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”

#511

Post by AnthonyMouse » Wed, Oct 04, 2023, 9:42 PM UTC

femto113 wrote: post #443

granzymes wrote: post #389

Earlier quoted context omitted.

>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. Yes, 100% this. That's why I said that this lawsuit has a major remedy problem. Even if the court agrees this is anticompetitive, how do you fix it? https://news.ycombinator.com/item?id=37767994

The insurmountable problem is that the practical interests of "consumers shopping on Amazon" don't actually align with the abstract interests of "consumers in general" that the government is purporting to defend. On Amazon we want to find the right item (search, description, reviews), have strong confidence in the inventory and shipping promises (fulfilled by Amazon) and have reasonable confidence we're not getting s…

The cause of this is that it should be an anti-trust violation for any wholesaler or manufacturer to dictate retail prices to the retailer. They agree on the wholesale price because that's what they're negotiating with one another, then the retailer chooses the retail price in their store.

Now if Amazon wants the MFN clause, no problem -- but it's the wholesale price they can't sell to someone else below, not the retail price. If Amazon wants the lowest retail price, that's up to them.

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

#512

Post by dylan604 » Wed, Oct 04, 2023, 9:44 PM UTC

lozenge wrote: post #487

lcnPylGDnU4H9OF wrote: post #359

Earlier quoted context omitted.

> Some of them have coupons to specific items that are not allowed to have sales prices lower than the MSRP. That's actually kinda disappointing. I'd always assumed those flyers were pieces of trash (at best, something I'd need to put in a recycling bin) which I don't want but now I'll be more tempted to take them when offered on the chance that I otherwise accidentally avoid the sales price. It's still good to know…

Coupons are a longstanding price discrimination technique. If somebody doesn't want to pay full price, you might still get their custom with a voucher. You don't want to make the discount too easy to find though, as you will miss out on revenue from people who were willing to pay full price.

ProTip: at some stores, employees are allowed to give discounts as well. i have 2 anecdotes from HomeDepot:

Since none of their lumber should ever be in the same building as the word "straight", I made a joke to a nearby employee that we should get a discount at how warped the wood was. He very seriously told me to separate the warped wood on my cart, and he'd mark them down. Got to the register, and they were marked down 40%.

Second instance was after spending time chatting with an employee in the appliances department, he pulled out a pre-printed, handcut piece of paper from his apron pocket, wrote 10% on it with his sharpie, and i got 10% off at the register.

Oh, and of course the Guitar Center stories of "you're a cool dude, and since I like you, let me knock of X%" are infamous

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

#513

Post by sizzle » Wed, Oct 04, 2023, 9:47 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…

This should be illegal misrepresentation of your selling price wow

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

#514

Post by Guvante » Wed, Oct 04, 2023, 9:50 PM UTC

mountainofdeath wrote: post #456

Much of what Amazon does is what other retailers already do. Amazon just does it more overtly and with smaller businesses. In fact, various aspects of this where pioneered by WalMart and Costco. 1. WalMart determines the expected product and expected price and tells vendors to take it or leave it. The agreement often has a stipulation that the same product can never be cheaper elsewhere which is sometimes easy as Wal…

Amazon Prime isn't the same as Costco Membership unless you ignore everything beyond "richer customers are willing to pay for it".

Costco makes its profit off its membership.

Amazon Prime offers a product at less than cost and then shifts that cost onto its manufacturers.

After all if I am paying Amazon for Prime shouldn't Amazon pay for the difference between more typical free shipping and two day shipping at minimum? Isn't that what the payment is for?

The reality is Amazon Prime is more akin to a loss leader and Amazon realized it could use its market position to avoid inflating it's price to reflect that loss by putting pressure on its partners.

Of course whether this is legal is an open question obviously but it certainly isn't the same as Costco using a membership as a profit source.

Walmart vs Amazon is more nuanced as the difference gets into market overlaps. Should Amazon be able to force you to use its fulfillment service to use its website (which is generally illegal for drop ship style setups like Amazon who doesn't take ownership).

So Amazon is certainly rubbing against a "you can't force bundling like that". The question is whether their "forcing" you in the way their website heavily focuses on Prime.

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

#515

Post by sizzle » Wed, Oct 04, 2023, 9:51 PM UTC

takeda wrote: post #431

coconut08 wrote: post #428

Earlier quoted context omitted.

