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Where Warren’s Wrong

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Re: Where Warren’s Wrong

#131

Post by basch »

fcarraldo wrote: post #47
replicatorblog wrote: post #43

Earlier quoted context omitted.

That seems like the weakest part of the argument — Walmart, Kroger, Walgreens, Costco, and every other major retailer has a similar program. All use sales data to determine what sells best and copy it. I did this for a decade, designing store brand medical devices for all the major retailers. There are plenty of legitimate critiques of Amazon. The "private label" one is by far the weakest.

Walmart, Kroger, Walgreens and Costco are not marketplaces, they're retailers, and they have contracts with suppliers and pay distributors to purchase goods to resell to consumers. Amazon is a marketplace where any retailer can list their goods for sale. I believe Warren's argument is that Amazon is abusing their position as the marketplace platform owner by listing their own goods at prices that undercut marketplace…

So you think it should be illegal for Walmart, Kroger, Walgreens and Costco to allow a company to rent shelf space, and allow that other company to keep the capital on its books until its sold, and to allow the retailer to act as a payment processor?

Whos books the capital sits on while its in a warehouse is absolutely the most arbitrary distinction in all of this. Amazon provides warehouse space, and the product provider takes the risk of unsold product. Its a fair trade that allows exposure companies wouldnt otherwise get, unless they convinced amazon to BUY their stock.

If anything is anti competitive, its walmart/apple etc forcing companies to drastically ramp up production, and then leaving them high and dry unless they accept low ball offers. It's exactly what Apple did to GT Advanced Technologies (forced a furnace company to turn into a manufacturing company, a deal they "couldnt refuse", and when they backed out / failed to deliver the company ended up ~90% smaller.)

Re: Where Warren’s Wrong

#132

Post by scarface74 »

cgriswald wrote: post #116
scarface74 wrote: post #78

Earlier quoted context omitted.

And it “captured it” because of the incompetence of the previous incumbents in retail - Barnes and Noble, Toys R Us, Tower Records, Walmart, etc. Why should the government punish companies because they were able to disrupt incumbents? Should we also punish Apple because RIM and Palm couldn’t compete?

You seem to be arguing for a winner-take-all approach to the market. Should future competitors to [monopolistic entity] be punished because [previous competitors] were unable to effectively compete? In any case, I don't think punishment is really an apt metaphor for breaking apart a monopoly.

So back in 1999 people thought that Microsoft would be dominant forever - how did that work out?

Every company I named was once dominant. Even Spotify came out of nowhere and made the once dominance iTunes Music Store basically irrelevant without government intervention.

It wasn’t government intervention that caused the once The Beleaguered Computer Company that was about to be crushed by MS what it is today.

Re: Where Warren’s Wrong

#133

Post by scarface74 »

basch wrote: post #122
scarface74 wrote: post #115

Earlier quoted context omitted.

So since most of the things we use everyday on the Internet is free, that means most products we use are run by companies that are using predator pricing. Does that mean that HN should also come under scrutiny because it can price HN free? What if I wanted to start a competitor to HN? Should the government make it so there is an environment that makes that easier?

predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, far from it, as a link aggregator its business model is to push eyeball views elsewhere, similar to drudge. https://en.wikipedia.org/wiki/Predatory_pricing http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...

Everyone here is talking about helping “future competitors”. How can you compete with free?

Re: Where Warren’s Wrong

#134

Post by specialist »

Winner takes all (preferential attachment) is just math. This new trouble is because the internet has resulted in fewer, larger markets.

Markets would need to become more fragmented or more fluid to mitigate winner takes all. I don't have any notions on what to do about that.

Re: Where Warren’s Wrong

#135

Post by chj »

scarface74 wrote: post #118
chj wrote: post #113

Earlier quoted context omitted.

Well, I think all businesses grow from small ones. They do need some kind of protection while they are developing.

So I have this great idea to delivery pet food. Should the government protect me while I grow it?

OK, I see that we have different ideas of protection. When you are selling pet food, surely you don't want the delivery company steal your customers, right? Now if government says that delivery company can't sell user data, that's the kind of protection I meant.

