California sues Amazon, alleging its policies cause higher prices everywhere

npr.org

6 points·finnh··5 comments

This has the potential to be an interesting test case, as it challenges the prevailing Chicago School doctrine on antitrust/monopoly enforcement.

How so? My understanding of the Chicago School posture is that lower prices to the consumer is the only thing that matters (vs, for example, too high of market share). The Chicago School proposes that no amount of market share is too high so long as prices don't go up (more or less).

This case actually proposes that prices are going up due to Amazon's practices. The path is an interesting one:

* Amazon charges 3rd party sellers high fees

* 3rd party sellers raise their prices on Amazon to recoup

* Amazon requires most-favored-nation status: 3rd parties sell at lower prices through other retailers

* So 3rd parties raise their prices at other retailers.

Yes, this is my point - that costs to consumers are rising, rather than being driven down by economies of scale and competition. It seems to me that this was a highly predictable outcome of market dominance, once achieved the incentive to collect economic rents goes way up.

Ah, gotcha - I interpreted "challenge" differently from how you meant it. thanks!

Better sue the California government too if that’s a crime

Reply on news.ycombinator.com