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 dif…

There was this feature provided by banks. I remember BofA was one. Unfortunately they removed it. You could create a temporary credit card number for specific vendor. It even had option to set one time limit or recurring limit. I don't understand why it was taken away, was it giving too much control to the customer?

Capital one Eno browser extension for chrome generates a new CC number for any site. I love using it!

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

#516

Post by Guvante » Wed, Oct 04, 2023, 9:51 PM UTC

thayne wrote: post #477

jancsika wrote: post #472

Earlier quoted context omitted.

> Much of what Amazon does is what other retailers already do. Walmart and Costco subsidize free shipping by raising prices on the third party businesses who sell through them? Because that's what the article is about.

The mechanics might be different, but the "free shipping" is still subsidized by driving the price of the product itself up. Either way, all consumers pay a higher price, so that a subset of them don't have to pay for shipping.

Historically you are careful with free shipping to ensure the loss is less than say a retail cut of the price.

That is why minimum orders were so popular, if it cost say $8 to ship something and a retail margin is 15% I can do the math on a break even point where it is a wash or better for the vendor.

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

#517

Post by time0ut » Wed, Oct 04, 2023, 9:55 PM UTC

Salgat wrote: post #476

mountainofdeath wrote: post #456

Much of what Amazon does is what other retailers already do. Amazon just does it more overtly and with smaller businesses. In fact, various aspects of this where pioneered by WalMart and Costco. 1. WalMart determines the expected product and expected price and tells vendors to take it or leave it. The agreement often has a stipulation that the same product can never be cheaper elsewhere which is sometimes easy as Wal…

Amazon's biggest advantage is that they can sell fakes and patent violating products to undercut other retailers.

Don’t forget copyright violating products.

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

#518

Post by Guvante » Wed, Oct 04, 2023, 9:56 PM UTC

londons_explore wrote: post #367

granzymes wrote: post #309

Earlier quoted context omitted.

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 speec…

Say Amazon offers three items all equivalent: one is priced at $9 and two are priced at $9.50 all are Prime.

If the vendor for the $9 offers it for $8.50 elsewhere and Amazon starts focusing on a $9.50 offer is that "better for the consumer"?

If the $9 doesn't exist and there are two vendors at the $9.50 price and one has a higher review history but offers it lower elsewhere is Amazon making things better by focusing on the other one?

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

#519

Post by Prickle » Wed, Oct 04, 2023, 9:56 PM UTC

scarface_74 wrote: post #380

jhbadger wrote: post #360

Earlier quoted context omitted.

Well, here's a real example. About a decade ago there was a simple video conferencing system called Nautilus. A simple LCD screen that let you call other people with the device and talk to them, not having to bother with computers or smartphones. The sort of thing that is good for talking with elderly relatives who may not be very computer or phone savvy. I bought one (from Amazon) for myself and my elderly parents.…

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?

Fortunately or unfortunately, that is something that is easy to research. ie: Amazon Basics

https://www.reuters.com/legal/litigation/amazon-copied-produ...

> thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company's largest growth markets.

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

#520

Post by fallingknife » Wed, Oct 04, 2023, 10:01 PM UTC

_uhtu wrote: post #502

mountainofdeath wrote: post #456

Much of what Amazon does is what other retailers already do. Amazon just does it more overtly and with smaller businesses. In fact, various aspects of this where pioneered by WalMart and Costco. 1. WalMart determines the expected product and expected price and tells vendors to take it or leave it. The agreement often has a stipulation that the same product can never be cheaper elsewhere which is sometimes easy as Wal…

I hate that every discussion of reigning in abusive companies has to come with 1000 comments about how other companies are also being abusive, which should apparently make us just wave the white flag. Nah, let's deal with all the monopolies, and Amazon is a good place to start since like you said, they are just incredibly blatant.

It's a very strong argument to say that the practice currently being pursued by the FTC has been a long standing and generally accepted as legal practice in the retail industry. The fact that they are going after Amazon for this, but have not ever gone after anybody else who has been doing it for decades leads me to the conclusion that this is not about the actual trade practice it claims to be about, but rather a politically targeted attack on Amazon.

And the FTC is very much capable of running multiple enforcement actions at once. Why are there no such charges against other companies doing the same thing. They don't have to be one at a time.