Amazon’s New Competitive Advantage: Putting Its Own Products First

Post by jacobr1 » Wed, Jun 17, 2020, 3:40 PM UTC

mthoms wrote: post #143

jacobr1 wrote: post #134

Earlier quoted context omitted.

I think the bigger problem that people have in general with moves like this is the _change_. If Walmart previously didn't promote their brands, and now did so aggressively, you'd hear complaints as well. The other complaint seems to be "fairness." If you operate a platform, people expect it to be fair. But what is "fair" probably has more to do with historical cultural norms than actual abstract fairness, again it is…

>As a consumer, I personally like the Amazon brands, because I can at least trust them to be real products with a reasonable quality expectation, not a switchout from some crappy seller or comingled inventory with fakes. What irony. Amazon's co-mingling is actually benefitting them in ways other than lowering costs — It's actively driving people to their house brand(s). Amazon is pure (evil?) genius.

I'm not sure. How can it not be the case that being the global platform for the "everything store," and having people search on amazon for purchases even before google is a bigger business than selling your own white-label goods? The extra margin gained with cost-reduction from co-mingling products surely can't replace that strategic advantage, can it?

I suspect Amazon just overreached. And not because of an intentional decision going sideways, but because of having many independent teams, with smart people, each optimizing for their own area. Frankly, it is actually amazing how much cohesiveness in action and strategy actually exists, as opposed to the mistakes we see (I'm looking at you AWS console).

Post by ChrisLomont » Mon, Jun 22, 2020, 11:21 AM UTC

clairity wrote: post #33

ChrisLomont wrote: post #28

Earlier quoted context omitted.

Amazon's share of the US retail market is too small to call them a monopoly there, and they hold around half of online retailing, again too small to be a monopoly, since there are ample places to get goods elsewhere. Until they're a legal monopoly in some suitable category, they are welcome to do this. One effect may drive amazon competitors to cater to all the sellers. And at any rate, to be the top spot Amazon has…

it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. it is, in fact, only one metric of many by which monopoly is judged. being a platform business that competes directly with its business customers can be a significant (but not necessarily sufficient) indicator as well.

>it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly.

It is according to US law. Without a larger percentage, no court will consider anti-trust charges, due to Circuit and Supreme Court cases on what percentage of market control is required. Here's relevant portions from DoJ:

"In determining whether a competitor possesses monopoly power in a relevant market, courts typically begin by looking at the firm's market share.(18) "

So the typical case starts with percent control....

"Although the courts "have not yet identified a precise level at which monopoly power will be inferred,"(19) they have demanded a dominant market share"

So the courts require a threshold.....

"the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%.""

There's ample more court citations on the DoJ page.

Amazon doesn't reach these levels in probably any relevant category they are in. Certainly not for retail sales (Amazon is a tiny portion there), or online sales (less than half), or web services (Amazon ~ 40B out of 350B market).

For any company, if you shrink the categories far enough, you can always find a monopoly - Apply has a (near) monopoly on Apple watches, for example. But this is not a monopoly.

https://www.justice.gov/atr/competition-and-monopoly-single-...

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First