FTC reportedly plans major antitrust lawsuit against Amazon
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We have an Amazon prime depot about 10 minute walk from our house. The drivers can schedule their deliveries to us either to the beginning or end of their routes, and that shows: we get prime shipping for almost everything. In fact, trying to batch individual items into fewer deliveries is not necessarily even an option anymore. It's rare that I need the order in for next day, and I'd be happy to have the whole batch delivered in 2-3 days. But no, I get a small batch on next day, one item on day 2 and two more on day 3. There is no - or very rarely - option to select "all of these in one go, on day 3, please".
Then again, I live in UK, in the weird place that's both in London and in Kent at the same time. That said, when we do need next-day delivery, it tends to be available for about 50% of the time.
I think we've had two deliveries after 20:00 in the past year.
Some that is because if anything does well in their marketplace, they make an AmazonBasics version and then undercut them.
I don’t think issues should be picking sides so much as seeking the truth.
Amazon had 38% of online retail market share [0] and only 9% of total retail market share [1]. So I think it’s going to be hard to show antitrust violations without some price collusion.
[0] https://www.statista.com/statistics/274255/market-share-of-t... [1] https://www.pymnts.com/news/retail/2022/amazon-and-walmart-m...
Rather, they addresses situations where companies unreasonably exert power to lessen competition.
The idea is to prevent monopolies from forming in the first place.
The unreasonable part is where the monopoly power comes in.
Companies lessening competition happens all the time, it’s the monopoly aspect that triggers antitrust.
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power
I'd say Amazon has "significant and durable market power"
Especially because the first part of determining marketshare and market power is determining the market. New markets happen all the time, with old markets dying out. Twenty years ago, smartphones wouldn't have been a market. Fifteen years ago: streaming services.
Like going back to your "Intel with x86", what is the market? x86_64 CPUs? Sure they have monopoly power. All CPUs? Now they don't have as much because they're competing with ARM too. Mobile phone CPUs? I don't think there's been a new Intel phone since the Asus Zenfone 2 (2015).
article - https://www.ftc.gov/news-events/news/press-releases/2022/11/...
They are more rigorously enforcing laws against unfair practices, monopoly or not.
"Unfair methods of competition, the policy statement explains, are tactics that seek to gain an advantage while avoiding competing on the merits, and that tend to reduce competition in the market."
> See that filter that orders priority by realized value? Remove it and order by campaign contributions
"We have to been seen doing something, the election cycle is fast approaching. What if we go after Comcast?"
"They gave a important senators son a no show job so they are off limits for the time being"
"Amazon?"
"Let me check, actually they haven't done much for us lately, let's shake them down, if they give my cousin a few million for consulting we give them a small fine, if not we give them the law"
Talk to the FCC, probably.
At least with Amazon I know I'm actually getting it in 2 days or they'll give me a refund (and often times still give me the product too).
I do not want Amazon Prime because in my area (in southeastern Australia), it fails to meet its delivery promises about 95+% of the time, and when that happens, Amazon cancels the order on you half the time and sends it off to some distant pick-up point the other half. Regular Amazon just sends things by post, which is so much more reliable and convenient.
I strongly prefer using smaller online retailers. I have not found it very difficult to find ones that offer better and more honest service (not to mention lower prices) than Amazon. As far as I'm concerned, Amazon is for Kindle books, and occasionally the odd item I can't find anywhere else.
You can't argue that the FTC is unjustified by saying that the OP is wrong in saying it's monopolistic, when FTC isn't saying they're a monopoly.
Like, what even is this discussion?
Sure, but “online retail” is pretty clearly an overly broad market including separate segments between which there is no substitution effect, and there are a whole lot of segments within that where Amazon has majority (>50%) market share (safety & security, communications, home audio, portable audio, etc.)
Not that this is about retail, per se, anyway, except maybe in leveraging market position in retail as an aspect of the anticompetitive behavior regarding sellers planning on using their fulfillment services.
I am sure that for CPG, Amazon’s share is significantly higher.
