When Does Amazon Become a Monopoly? | Hacker News Reader

When Does Amazon Become a Monopoly?

theatlantic.com

46 pointsRestlessMind26 comments

> In the near term, the Whole Foods purchase worries some analysts most because it immediately gives Amazon another infrastructural advantage: more than 400 small warehouses, spread out across some of the most affluent (and Amazon-using) neighborhoods in the United States. They fret that Amazon’s logistical advantages—its network of warehouses, delivery routes, and cargo jets across North America—have given it an unbeatable advantage over other firms.

Super disagree with that one. WF stores pay a premium for location and are full of, you know, food. Amazon has opened up a in-city distribution center in my city - not surprisingly in a closed down Sears location. Its in a crappy part of town, by railroad tracks and the home depot. They use it for some limited pickups and uber-style delivery drivers. There's no reason they'd need the kind of setup WF has in our area - either ultra urban locations or suburban with tons of parking when they can just pickup closing brink and mortars in undesirable locations.

Grocery is hard for a bunch of reason, one of key ones being location. Why you'd give up that location to use to dispatch items out of it beyond me, and I suspect not what Amazon is intending here.

There is no such thing as a vertical monopoly. That is the dumbest idea I've heard this month probably from somebody who should know better.

Monopoly by definition is a single (or overwhelming) supplier. Vertical integration is about the exact opposite since it opens the business up to competition all along the supply chain. Amazon now competes with almost everybody.

We've had larger firms in retail and other industries in the past that died of natural causes. There is no reason to think different of modern tech companies. These are just the people who are getting the transition we have in the marketplace. Others will see and pick up on it to. You can't judge a monopoly over just a 10 year period of time.

I was under the impression that using your dominance in one market to secure dominance in another is considered monopolistic behavior—for instance, shipping IE with windows.

So how does a successful company continue adding things their customers want, but avoid getting accused of being a monopoly?

From what you're saying, it seems as though the company is damned either way. If you have earned a lot of market share, it doesn't matter whether you charge a high price or the lowest price ($0). Or is the answer just that when you reach a certain size, you should just be killed, never mind the cost to everyone else (including customers that depend on the products being offered as well as employees who have built careers working to make the company successful)?

Large companies don't do everything well, to be sure. But who is going to go out on a limb and fund the big bets, like Xerox PARC, Bell Labs, MSR, etc. if we keep cutting down the tall poppies? Academics have a place, but there are structural organizational and social reasons why they were not able to invent everything we enjoy today.

Bell was forced to spend a large amount on research and not keep the patents to themselves, or charge much for them, by the govt, because it was a natural monopoly. Ever heard of the transistor?

Ever hear of the laser printer, local networking and the GUI? https://www.amazon.com/Dealers-Lightning-Xerox-PARC-Computer...

Thank you for this comment. Most people aren't aware of the relationship that Bell was in with the gov't because of its status as a monopoly. Before the gov't broke up Bell, it agreed to let Bell have the monopoly on the telephone system, and in exchange, Bell "gave back" to the public in the form of new, "public domain" technology. Not just the transistor, but also Unix and the C programming language. Sometimes I wonder how farther we might be in our technological development if Bell had never been broken up.

Folks wanting to know more about Bell Labs can check out "The Idea Factory" by Jon Gertner.

simple solutions are things like making separate ventures be actually independent. For example spinning off IE as a separate, independent company from Microsoft. One that would be free to make deals with other OSes.

Imagine if Apple bought Intel. It would be extremely likely that Intel would be forced to continue to sell its products to everyone, even if theoretically Apple might want to just stop shipping the parts to competitors.

This is exactly the model of the Roku - it started out as a Netflix Player, but realized that deals with other content providers would be key, and that other Netflix platforms may not want to compete with a Netflix-provided player, and so Netflix spun it off.

It's a $1.5B company now (not monopolistic/huge, but a nice business...)

Corporations are certainly not well placed for research. What about research without promise of profit?

> Amazon basically bought the country’s sixth-largest grocery store for free.

For the curios, the five bigger seem to be, in descending order: Kroger, Albertsons, Ahold USA, Publix, and H-E-B Grocery. (Walmart is #7).

Ahold owns Giant, Martin's, Stop & Shop.

where did the walmart number come from? By several sources, they are the largest grocery retailer in the US.

In 2012, this article puts grocery revenue at $255b (over twice krogers revenue): http://money.cnn.com/2013/01/31/news/companies/walmart-groce...

And this article says they have 25% of the 700b grocery market: http://www.salon.com/2013/03/28/will_wal_mart_replace_the_su...

And this article says "Wal-Mart's biggest revenue driver is food (55%)".. and walmart has 485b in total revenue: https://www.fool.com/investing/general/2014/07/16/kroger-wal...

https://www.statista.com/statistics/197899/2010-sales-of-sup...

Different sources give different rankings, often very different. I picked that one because it was the only one I found at the time that put Whole Foods at #6, so at least might be the ordering the article author was thinking of.

It's also not clear how largeness should be measured. Some lists seem to be by sales. Some seem to be by number of stores. Some seem to be by number of employees. It's not always clear which a given list is using.

that site displays a lot of statistics, but has no references. its anyones guess where that data came from (and how long ago)

> Ahold owns Giant, Martin's, Stop & Shop.

And Food Lion, Hannaford, Peapod and Bfresh.

In Europe also Albert Heijn (mostly NL, which is where the 'ah' in ahold comes from, it stands for Albert Heijn Holding) and Delhaize (Belgium, France and lots of countries in Eastern Europe with various brands such as Mega Image, Shop and Go, AB * and tons of other brands besides).

They're huge and because of the vast number of brands it is quite hard to get a grip on just how large they are.

Last decade when they killed all the brick and mortar stores they are now forced to replace to remain competitive.

this article is, at best, years too early. Walmart is the worlds largest retailer, and largest grocery retailer in the US. 55% of their 480b in revenue comes from food, and their revenue from food is over twice that of Kroger (the #2 grocer).

Acquiring the #6 grocer doesnt change that.. And Amazon, even if you include 3rd party sellers, still has not reached 480b in revenue.

You cannot be the number two player and have a monopoly. That's not the way that works.

What about internet retailers? Amazon is practically the leader there with 90%? of all ecommerce sales.

43%: http://www.businessinsider.com/amazon-accounts-for-43-of-us-...

Which is a lot, but it would be hard to argue that consumers dont have choices, when the same goods are available in hundreds of other stores, both online and off.

Amazon is bigger by cap size.

and what does that have to do with whether a company is a monopoly or not?

> Walmart is the worlds largest retailer,

Never as long as anybody can freely compete. Once you can't compete, no matter how big or small, a monopoly is born.

I was also perplexed as to why Amazon would buy WF.

The only rationale that I can think of is that Amazon wants to run experiments in having physical stores in upscale areas, use AI for running the logistics of grocery stores, and perhaps as a test ground for in-store robotics.

This seems like a long term play.

big does not imply monopoly

Monopoly means control of the supply or trade of a good or service. Very little that Amazon sells is not available elsewhere at comparable prices (maybe exclusive digital content? kindles?), so it cannot be a monopoly.

When Walmart declares bankruptcy.

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