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”

#421

Post by putlake » Wed, Oct 04, 2023, 6:56 PM UTC

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…

This is a good point and your comment below ( https://news.ycombinator.com/item?id=37768419 ) highlights it well. What people don't realize is that this is in the interest of the consumer. I used to work at Amazon (although not on any of these teams) so that's probably why I know that "see all buying options" means the price is not competitive. As a consumer I value this.

Amazon scours the web to make sure their products are competitively priced. So if a Western Digital external hard drive is $99 on NewEgg, then Amazon wants to sell it for $99 or lower. If it's a 1P product (i.e., Amazon is the seller), they can easily price match in real time. But if it is a 3P (third party seller) product then Amazon cannot take that action unilaterally take that action since it is the seller setting the price. So the best they can do to protect their customer in real time when their crawlers detect a lower price elsewhere is to hide the buy box behind the "see all buying options" button.

I'm sure when this feature was rolled out, Amazon's sales must have dropped. They are taking that short term hit in order to protect customer trust in the long term.

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

#422

Post by OkayPhysicist » Wed, Oct 04, 2023, 6:57 PM UTC

scarface_74 wrote: post #391

OkayPhysicist wrote: post #387

Earlier quoted context omitted.

What possible complaint could you have about government overreach that doesn't equally apply to corporations? Antitrust law is the only thing standing between us and a corpohellscape "America, an Alphabet Company".

Government has the power of the state to force their wills on people. Please tell me a scenario where an adtech company will gain the ability to take away my rights and property the way the government can? The government has a “monopoly on the legal use of force”. Look no further than Florida to see what an overzealous government can do when you disagree with them or the police that raided a newspaper office because…

Companies can use anti-competitive behavior to curtail your rights in all sorts of ways. Look at America's storied history with company towns. Free speech doesn't get you very far when being blacklisted from the company store means you starve, or your company scrip that you've been being paid in is no longer accepted to keep you housed, or they pay the Pinkertons to beat you senseless for using the word "Union". The reason we don't have that anymore (well, except for that last one Amazon) is government regulation.

The government at least has the obligation to appear as if it's beholden to your will and rights. Corporations have no such qualms.

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

#423

Post by slibhb » Wed, Oct 04, 2023, 6:57 PM UTC

Legality aside, I'm not sure that Amazon is winning in the long run with this strategy. I mostly buy products direct from the manufacturer these days and virtually all manufacturers have high quality websites with solid ordering experiences. As long as they have the name recognition, they can either sell for higher on Amazon and take the advertising hit or just ignore Amazon altogether.

I continue to buy some stuff on Amazon. Mostly books (they're way cheaper than book stores) and gadgets (I bought a 12 volt car fan recently). The sort of stuff where I don't care who makes it.

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

#424

Post by phendrenad2 » Wed, Oct 04, 2023, 6:57 PM UTC

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…

> Please somebody make a site with no payola

Aliexpress?

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

#425

Post by codexb » Wed, Oct 04, 2023, 6:59 PM UTC

granzymes wrote: post #378

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…

You are touching on a point that Benedict Evans has made quite eloquently in the past: >There was a joke a few years ago that rent is the new [Customer Acquisition Cost], and that now applies to everything. The [Total Addressable Market] for search ads is not ‘advertising’ (let alone online advertising) but everything that is spent to reach and serve a customer, starting with retail rents. This applies to Amazon, but…

It's going to be a bit harder to win on this end I think. Manufacturer's require retailers to agree to this type of restriction all the time time (and it's mandatory, not voluntary) like it is with Amazon.

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

#426

Post by phendrenad2 » Wed, Oct 04, 2023, 6:59 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.

This will seem less and less like a hot take over time, I think. People seem generally unhappy that megacorps like Amazon and Google simply exist.

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

#427

Post by taeric » Wed, Oct 04, 2023, 7:00 PM UTC

granzymes wrote: post #409

taeric wrote: post #405

Earlier quoted context omitted.

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.

But that is a non-sequitur. Literally, in that that doesn't necessarily follow. We literally don't know why the buy box doesn't have it here and I could guess at a few other reasons. Most likely, I'd guess that the cheapest option not being Prime factors in to it more so than external offers being cheaper.

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

#428

Post by coconut08 » Wed, Oct 04, 2023, 7:02 PM UTC

slibhb wrote: post #423

Legality aside, I'm not sure that Amazon is winning in the long run with this strategy. I mostly buy products direct from the manufacturer these days and virtually all manufacturers have high quality websites with solid ordering experiences. As long as they have the name recognition, they can either sell for higher on Amazon and take the advertising hit or just ignore Amazon altogether. I continue to buy some stuff o…

i would pay more money to not have to put my credit card into or attach my identity to 100 different random websites all of which almost certainly have worse security practices than amazon and many of which absolutely will have that data stolen at some point.

even for people who don't think about stuff like that, it's way easier for the average person to buy everything from a single place than to go to a bunch of different random websites to buy things they want.

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

#429

Post by scarface_74 » Wed, Oct 04, 2023, 7:03 PM UTC

OkayPhysicist wrote: post #422

scarface_74 wrote: post #391

Earlier quoted context omitted.

Government has the power of the state to force their wills on people. Please tell me a scenario where an adtech company will gain the ability to take away my rights and property the way the government can? The government has a “monopoly on the legal use of force”. Look no further than Florida to see what an overzealous government can do when you disagree with them or the police that raided a newspaper office because…

Companies can use anti-competitive behavior to curtail your rights in all sorts of ways. Look at America's storied history with company towns. Free speech doesn't get you very far when being blacklisted from the company store means you starve, or your company scrip that you've been being paid in is no longer accepted to keep you housed, or they pay the Pinkertons to beat you senseless for using the word "Union". The…

So please tell me a realistic scenario where Google goes from an adtech company to one that can take away my freedoms and shoot me with impunity?

Also please tell me a scenario where Amazon takes over all retail?

If you haven’t been paying attention, the justice system and political parties gerrymandering hasn’t even been trying to act like they are behaving fairly.

The governor of Florida has actively been punishing companies both big and small that have been speaking out against him.

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

#430

Post by kube-system » Wed, Oct 04, 2023, 7:05 PM UTC

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…

The math absolutely does check out, lets say, for an addressable market of 100k purchasers:

(and I'll be generous and I'll pretend Walmart has zero fees)

Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000

Walmart: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $8,400

And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $29,400

See the issue? The problem is that one seller on Amazon moving to another platform won't change the fact that Amazon has the majority market share. That's how market momentum works and it's why we have antitrust laws.

Even with exorbitant fees, they are still where sellers need to be. And they are using this market share to force sellers into overpricing on other platforms so that they maintain this unfair position.