
The case for ending Amazon’s dominance - imartin2k
http://timharford.com/2018/02/the-case-for-ending-amazons-dominance/
======
austenallred
Maybe I’m alone in this, but I feel like if you’re going to break up a company
with antitrust regulation you should at least be able to point to a way
they’re abusing their power or are making a worse experience for customers.
The article goes as far as to admit that Amazon is currently not doing
anything wrong.

Should we really seek to regulate away hard-earned (and valuable!) advantages
because they _make it possible_ to abuse the position? Surely we should wait
until they’re actually abusing it?

As an aside, I can’t think of any advantage Amazon has that wouldn’t open up
opportunities for a competitor should they start to abuse them. That’s the
goal of capitalism, in a sense; you have to be great or people just go
elsewhere. Seems odd to fight against that.

~~~
bduerst
> at least be able to point to a way they’re abusing their power or are making
> a worse experience for customers

Didn't Amazon ban products from Apple and Google, that competed with their
own, from their online store? Isn't this _still_ the case even though they
said last year they would eventually allow them again?

If you tell Alexa, "buy me a chromecast", it orders you an Amazon fire stick
instead.

~~~
kylemh
Google Products: [https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-
alias%3...](https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-
alias%3Daps&field-keywords=chromecast)

Apple Products: [https://www.amazon.com/Apple-iPhone-GSM-
Unlocked-32GB/dp/B01...](https://www.amazon.com/Apple-iPhone-GSM-
Unlocked-32GB/dp/B01N9YOF3R/ref=sr_1_1?s=wireless&ie=UTF8&qid=1518899586&sr=1-1&keywords=apple+iphone+7)

[https://www.neowin.net/news/amazon-extends-olive-branch-
towa...](https://www.neowin.net/news/amazon-extends-olive-branch-towards-
google-plans-to-stock-chromecast)

> If you tell Alexa, "buy me a chromecast", it orders you an Amazon fire stick
> instead.

Need a source on that.

~~~
wdr1
Not to be a dick, but you get a slew of sources with a cursory Google search.

[https://www.theverge.com/2015/10/2/9439281/amazon-ban-
apple-...](https://www.theverge.com/2015/10/2/9439281/amazon-ban-apple-tv-
chromecast-why)

[https://www.wired.com/2015/10/amazon-apple-tv-
chromecast/](https://www.wired.com/2015/10/amazon-apple-tv-chromecast/)

[http://www.nydailynews.com/news/national/amazon-ban-apple-
tv...](http://www.nydailynews.com/news/national/amazon-ban-apple-tv-google-
chromecast-sales-report-article-1.2381709)

And their more recent reversal: [https://mashable.com/2017/12/14/amazon-to-
sell-google-chrome...](https://mashable.com/2017/12/14/amazon-to-sell-google-
chromecast-apple-tv-two-years/#7H0qsN_tj5qT)

~~~
austenallred
you could just as easily make the argument against Apple and Google in these
instances for not allowing Prime Video on their platforms.

Refusing to sell competitors’ products isn’t a very good case for antitrust
when you can still buy them in hundreds of other places a click away.

~~~
bduerst
> Apple and Google in these instances for not allowing Prime Video on their
> platforms.

They're allowed. Amazon is choosing not to support it...

------
kemiller2002
I have a little different take on the whole Amazon is too big argument. My
family has owned small businesses for over 40 years. My dad and I have a
vastly different opinion of Amazon. My dad is constantly frustrated by them,
because its "cutting into our business". We simply can't compete on price on
some items, and people choose not to buy products from us when they can just
purchase them and have them shipped home.

Now this isn't a poor us, feel bad for us statement. Like I said my opinion of
them is vastly different. I want them around. I need them around. They make
logistics for us a 1000 times easier. In 3 clicks I can get items ordered that
we need and not have to worry about it. (Need a new storage rack? BAM! Be here
on Tuesday? We need a new printer ribbon? Phone camera + Amazon app = I have
the exact one I need to replace.)

I hear retailers largely complain about them, because they are taking away
business that they have come to rely on. That's not Amazon's fault; that's the
business' fault. This is no different than the Walmart's, Barnes and Nobles
(remember when there were small bookstores?), etc. of the world. Amazon is
different, because it's threatening them too. Amazon is making people realize
that they need to be constantly searching for new products and new sources of
revenue, but the truth is that they should have been doing this all along.
Literally every time I walk into the store, I talk to the manager and ask,
"What are we doing to move forward?" Amazon isn't what should be scaring
people, it should be the fact that they've been asleep at the wheel not
realizing they are driving of the road.

My point is that competing directly with Amazon is stupid, but so is competing
with any other large dominant company. They don't have a monopoly on anything,
it's just that their presence is more widely felt by a larger number of people
at the same time.

~~~
Pxtl
Honestly, small knowledgeable shops owned by enthusiasts for the merch are the
ones with the least to worry about from Amazon. It's the Walmarts and the Best
Buys where the staff is basically untrained in their products that Amazon
beats.

