Yes because there is absolutely no way for you to get your thoughts to people worldwide without depending on big media…

Parler Strawman in any case, having a technical option doesn’t negate massive horrible effects on the public.

So it’s a straw man that anyone can’t just set up a blog or do podcast and publish their ideas?

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

#407

Post by jandrewrogers » Wed, Oct 04, 2023, 6:43 PM UTC

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

It isn't "whataboutism". If the government's position is that MFN terms for vendors are fundamentally anti-competitive and bad for consumers, which I agree with, then it raises questions about any organization or sector of the economy that widely requires MFN terms. It discredits the FTC when the US government routinely engages in the same market malpractice that they are accusing Amazon of but are disinterested in changing their own contracting behavior. It doesn't become less bad because it is the government doing it to vendors instead of Amazon.

This "rules for thee but not for me" behavior is why trust in government institutions has been eroding. It is difficult to give good and necessary actions the aura of legitimacy required for democratic institutions to function when the hypocrisy is obvious.

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

#408

Post by yjftsjthsd-h » Wed, Oct 04, 2023, 6:44 PM UTC

shadowgovt wrote: post #348

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…

This sort of practice is not as uncommon as one might assume. It is extremely common for manufacturers to set a minimum advertised price (MAP) on the products they sell to retailers. This is done to keep the cost of, say, luxury goods above a certain value, or to ensure that even if demand falls off for a product, the product is sold from official channels at a price point that covers the raw-materials-plus-labor cos…

> Why is this behavior legal for manufacturers but maybe not for Amazon? I can see no other reason than the law is path-dependent and arbitrary.

Market share => market power => different regulations.

(Of course, I would personally prefer to ban this behavior across the board; I just wanted to also point out that treating Amazon differently could plausibly be reasonable)

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

#409

Post by granzymes » Wed, Oct 04, 2023, 6:44 PM UTC

taeric wrote: post #405

granzymes wrote: post #385

Earlier quoted context omitted.

I was offering the comparison because those two pens should be priced within a few cents of eachother (the difference is the tip width and ironically "extra fine" is more expensive). If the products were the same then there would only be one product page and the $9.99 offer would be the highlighted deal. The fact that one product has the buy box at $9.99 and 1-day shipping and the other product does not have the buy…

You seem to be thinking that manufacturing costs alone dictate the product cost. Demand and volume in circulation are also part of what determines costs, though. That is, your first assertion that they should be within cents of each other is clearly wrong. It doesn't let us infer that there is a cheaper cost somewhere, it lets us infer that Amazon has a low confidence that someone will buy it. That or they have such…

Actually, in this case I am cheating because I already know that this SKU is offered for a lower price with faster shipping from Walmart. I suspect that listing is what triggered the loss of the buy box.

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

#410

Post by thfuran » Wed, Oct 04, 2023, 6:44 PM UTC

NoMoreNicksLeft wrote: post #307

thfuran wrote: post #250

Earlier quoted context omitted.

>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…

> If they were separate companies, it would require actual collusion a I don't play bridge, never learned. A game consists of two teams of two players each. My vague understanding is that you might win if a partner gets ahold of a card that you discard, but that you can't know what card that is without saying so (cheating). Good players can tell what cards their partners might need, and discard anyway. This isn't che…

>Game theory supplies that just fine

To a vastly lesser extent than when it's one company with one board and one CEO in charge of multiple business units that would be unrelated after the breakup. If you break off Costco's chicken selling business from the rest of the store, the chicken business isn't going to keep their prices so low to boost the other company's sales because it costs them too much money to do so and they get far less benefit from boosting the other company's sales than when they were the same company.