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Amazon Flexes Its Muscles in Fight Against Publishers

bits.blogs.nytimes.com

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Re: Amazon Flexes Its Muscles in Fight Against Publishers

#61

Post by smackfu »

dragonwriter wrote: post #38
AnthonyMouse wrote: post #31

Earlier quoted context omitted.

> Monopolies are not, strictly speaking, about "not having any other options". They kind of are. You can get into the whole bit where it's an antitrust violation for a group of companies that should be competing to instead get together and collude with each other, but that doesn't have any relevance to Amazon. Nobody is accusing them of colluding with anybody. I'm not sure what you're getting at with the Wikipedia ar…

> > Monopolies are not, strictly speaking, about "not having any other options". > They kind of are. Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors. [1] The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the mar…

Antitrust law is not well equipped to deal with actors who use their power to drive down prices and reduce profits.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#62

Post by smackfu »

incision wrote: post #52

Honest questions here... What is supposed to happen here? This article and each of the others linked don't offer much beyond jabs at Amazon. As far as I can tell, publishers are unhappy with Amazon - period. Two years ago the hot news was about Amazon pricing books too low [1]. Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price - which I assume is set…

>What is supposed to happen here?

Amazon and their suppliers are supposed to work out their contract negotiations before it gets to the point where mommy and daddy are fighting in public, using the NYTimes to take shots at each other.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#63

Post by AnthonyMouse »

dragonwriter wrote: post #38
AnthonyMouse wrote: post #31

Earlier quoted context omitted.

> Monopolies are not, strictly speaking, about "not having any other options". They kind of are. You can get into the whole bit where it's an antitrust violation for a group of companies that should be competing to instead get together and collude with each other, but that doesn't have any relevance to Amazon. Nobody is accusing them of colluding with anybody. I'm not sure what you're getting at with the Wikipedia ar…

> > Monopolies are not, strictly speaking, about "not having any other options". > They kind of are. Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors. [1] The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the mar…

> Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors.

There is a difference between what something is and what you can use as evidence of it. There is this whole issue in antitrust law about how you define the market. For example, is MacOS in the same "market" as Windows? The accused monopolist always wants to paint the market as broad. Microsoft says it doesn't have a monopoly because Apple is competing with it. If Microsoft claims the market is that broad, but they can still do all the things you would expect a monopolist to be able to do and customers don't abandon them, it's evidence that the supposedly competing company isn't actually providing competition and they do actually have a monopoly.

> The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the market at issue doesn't.

That's just a language trick. Effective competition comes from having competitors. If you don't have effective competition it's because your "competitors" aren't actually competing with you, either because they're cooperating or because they're not actually offering the same product in the same market (i.e. in either case they aren't actually competitors).

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#64

Post by dragonwriter »

smackfu wrote: post #61
dragonwriter wrote: post #38

Earlier quoted context omitted.

> > Monopolies are not, strictly speaking, about "not having any other options". > They kind of are. Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors. [1] The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the mar…

Antitrust law is not well equipped to deal with actors who use their power to drive down prices and reduce profits.

Perhaps, but the particular tactic Amazon is employing here relies on their ability to raise price in a market in which they are dominant (physical book retailing) to acheive an advantage in negotiations related to another market (e-book retailing). It may be that their goal is to drive down prices in the e-book market, but that's orthogonal to whether the action relies on monopoly power in the physical book retail market.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#65

Post by rhizome »

dragonwriter wrote: post #50
rhizome wrote: post #48

Earlier quoted context omitted.

There is at least a century and a half of precedent for using the term "Out of Stock."

I think I was pretty clear that the tactics at issue in the article are misleading, even when they might not be strictly inaccurate.

If being misleading-while-technically-not-inaccurate is a principle that Amazon wants to stand up for, that's up to them. There are other places to buy books, and in the future maybe publishing houses will think twice about handing them exclusives and such.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#67

Post by AnthonyMouse »

DerpDerpDerp wrote: post #43
AnthonyMouse wrote: post #21

Earlier quoted context omitted.