I go to Amazon when I know what I want. I go to a store when I need staff to
tell me what I want.

One day Amazon will finally learn to curate their products in some vaguely
coherent sense of order instead of an infinite pile of semi-differentiated
search results and then Best Buy is really screwed.

~~~
DCF
I used to be a mid level manager at a small regional somewhat-niche retail
chain. The last few years they have started to heavily focus on employee
knowledge. Hiring full time staff whose only job are to be product experts to
help customers, introducing huge amounts of product knowledge courses. They
know they can't beat the big boys on price so they are trying to become THE
local place you go to talk to someone about this specific niche. It has been
working out very well for them.

The niche doesn't even really matter here. It could be car stereos, music,
books, alcohol, grocery, whatever. I definitely think the path to survival for
small retail shops going forward is going to be expert level knowledge and
customer service. The days of people patronizing your store just because its
physically nearby are numbered.

edit: Also, and this is totally anecdotal, but I personally shop at several
places that aren't quite the cheapest (though none are TOO relatively high
priced) but I continue to shop because the staff are far more knowledgeable
than I and their assistance is well worth the extra ~10% in price.

~~~
araes
Notable that yesterday one of the top stories was that Amazon's major book
competitor, Barnes and Noble, just fired most of those exact "expert" staff.
That they claim they cannot afford to loss lead books like Amazon does, so
they must instead discard their highly paid, skilled workers in favor of
minimum wage.

This is the general trend in most of America. Many now fall into one of three
categories. Highly rewarded entrepreneur / chief officer, educated and well
paid but fiercely worked salary, or minimum wage serf. The bands are also
becoming more defined and logarithmically separated. ~$16000 (2^14) [serf],
~$90000 (2^16.5) [educated salary], $500000+(2^19) [wealthy / gentry]

Further, the middle section is mostly bleeding downward due to factors like
the above mentioned layoffs (Sam's Club did similar), the increasing relative
cost of education / health care / other barriers to entry, and the inflation
adjusted erosion of buying power.

Its an argument to say the path is towards expert service, yet with the range
of social review / recommendation pages / boards available now (much of which
Amazon itself cultivates), even newcomers can quickly become informed if they
are so inclined. No wonder many now prefer to use automated isles rather than
human checkouts. The staff provide little and often just push annoying
suggestive sells.

------
p0rkbelly
Amazon accounts for 4% of ALL retail sales. Where are the calls about Walmart?

I think we have to see the bigger picture. Growth, momentum, and investments
should be a good thing.

Dominance is not illegal. Nor technically is a monopoly. Using a monopoly
illegally is.

Having said that we would have to fundamentally change the definition of a
monopoly in order to break up the party responsible for 4% of the market --
and have a record of reducing prices.

~~~
j9461701
I think you hit upon a really important idea. Amazon has been investing in
itself for years, and focusing on longer term growth and success even at the
cost of short term profit maximization. Which is... exactly what we as a
society want. We want companies to think long term, to be investing in
innovative new ways to succeed and relying on growing outward and always
trying to be on the cutting edge.

All that stuff is great, far better than companies run by finance degree
holding businessmen that haven't invented anything in 3 decades and keep
existing purely through rent seeking or quarter-to-quarter profit pumping.

To bring Amazon down now, before its had a chance to reap the benefits of its
prudence feels like the worst possible signal we could give the market. It'd
basically be saying "Don't bother actually focusing on technical improvement,
because if you ever do get really big as a result the government will step in
and take it away from you".

Though the article does kind of share this sentiment, so kudos to Tom Harford:

>If that is a worrisome state of affairs — and it should be — then Amazon is
the shining counterexample. The online retailer’s strategy is driven not by
short-term profit but by investment, innovation and growth. If only there were
a few more companies like Amazon, capitalism would be in a happier spot.

I suppose the core disagreement then becomes I don't think the threat of
Amazon becoming abusive is worth the negative signal going after them would
generate, and he does. I'd be interested in reading a 2nd article from him
that delves more specifically into this part of the issue.

~~~
padobson
_I don 't think the threat of Amazon becoming abusive_

The idea of regulating on a hypothetical is insane to me. If Amazon becomes
abusive, the US Government will still be able to take them. Let's not start
prosecuting pre-crime because Bezos is super rich.

~~~
workblood
That's because you're papering over the abuse that Amazon already inflicts on
workers and rural communities and you need to make up for the the logical hole
left by a bad-faith deregulation starting point of your argument.

~~~
sokoloff
Has Amazon made it worse for those groups than if Amazon didn't exist? I think
generally not. Don't like Amazon's working conditions? Pretend that Amazon
didn't exist and stop going to work there.

~~~
waterhouse
I note that this is a fully general argument for the permissibility of
sweatshops of all sorts (as long as the company hasn't done anything other
than set up and run the sweatshop). I also agree with it.