Re: Where Warren’s Wrong

#136

Post by eeeeeeeeeeeee »

scarface74 wrote: post #78
oflannabhra wrote: post #73

Earlier quoted context omitted.

I'm not so sure we should be heralding the fact that a single company has not captured all of commerce as a win for competition.

And it “captured it” because of the incompetence of the previous incumbents in retail - Barnes and Noble, Toys R Us, Tower Records, Walmart, etc. Why should the government punish companies because they were able to disrupt incumbents? Should we also punish Apple because RIM and Palm couldn’t compete?

It wasn’t only that. Amazon also avoided sales tax for the longest time, while all those brick and mortar stores had to pass that fee to the customer, immediately making it appear less price competitive on top of the added cost of running a physical store.

Re: Where Warren’s Wrong

#137

Post by chumali »

DeepThoughts wrote: post #87
patrec wrote: post #42

Earlier quoted context omitted.

There are just two phone makers in existence: Google and Apple. If you care about privacy and security, there is just a single phone maker: Apple. The only difference between different brands of Google phones is how much additional insecurity and crap the notional manufacturer adds on top. Amazon has complete dominance over books in the US and are on their way to abolishing book ownership outright.

No one is currently preventing you from homerolling a mobile operating system and building your own smartphone (provided that you avoid or license existing patents). It would be difficult to break into that market, establish share and make money in the short term, but no one is actively being prevented from doing so (see Chinese knockoffs). I fail to see how you see the above scenario as some flavor of monopoly. The…

You set up a false equivalence by equating monopolisation with outright coercion when in fact there are multiple types of soft and hard market power that define the degree to which a company has a monopoly in a given market (network effects for example).

Even where market power is not being overtly used to stifle competition there are strong and well established economic arguments for why the breakup of large incumbents can be net beneficial.

Regulation can also cut both ways - one of the main advantages enjoyed by large incumbents are barriers created by regulatory capture (e.g. regulations like GDPR) - small businesses simply do not have the resources to comply and remain competitive. In a sense all regulation has an element of picking winners - to dismiss it on this basis is foolish/disingenuous and completely mischaracterises the debate.

The point is to realise that corporations are private/public institutions and there is a trade-off in interests between the parties involved. Regulation is the art of balancing these interests at the socially optimal level.

Re: Where Warren’s Wrong

#138

Post by airstrike »

scarface74 wrote: post #133
basch wrote: post #122

Earlier quoted context omitted.

predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, far from it, as a link aggregator its business model is to push eyeball views elsewhere, similar to drudge. https://en.wikipedia.org/wiki/Predatory_pricing http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...

Everyone here is talking about helping “future competitors”. How can you compete with free?

It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.

Re: Where Warren’s Wrong

#139

Post by chc »

everdev wrote: post #53
mtmail wrote: post #44

Earlier quoted context omitted.

"[Amazon] has captured 43 percent of all internet retail sales in the United States, with half of all online shopping searches starting on Amazon. In 2016, it had over $63 billion in revenue from online sales in the United States — or more than the next 10 top online retailers combined. It controls 74 percent of e-book sales, is the largest seller of clothes online and is set to soon become the biggest apparel retail…

43% is a massive market share but a monopoly by the definition of the word has near 100% control of a market. I think the modern test is is it possible for someone to compete with Amazon? Costco and Wallmart certainly do. If you break up Amazon, I think online retail will just move to the next biggest player.

This definition kind of punts the question on to the definition of "compete." Microsoft in the 1990s was probably the most clear-cut monopoly in most of our lifetimes, and they still had multiple competitors (e.g. the then-beleaguered Apple), which they did try to use as a defense. I think the key factor is more about whether you believe the competitors are a credible threat. If it doesn't seem like a company is realistically beatable under the current circumstances, that's sort of what we're looking for when we talk about monopolies.

Re: Where Warren’s Wrong

#140

Post by scarface74 »

airstrike wrote: post #138
scarface74 wrote: post #133

Earlier quoted context omitted.

Everyone here is talking about helping “future competitors”. How can you compete with free?

It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.

By keeping prices “artificially low” it’s keeping competition from forming.

Yes this argument is silly. But it’s no sillier than the other arguments being discussed.

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