Over time the experience degraded because they encouraged cheaply copying popular products, and then they even did it themselves and competed with their sellers. And of course their anticompetitive practices have made things much worse for those sellers.
Personally I've found the customer experience of non-FBA merchants on amazon is often pretty bad: long shipping times and weird return policies. This gets at a sort of core problem with this: where is the line between anticompetitive behavior and just "making good products". I was very happy when google did it's hotels thing, the hotel aggregators are by-and-large unpleasant. And as much as there was wailing and gnashing of teeth here about amp, when I was doing a mobile search I would preferentially click amp sites -- they tended to work much better.
Of course all of this depends on what specifically the FTC is arguing, and we won't see that until they actually file.
What they could argue is about the myriad of ways that Amazon uses its market power to put others out of business or force them to sell (diapers.com comes to mind on this[0]).
[0]: https://slate.com/technology/2013/10/amazon-book-how-jeff-be...
Their ownership of AWS, Twitch, MGM, Gaming studios, windfarms, lenders are problems. If they want to be an retail giant, that's fine, but they shouldn't be producing and selling games & movies as well. They need to pick a lane and spin off unrelated entities that only exist because of Amazon's dominance in retail.
Their expansion into all of these market segments make sense in isolation. Amazon builds a better service internally, then begins to offer it for sale to others. But at some point, they've crossed over into abusing their monopoly in one area to expand into another.
Similarly, I have seen a lot of complaints that amazon charges for ad space in the search, and you therefore need to pay to get out of page two. This, again, is widely practiced in retail. The cereal aisle doesn't look like it does because the store manager is making it up, general mills and post rent the space and decide how to arrange their sections. New retail products need to explicitly or implicitly pay for placement: either with cash or with free / discounted product.
And another one: Amazon Basics. Free market research with the data from your paying sellers, to then enter a market with a product you know will sell, in a position of dominance. Much like they do with open source in AWS.
They should get hit with billions, but one can only hope.
But these are the things that are pro-competitive. So now they make batteries. They're not putting Energizer out of business, they can still sell through Walmart or local convenience stores etc., and some customers still buy Energizer batteries on Amazon, but now customers have a new option for batteries from a well-known brand with lower prices. Obviously the competitors don't like this -- they're losing business to new competition -- but new competition is good.
Where you run into problems is where companies leverage a dominant market position in one area into abusive practices in another. So for example, if Amazon had a monopoly on retail, they could demand huge margins for reselling a competitor's batteries, or just stop carrying competing batteries and charge high prices for their own because customers have no other option.
But they have no such market power. If they tried to charge significantly more than competing retailers for basic commodities, customers would just buy them from whoever has the best price.
Compare this to, for example, mobile app stores where customers in practice have one store provided by the phone platform and if that store charges high margins or doesn't carry something they want, they have to buy a different device for hundreds of dollars, over a $1 app. Also, there are only two platforms of note so if you dislike any practice shared by both of them you're out of luck, whereas in an ordinary retail market there are a zillion competing retailers.
Moreover, what should businesses use to determine whether to enter a market or how to price their offerings? A dart board doesn't make for an efficient market. It sounds like you're objecting to someone other than the incumbents having access to the threshold amount of data needed to know whether it's worth entering their market.
If the existing competitors were already charging thin margins in a highly competitive market then Amazon could look at the data all they want but their conclusion would be that it makes no sense to enter that market. When that isn't the case, the "victims" of this practice are some other abusive conglomerates with sour grapes.
I was trying to find an airfryer cookbook for one specific model, and they all seem to be auto-generated (chatgpt?) with nothing that is model-specifc.
And all the reviews appear to be auto-genereated as well. sigh.
Edit: this seems particularly monopolistic because it is using its own global logistics to undermine the supply chain to other retailers.
https://www.forbes.com/sites/siladityaray/2020/08/26/indian-...