~~~
workblood
I really wonder why the the exploitation of workers and the immiseration of
people who have no hope for economic mobility is acceptable in any
circumstance. "Simply" operating a sweatshop in capitalism is by definition an
effort to expand it.

~~~
waterhouse
The idea is, miserable though the conditions in a sweatshop may be, they are
better than the alternatives the workers face, or else they wouldn't choose to
be in the sweatshop. If donating $0 to that country is permissible, then
surely doing something that makes things _slightly_ better is at least as
permissible.

Also, if the company that runs the sweatshop is in fact making huge profit
margins from it (I assume that's one thing "exploitation" implies), and if the
company isn't especially unusual, then that suggests there's a lot of room for
some other company to set up another factory, offer a slightly higher wage or
better conditions to attract workers away from the first one, and still make
great profits. If there are no artificial barriers to this, then foreign
companies competing for workers may end up _really_ improving matters after a
while. Contrariwise, if there are significant risks to setting up more
sweatshops—e.g. suffering bad PR, running afoul of new or newly interpreted
legislation—then the few sweatshops will tend to remain few and miserable, and
be run by companies that are more immune to the above dangers (probably large,
with good legal departments and/or political pull, and those that don't depend
as much on a good reputation).

This implies that people who manage to cause serious problems for companies by
protesting their use of sweatshops are probably making things worse for the
workers. It is interesting to reflect on.

------
rweba
The author does not offer ANY evidence for Amazon's supposed "dominance".

How exactly is Amazon dominating?

What percentage of online retail sales does Amazon have? What percentage of
TOTAL retail sales (online and offline)?

And more importantly, how is Amazon's market position harming consumers?

It's remarkable that Tim Harford wrote this entire article without citing a
single figure or statistic.

What seems to be going on is that there is a PERCEPTION that Amazon is totally
dominating and monopolizing retail, but retail is so big that you can grow
massively and have revenues of a $100 billion without coming close to being a
monopoly.

Points to note:

(1) Amazon has no MOAT. Anyone can set up shop and start delivering things to
people. There is no switching cost.

(2) Amazon has MASSIVE well-funded competition in all of its areas: online
retail (Walmart), Cloud (Google), video streaming (Netflix), Books (the big
publishers who own the content)

(3) You can live quite comfortably and cheaply and conveniently get almost
everything that Amazon has to offer without having to use Amazon if you don't
want to (books, retail items, cloud services, etc.). This is not the case with
pure monopolies like utilities, or monopolies like Intel or Microsoft where
completely avoiding them is a big pain for the average person.

~~~
rocqua
Just to counter the statement:

> Amazon has no MOAT.

Consider the following:

\- Distribution. Amazon has their own distribution system, and has deals with
third-party distributors

\- Data. Amazon has a lot of data on consumer buying patterns.

\- Books. When selling books online, amazon is apparently a requirement for
success.

These aren't the best moats, but they are something.

~~~
gaius
_Data. Amazon has a lot of data on consumer buying patterns_

I have a folder of screenshots I keep of hilariously bad Amazon product
suggestions. I have been a regular Amazon customer since the '90's and I can
say with a high degree of confidence that their consumer data isn't that
valuable. All the recommendations that make sense are directly off products,
if I buy one flavour of food for my cats it will suggest another but hell,
anyone can do that. It's not even smart enough to suggest other cat-related
products.

~~~
guitarbill
It's not even smart enough to realise most items I buy are items you only need
one of. E.g. if I buy a screwdriver set, or desk, or frying pan, I'll keep
getting recommendations for other similar products. I'm pretty sure a random
product suggester could do better.

------
fnl
This article misses the real issue of "the Amazons" of today: The low-wage
workers Amazon has built it's empire on (or, the "gig-economy" of others), and
the massive scale, legal tax avoidance schemes only companies with global
scale can play with.

If anything, companies of a certain revenue level should be taxed by
(localized) revenue, not (globalized) gains. That alone would already go some
way to put SMEs on a little more equal footing.

Addendum: In fact, we should tax _all_ companies by a progressive revenue
scale.

~~~
p0rkbelly
The hourly employees are paid significantly more than Walmart/Best Buy/Target
employees. In my home state, they start at $14-$15. About 2x Walmart.They also
have programs for veterans to make even more.

They will also pay for community college degrees for those employees -- and it
doesn't have to be related to their job nor do they have to stay at Amazon. I
believe only in certain fields though, like STEM degrees.

~~~
fnl
Well, those are not really SMEs with high quality jobs either...

I'll happily accept your word that Amazon's sweatshops are better than X's
sweatshop - but that just makes more shitty jobs...

~~~
guitarbill
Ah yes, the world without "shitty jobs" utopia. "Shitty" as compared to what?
Who should do those jobs? Robots?

Assuming what parent said is true, except for paying employees much more than
competitors and education options, what should they do in your opinion to make
the jobs less "shitty"?