The thing is, they don't. Amazon is like Walmart or Google. The reason everyone uses them isn't that there are no other options. There are. The reason is that they're better at it. A monopoly is, for example, Comcast, because there is no reasonable alternative provider for the same service. Talking about "hurt a publisher" is broadening the scope too far of what a monopoly is. A large retailer taking your products of…

There are markets with no real viable alternative to Walmart, because Walmart used their scale to crush competition, and no has made it uneconomical to start a rival business, since they'll temporarily lower prices below sustainable (using their scale), then raise them again when the other store dies. If Walmart has enough local monopolies, this is a self-reinforcing strategy, since it's unlikely all of the monopolie…

So the thing about a monopoly is it's totally squishy. There isn't a clear line you cross to become one because there is no clean way to define a market. Every customer places a different value on the product itself, the search and transportation cost of buying from alternative retailers, etc.

So take Walmart. Do they have a local monopoly? First, question, on what? If you want to buy a television then they almost certainly don't, because they have strong competition from Amazon and six dozen other Internet retailers, and on top of that customers tend to be willing to drive out of town to save real money on a big ticket item.

But what about, say, groceries? That pretty much puts the Internet out of the running, because you can't ship a single gallon of milk in a refrigerated truck for anything resembling a competitive price. So then the question is, how far away is the nearest local competitor? If it's only a five minute drive, maybe that's enough competition. If Walmart's prices get out of hand people will start to make the drive. But what if it's 15 minutes? 30 minutes? 45 minutes? What if a substantial portion of the local population doesn't own a vehicle and that "15 minute" drive is a two hour walk? So maybe some Walmart stores have a local monopoly on groceries.

But wait, there's more. If Walmart's local prices start to get out of hand, how hard is it for a competitor to open up? It turns out the answer is, not very hard. A small grocery store is a one person operation. Low barrier to entry. If new competitors spring up six hours after Walmart raises their prices, they can't actually raise their prices very much no matter how far away the nearest existing competitor is. Which is why, even in towns with only that one Walmart, it still doesn't cost $20 for a gallon of milk.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#68

Post by incision »

dragonwriter wrote: post #58
incision wrote: post #52

Honest questions here... What is supposed to happen here? This article and each of the others linked don't offer much beyond jabs at Amazon. As far as I can tell, publishers are unhappy with Amazon - period. Two years ago the hot news was about Amazon pricing books too low [1]. Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price - which I assume is set…

> Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price No, the claim is that they are doing that selectively , along with other things like directing people searching for a book to other publishers books, and extending the shipping time for the targeted publisher's physical books -- as means of discouraging purchases of the targeted publisher's physical…

Right.

Is there something specifically wrong with that sort of leveraging?

Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal.

There are multiple ways to get books published and multiple ways to sell them.

Amazon is big, and as one of the linked NYT articles says 'controls about a third of the book business', but that is a far cry from the modern-classic example monopoly of Microsoft on the desktop (90% share) in the 90s or perhaps Comcast (Sole option) in some places today.

Amazon and Hachette are doing what big businesses do and authors, who have a direct relationship with Hachette, not Amazon are apparently suffereing.

I'm not seeing how Amazon becomes the villain here.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#69

Post by davidw »

http://www.powells.com/ - this is a great place to get books, although the best thing of all is to go there in person and wander around. I generally like Amazon, by and large, and I love my Kindle, but wandering around looking at that many books in person is great too.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#70

Post by eridius »

revelation wrote: post #23

These articles can really go either way, but NYT seems to continuously go the publisher side. Theres not a single Amazon statement in this article. Remember that the majority of publishers just recently colluded with Apple to essentially fuck over Amazon. Why would we afford them the presumption of goodwill here?

> Remember that the majority of publishers just recently colluded with Apple to essentially fuck over Amazon.

Well, that's certainly how the Justice Department chose to see it. That doesn't make that statement the objective truth.

I still don't see how anyone can say with a straight face that the new entrant in a market is "fuck[ing] over" the dominant player. Especially when countless economists have weighed in saying that the kind of corrective measures employed by Apple and the publishers are not (and should not be) illegal and that the Justice Department basically got everything wrong.

(Google is failing me here for finding these economist opinions that I've seen in the past, but amusingly, my search is chock full of articles from before the ruling saying that economists think the DOJ is going to lose the case)

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