I needed to buy creatine and the last place I would buy it would be Amazon because there are too many chinese counterfeits, and worse Amazon seems to wash their hands of any responsibility. I ultimately bought creatine from nootropicsdepot. I buy things directly from the manufacturer now or physically from Target.
Antitrust lawsuits died the day MS got a slap on the wrist, and we've been paying for it as a society ever since. I really doubt the authenticity of this effort, but I also lack the expertise to judge properly so maybe I shouldn't be so pessimistic.
She runs into challenges because she has a somewhat novel theory of antitrust. This causes conflict between the long-standing staffers (who both want to win cases and seem to dislike the new direction) and with judges (who don't seem to be buying her theories).
The alternate theory is the novel one. That theory basically sums up to “no we shouldn’t” and also “after a few years in public service I am happy to announce I have taken a role at a large monopolistic company and can now afford a summer home.”
For more info read this book: https://mattstoller.com/
My worry would be a feedback loop giving Amazon increasing dominance due to this effect, and would like to see both vertical integration and Monopsony more heavily scrutinized, but this lawsuit seems to target a feature with an objective benefit to consumers given Amazon's amazing shipping and return policy.
That "slap on the wrist" was sufficient to prevent MS from owning the browser.
They were going to actually break the company apart into different divisions to stop the vertical monopoly, but instead that's just become standard.
I know nothing about their thinking here, but very often when you see enforcement agencies focusing on something that seems like a lesser problem in the basket of problems, it's because they're selecting the specific point they feel they can win in court on.
What wins in court is related to what you can prove, not necessarily related to what the worst offense is.
Whether or not there are also “legitimate reasons”, its not hard at all to see favoritism on a platform with market dominance conditioned on use of another service as leveraging dominance in one market to gain control of another.
It's not exculpating for a burglar to claim that a burglary was a really good choice for them at the time.
edit:
> There's legitimate reasons to favor sellers that use your own logistics. Hard to see that as anti-competitive.
These sentences bother me so much. The argument is about what is or is not legitimate, and you're not making an case, you're just giving a verdict. Why is it hard to see?
I think this is probably wise even if they don't win much:
1) it'll set the boundaries of how courts interpret the current laws, which will inform if there are unpopular holes that could become part of political platforms going forward
2) it'll add that much uncertainty and "cost of doing business" legal expense to companies playing fast and loose in other novel ways because they've known they're unlikely to get challenged
The only real question right now is if the judge whose son quite literally works for Microsoft (!!) will decide that laws don't matter, which has been the main issue with antitrust enforcement in the recent past.
If so, this is some weak-sauce when it comes to anti-competitive behavior.
Which... as a consumer is exactly what I want.
We should regulate Amazon, and we cannot regulate Temu, we ban it.
Then we're back to the trade war. The tit-for-tat from that became ridiculous.
The question has and will always been, so what are you gonna do about it?
I mean... TSMC is based in Taiwan, and if China were ever to invade they'd have a vested interest in kneecapping American businesses that currently rely on that chip supply (AMD, Apple, and Qualcomm all come to mind) -- for any of a list of reasons ranging from turnabout over the whole Huawei thing to just the obvious incentive to turn that manufacturing capacity toward producing a domestic supply.
In that context, building up domestic suppliers of our own is just a reasonable precaution.
> I think taking down Amazon and maybe busting them up ala AT&T would be a feather in Biden's cap with the liberals and the right thing to do. Then they need to go after Google and Facebook.
But also yes, I'm with you on this wholeheartedly.
I'd further add, given we have a history of breaking up telecom companies specifically for amassing too much market power that you as a consumer to avoid them, that we should probably turn the same to most ISPs. Also that it's baffling that no one's gone after Apple over iMessage, what with the way it actively makes text chains worse the moment anyone involved isn't a customer of theirs.
They keep trying to sell me dildo headware.
If you use an extension like Honey, it will warn you that a product is available for lower price without Prime.
How would one prove that the consumer benefits? The in-house brand will immediately be featured more on search results than the vendor brand.
Although this one I believe is more of an attempted power play by the FTC, the others not so much.