~~~
pessimizer
> Ah yes, the world without "shitty jobs" utopia. "Shitty" as compared to
> what? Who should do those jobs? Robots?

For the life of me I can't figure out how this argument would be different if
we were talking about actual slaves rather than terrible jobs. If we decide
that labor standards are shitty, we dictate that wages be raised, that
children not work, that machines be as safe as possible, etc.

~~~
guitarbill
My issue was with "shitty", which is pretty vague. Whatever you consider the
bottom tier = "shitty", okay, let's do something about those. Now, bottom tier
= "shitty" again. Okay, so we need to define a minimum limit of shittiness,
which we're all happy with. That is called minimum wage, labour protections,
etc. And this differs from country to country, depending on how society values
people with limited options. Of the top of my head, two things that would
predict this are a countries wealth, and how much influence corporations have
in the political system, i.e. how broken/corrupt it is. However, I must admit
that I'm living in a fairly wealthy and "socialist" European country, so it's
easy for me to say.

I can't figure out if OP is hating the game or the player (Amazon), but the
former is a bit of a tangent w.r.t. to the article.

------
drawkbox
Amazon re-invests nearly everything back into the company, that is to be
desired and they deserve to win because of it. Competing with them is hard due
to this intense research and development investment culture they have.

It would be hard to claim they are a monopoly with Wal-mart out there but also
in cloud computing, there are many competitors. Amazon just knows how to
develop not only products but markets for their product.

Amazon has helped small to medium retailers sell on Amazon and small to medium
development/technology companies compete with infrastructure.

Amazon will hopefully disrupt healthcare with their new venture with Berkshire
(who owns Geico and should make healthcare/insurance more consumer focused
like auto insurance) and it is a welcome initiative. They might even solve the
fixed pharmaceutical pricing market.

------
jacksmith21006
The problem is breaking up Amazon or any of the other big tech will just be
replaced with another.

The issue is things gravitate to winner take all or at least most. We had tons
of ecommcerce companies but now one dominate.

We had tons of search engines and now one dominate.

I believe the issue is the Internet. I was involved in 86 and honestly thought
it would be the most democratizing thing ever.

But intuition was wrong and instead it is causing capitalism to break. Instead
we are getting crazy concentration with companies and solutions.

~~~
2muchcoffeeman
Isn't this just the 80/20 rule though?

What inherent property of the internet would prevent the majority of people
flocking to the few websites that are slightly better than their counterparts?

~~~
mzzter
There isn’t one that I can think of. The Internet is accessed using just a
handful of browser clients. That in itself drives most users to start browsing
at only a few websites.

------
obblekk
This article concludes by saying "... wouldn't two amazon's be better than
one?"

But I didn't find any case made for this claim in the article.

~~~
IlGrigiore
The point of having a direct competitor to Amazon is to limit the possible
actions they could do. Right now Amazon is well behaving and its supported by
the customers. However, if Amazon were to change its actions, we would have a
near monopoly that is not positively affecting people. Therefore, the theory
of the author is to limit the power of Amazon by entroducing a competitor that
would challenge the dominant position instead of waiting for the negative
outcome.

~~~
prepend
Amazon has many direct competitors. It’s likely that this is why they are
behaving so well. But my guess is just Bezos’ philosophy as a driver.

------
dpweb
OP is dreaming. The US has perhaps never been more pro-business, hands off,
and unwilling to do any anti-trust, than they are now. They will not be
breaking up any companies any time soon. A 1990s Microsoft anti-trust case,
you wont see.

In fact I think we’ll see corporations increasing their influence. acting as
banks, keeping private armies, controlling political affairs.

~~~
the-dude
And the MS case resulted in basically a flick on the wrist, nothing else.

~~~
maxxxxx
It definitely slowed them down a lot. Things could be looking very different
if there had been no action.

~~~
quicklyfrozen
Yeah, they might not have made that investment in Apple in 1997 -- where would
they be today with no Apple?

~~~
dredmorbius
That was driven by an Apple lawsuit.

[https://en.m.wikipedia.org/wiki/Apple_Computer,_Inc._v._Micr...](https://en.m.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microsoft_Corp).

------
dpweb
Products are commodities and they often do not win on price before shipping.
Shipping is the secret sauce. Their ability to ship at lower costs.

I used to prefer ebay, prices are better, but after 2day shipping, you cant go
back.

I can start an online retailer tomorrow, but i cant ship a package for less
than $3. China too. I bought an iphone case for 80 cents, problem there you
have to wait 3 weeks but their shipping too also government subsidized.

You wont find any huge corporation that wasnt somehow subsidized with public
money.

~~~
dingaling
> but after 2day shipping, you cant go back

Maybe it's a US-market issue, but I don't understand why Amazon is lauded for
two-day shipping as if it is unique.

They don't have any particular delivery logistics genius except bulk-purchase
discounts from the carriers.

The 'Amazon Prime' air cargo fleet is leased from an industry-standard cargo
airline, nothing unique or exclusive.

And they make silly errors that show how their shipping system works; they
won't ship lithium batteries ( or even DSLR cameras ) to Northern Ireland even
though they have a logistics warehouse here. Because the inter-warehouse
backhaul is via Royal Mail, who won't carry hazardous items.

~~~
Spooky23
They made massive capital investments that allowed Amazon to bypass carrier
routing.

So they use government subsidy to deliver to expensive addresses (USPS), UPS
to handle exceptions, (and to tie up capacity from competitors) and job out
delivery to cut rate services whenever possible.

Few other retailers do that. A retailer like Willams Sonoma has one warehouse
in northern Mississippi and one in Nevada, close to UPS/Fedex hubs. They
probably get 3 day delivery for 50% of orders, but can not commit to anything.

------
deegles
I don't believe that most investors really have a grasp on how "long term"
Bezos' thinking is. It's not multi-year, it's multi- _decade_... maybe even
multi-century[0].

This is all just speculation from his involvement with the Long Now
Foundation, but one of their goals is to foster long lived institutions... I
believe that this is Bezos' vision for Amazon and that investors hoping for it
to stop its self investment and growth are in for a _very_ long wait.

[0] [http://www.wideopencountry.com/there-is-a-10000-year-
clock-u...](http://www.wideopencountry.com/there-is-a-10000-year-clock-under-
construction-in-west-texas/)

~~~
moosekaka
Bezos dream of shifting all heavy industry and mining to the asteroids would
be so beneficial to humanity and the planet, that whatever short term pain
(short as in timescale of decades) to either current incumbents business
performance or consumer choice should be balanced against this promise.

------
amarant
Meh, Amazon does good things, many different good things, so we must stop
them? If they start abusing their position we can have this discussion, but
until then I'll enjoy the good they provide instead..

This seems more like jealousy they're doing so well. Screw that

------
xg15
I think a good criterium for antitrust applicability (which the article
implicitly mentions) is potential for damage: Even if a company doesn't hike
prices, cut quality or blocks customers _right now_ , how easy _could_ they do
this and how large would the damage to society be?

I think by that metric, Amazon (and others) should ring some alarm bells: If
Jeff Bezos woke up tomorrow with an irrational hatred of redheads, he could
immediately decide that his company should stop doing business with any
redhead and denand that any partner company does the same - or they, too, will
be kicked off Amazon. That would probably put redheads at a severe
disadvantage in day-to-day activities pretty quickly.

Another thing I haven't seen discussed so far is creating sub-markets within
your product. E.g., in the market for smartphone apps, Google and Apple are
not large competitors or even monopolists, _they are the government_. They
have full information about each market participant, can subject all
participants to arbitrary regulations and instantly sanction players who don't
confirm. Except, unlike an elected government, they are not required to
justify the regulations, make them fair or even make them completely public.

Im kind of surprised such "sub-markets" seem to be completely unrelated so
far.

------
RestlessMind
As much as I believe in free markets and less regulation, I believe we do need
a law / regulation which disallows companies to use profits from one business
to subsidize completely unrelated business while undercutting economics of the
second one. For startups, they should be allowed to subsidize low prices only
for a specified duration of time or until they hit a threshold of marketshare
in a given market.

So Amazon should not be able to use AWS profits to subsidize retail, when
other retailers don't have such cushions. Google should not be able to use Ads
profits to undercut economics of browser or mobile OS. Uber/Lyft should not be
allowed to capture more than 5-10% of SF/NYC taxi market unless they are
profitable there.

Just to be clear - if someone can upend an entire business while being
profitable, they should be allowed to flourish (eg. Netflix with rental
movies, Apple with phones).

One possible exception - if there is no established business in a field and
someone wants to move the technology forward there, they should be given some
exception. So SpaceX can experiment with their rockets and Google can
experiment with self driving cars because they won't be competing unfairly
with any competitors.

Finally, I really hope EU adopts regulations along these lines. I have no
hopes from US or China.

~~~
canuckintime
> Apple with phones

Apple uses their phone/hardware profits to upend other businesses. What Apple
is doing to Spotify is the most recent example. Apple runs their iTunes/Music
on a break-even basis. Apple has the dominant smartwatch market share. Apple
runs adverts pushing Apple Watch+Apple Music combo. Apple privileges their
Music app on the smartwatch and doesn't provide the needed APIs for Spotify to
compete on that platform. Apple Music marketshare is growing and might catch
up to Spotify soon.

~~~
RestlessMind
Two points:

1\. Apple would be forbidden to subsidize unrelated unprofitable businesses
for too long.

2\. Developing a feature of an existing business is okay under my proposal (so
iPhone upending P&S cameras is okay because camera is just a feature of iPhone
and hence not completely unrelated business).

~~~
adventured
That would unleash a pandora's box of corruption and abuse by inviting
bureaucrats to even more directly control the economy through vague notions
such as "too long." If you think the system is bad now, it'd be 10x worse if
what you're suggesting were implemented.

Every layer of bureaucrat control and vagueness that is applied, dramatically
harms the economy and brings it down toward stagnation of zero growth. We got
30+ years of that demonstration from France, where their GDP growth and wage
growth has averaged 1/4th to 1/5th that of the US over the last several
decades. Similarly Japan has a hyper regulated and rigid economy, with
predictably bad growth as a consequence. As the US has grown more regulated
over the last 40 years, its GDP growth has dramatically slowed (while the
global economy has routinely grown far faster, and the US share of the global
economy has not fundamentally changed).

Instead of considering these political concepts in an idealized fantasy
scenario, you have to actually apply them to things as they are. You have to
apply them with politicians as they exist in the US today. It would be the
worst nightmare imaginable economically, next to moving to actual Socialism
(ie direct, literal corrupt control of the economy by bureaucrats).

~~~
jbros
I just searched the gdp per capita of both the us and and France since 1960 to
2016 and you could not be more wrong.

------
indubitable
For some interesting context on "Amazon's dominance", in 2017 they managed a
total marketshare of 4% of retail. Surprisingly even if we restrict it to
e-commerce only, they 'only' achieved 44%. [1]

[1] - [http://www.businessinsider.com/amazon-captured-4-of-us-
retai...](http://www.businessinsider.com/amazon-captured-4-of-us-retail-sales-
in-2017-2018-1)

------
ekglimmer
Not sure if it was intentional or not but I enjoyed the irony of putting two
Amazon links to the book "The Box" directly in the article.

~~~
crtasm
As well as his own book at the end of the piece; be the change you wish to see
and all that.

------
pessimizer
Sorry, it'll never happen. Not having to pay taxes and being the best of the
tiny group of first movers in the online catalog shopping space space has
allowed it to eliminate both brick and mortar and online retail competition.
It's even confident enough in its institutionalization that it's been
gradually lowering the quality of its service while making wildly successful
investor fueled infrastructure plays for both the basic fabric of the internet
and the logistics of all physical world home-deliveries.

A government whose elements nearly-unanimously insist that a company isn't a
monopoly until it both controls 100% of all possible industries that can be
substitute products for its own industry and owns all of its suppliers, could
"ironically" never muster the power to break up a theoretical business that
met that standard. At that point, that business has become an inseparable part
of the government, itself.

Sorry for the scare quotes around "ironically," but I can't help believing
that this mistake is intentional, not accidental. People who insist that a
company has to be all-powerful before it's necessary to break that company up
(in order to protect the improvements from competition that free markets use
to justify themselves) can't possibly fail to see that all-powerful companies
can't be broken up, because they are _all-powerful._ It's like having a law
against dictators that only kicks in once someone has completely taken over
the government.

~~~
ars
> Not having to pay taxes

Amazon pays (collects) taxes nationwide:
[https://www.theverge.com/2017/3/24/15055662/amazon-us-
sales-...](https://www.theverge.com/2017/3/24/15055662/amazon-us-sales-tax-
collection-all-states)

------
adventured
So you want Amazon to provide incredible products and selection at the lowest
reasonable prices, fast delivery, with the absolute best customer service.

But you don't want them to become giant and or dominant in the process of
providing such an extraordinary service.

No no no, we should have two of them instead. Why? Because! Dominance! What
would two of them do better than one is already doing in terms of providing
service? No answer. Maybe the twins would lower prices further in a
competitive death spiral and both could go bankrupt thanks to their currently
barely existent profit margin.

How could anyone fail to miss the absurdity inherent in the premise? We want
you to be incredible for the consumer, but not too incredible such that
everyone uses you and you get big and dominant by doing it.

So Amazon should provide ok but not great products, ok but not great delivery,
ok but not great customer service (or some combination of good and
mediocrity). Maybe they should regularly mistreat customers like Comcast and
charge far higher prices or provide really shit customer service. Really
overall just bring their business game down to a lower level, so other
mediocre companies can keep up with them. That'll show the consumer.

------
aj7
“Yet for all this, I am deeply uneasy about Amazon’s apparently unassailable
position in online retail.” I have found online ordering at both Costco and
Walmart to be easier and much more efficient than Amazon. NewEgg, Lowe’s, Home
Depot are all websites I visit more than Amazon. Part of this is I am not much
of a media consumer. But all, I do not have time for distractions and
“suggestions” when online purchasing.

~~~
zanny
Thinking about it if anything other services are finally catching up. I've
ordered as much stuff in the last 2 months from walmart and best buy as I have
from Amazon despite being a prime member.

There isn't really as much of a network effect to Amazon they can abuse. For a
lot of people, the day they jack up prices to exploit their position is the
day a lot of people tab over to walmart or target.com and buy the thing from
there instead.

------
djhworld
It's a tough one.

I've been an Amazon Prime customer for a few years now and notice my buying
habits centralise further and further on Amazon.

The main "selling point" for me, and this is where Amazon's dominance probably
doesn't help things, is they own every facet of their distribution chain. So
when they say on the website "guaranteed delivery tomorrow!" I can be certain
that the item will arrive tomorrow. Before Christmas last year I needed to get
a thunderbolt to HDMI adapter for my Mac so my family could play a game,
Amazon got that to me on Christmas Eve. All turned around within the space of
about 18 hours.

Additionally the Amazon lockers make it simple for me to pick things up on the
way home from work (there's one just outside my tube station).

I'm not sure what other businesses can do to compete really, Amazon isn't
necessarily always the cheapest place anymore, but they offer the convienience
- and I haven't seen another business be able to match, or even beat that

------
Cknight70
Would there really be any benefit from splitting up Amazon right now though?
Assuming there were two symmetrical Amazons, both focusing on consumers,
innovation, and growth, the only way I can see either being competitive is to
cut corners.

In my opinion, there would be a much more compelling reasons to split up
Amazon if they ever begin to focus on profits.

------
tonyedgecombe
I'm not convinced, I stopped buying from Amazon and haven't had any problems
finding other suppliers.

------
randomsearch
I agree with Peter Thiel’s observations about allowing monopolists to reap the
rewards of their innovation. And almost no-one (ok, Elon, I heard that cough)
has innovated as much as Amazon in the last decade.

That said, banning chromecast etc is a dangerous precedent and I’d like to see
Bezos apologise for that. It’s an unusually shortsighted move that does not
fit at all for me.

If you’re going to attack a tech giant for being rubbish and monopolistic,
Facebook is right there doing very little other than milking ads, acting
irresponsibly, and burning a whole lot of time out of the economy.

------
prepend
I remember a little bit of debate and a lot of consternation in 2002/2003 on
whether a preemptive strike on Iraq was justified given their likelihood of
having/using WMD. And in Minority Report how the theme was about how
convicting on precrime was a right violation.

But has society really shifted thinking that acting based Amazon’s potential
future dominance is a substantial discussion? Our predictive ability is not
very accurate to be able to act preemptively (eg, no WMDs in Iraq).

So ending Amazon’s pre-dominance seems rather inefficient and bad for society.

------
ourmandave
Related: Scott Galloway's take on breaking up Amazon.

[https://www.youtube.com/watch?v=1ebKI4x_k8A](https://www.youtube.com/watch?v=1ebKI4x_k8A)

------
feralmoan
Amazon is the literal expression of pied piper consumption. You know what
would mess with Amazons dominance? Consumers having critical thinking skills
enough to make long term decisions. Everyone here knows what the game is,
which is kind of disgusting/amusing/predictable. Carry on :) Particularly you,
Bezo/Freud/Bernays, you lovable sociopaths. Here for the comedy not for the
crowd.

------
criddell
From the article:

> Punish it for success and you send a strange message to entrepreneurs and
> investors.

Bezos is one of the wealthiest people on the planet. Do they think breaking up
Amazon at this point is going to discourage anybody? Like maybe the fact that
you can become a billionaire but probably not a trillionaire means I'm
probably not going to launch my idea.

------
ilaksh
Amazon and other large companies and even institutions should eventually lose
most of their business to distributed applications running on peer-to-peer
protocols or light-weight companies built on those types of public protocols
taking small cuts.

This includes Amazon, Google, Uber, Waymo, Instacart, the US dollar, banking
and government in general.

------
bahmboo
Amazon is a convenience not a monopoly, not even close. They have 4% of the
retail market share.

------
skookumchuck
Any other country would love to have a company like Amazon. But the US wants
to tear it apart.

------
sgwealti
If anything it should be split into 3 companies - retail, logistics, and AWS.

~~~
beeflaw
Amazon logistics without retail is pointless, retail without AWS (etc) would
be highly unprofitable.

------
OscarTheGrinch
I've tried supporting the little guy with my online purchaces, and been ripped
off several times, whereas Amazon has always put things right.

Do we really want to go back to the wild-west days of online retail?

~~~
moosekaka
Unless the little guys were the original creators of whatever wares you were
purchasing from them, their role in the value chain was merely that of a
middle man. In that case, what moral, economic or societal benefit would come
from purchasing from the little guy vs a giant retailer?

------
peoplewindow
The author laments the rarity, excellence and thus dominance of companies like
Amazon, although this article could have been about Apple or Google too.

Rather than ponder to what extent if any government regulation is the answer,
it'd be better to ask _why_ Amazon is so dominant and _why_ competitors have
such a difficult time competing.

This isn't specific to Amazon. "Disruption" is a word that has come to mean
tech firms, which we can roughly define as firms founded by computer
programmers that make heavy use of computers, entering a new market and
rapidly out competing the incumbents. These firms start with no particular
competitive advantage and frequently have major disadvantages. When Bezos
started selling books he had no knowledge of the books business, no
warehouses, no logistics operation, no business relationships and no capital
beyond his own savings and $300k his parents invested in the business. His
_only_ edge was that Bezos had a computer science education and knew
programming. Despite starting with literally nothing, Amazon now controls most
of the entire book sales market. There was a story on HN recently about how
Barnes and Noble is basically giving up and laying off employees.

Same thing for Steve Jobs and phones or Google and mapping. All relatively
mature industries, all obliterated the incumbents (well, in phones the
incumbents only survived by adopting Android wholesale). But Amazon is the
best example because retail is such an old and established industry.

I've come to think that a big part of this is down to the different way
programmers think, vs regular 'business people'. Any of the existing retail
giants could have built an Amazon. Bezos didn't have any unique eureka-moment
patent or other moat. And they all started way ahead of him in having
warehouses and distribution networks. But they didn't, they never successfully
did that, I don't think they ever _could_ , because they were run by people
who weren't software developers.

There are two big parts to this:

1\. Understanding software projects and software developers.

2\. Clarity, precision and energy of thought.

(1) is obvious enough, people with a business background can't judge the skill
of developers or quality of software directly so they have to rely heavily on
proxies that aren't very good - things like "is this project hitting its
projected deadlines" which projects never do, or "what are other companies
doing" which creates herd behaviour and eliminates edge, or "is this solution
backed by IBM or Microsoft". They tend to make basic errors like saying, well
this company over in India says they'll write the software we need for 1/10th
the cost of our own development team, and software is software so that's a
great saving! And they don't understand the vast gulf in skills and quality of
the possible outcomes, or how critical quality tech is to their business.

(2) is more controversial, but I can't escape the feeling that programmers
tend to think a lot more clearly and rigorously than many business people.
Writing software demands intense focus and concentration for long periods,
very precise thinking, and computers cannot tolerate internally inconsistent
thinking. Way too many people simply cannot or will not actually think things
through in detail. Their thinking is often vague, contradictory, shallow and
they are constantly looking for clever ways to get out of thinking at all,
like by outsourcing their thought to consultants or repeating buzzwords they
don't really understand (IoT, AI etc).

I'm not arguing that programmers are incapable of self delusion, woolly
thinking or anything like that - I've seen plenty of dumb behaviour from
supposedly smart people. It's more like maybe they _can_ do it, if they are
reasonably free of biases and are given enough time and are motivated enough.

But if it's true that programming improves your general capacity for thought
then we should expect to see tech firms systematically out-compete every firm
in which the playing field is level and not radically tipped in favour of
incumbents by regulators and governments. Retail is not very regulated so no
surprise that Amazon is systematically taking over.

 _Edit:_ SpaceX is a better example of Amazon-style disruption than Apple.
Musk went from knowing computer programming and nothing about space at all, to
radically disrupting the existing aerospace industry with reusable rockets, in
less than 20 years.

~~~
sah2ed
Occam's razor applies. I think there is a much simpler explanation of why your
examples are able to "disrupt" the industries you cite -- those founders felt
"with the advances made by mankind, this kind of business idea should exist"
then they go out to build such a business and with some luck, they manage to
succeed.

For every successful Steve Jobs, Jeff Bezos and Elon Musk, there are several
competitors (e.g Jean-Louis Gassée/BeOS, Jonathan Bulkeley/B&N and Shai
Agassi/Better Place respectively) who failed.

Building a successful business like Apple, Amazon or Tesla is much much harder
than you are admitting. Programming ability will only get you so far before
the unavoidable laws of economics strikes home.

~~~
peoplewindow
BeOS was trying to disrupt the operating system market, so he was up against
other programmers on their home turf. That example doesn't refute my thesis.

I hadn't heard of Shai Agassi before. He seems a better counter-example,
although from his Wikipedia page it sounds like he went from getting a BSc in
CS directly into 'entrepreneurship' and holding executive positions at various
firms. I don't see anything in the way of an actual career writing software
first, like Bezos had, not even a few years.

Jonathan Bulkeley doesn't have a Wikipedia page but from what I found he has a
BA from Yale and never really tried to disrupt anything? Maybe I am missing
something about his story.

Of course building a business is hard. I'm doing it at the moment so I'm well
aware of that! I am not suggesting that merely knowing programming magically
grants guaranteed success. But when you look at the type of people who are
disrupting whole industries, at least in the sense the word is used, it
invariably seems to be entrepreneurs who had some grasp of software or
hardware engineering first.

~~~
sah2ed
Some links on Jonathan Bulkeley's time at B&N:

Joined: [https://www.cnet.com/news/short-take-barnes-noble-names-
new-...](https://www.cnet.com/news/short-take-barnes-noble-names-new-online-
ceo/)

IPO: [https://nypost.com/1999/05/26/not-one-for-the-books-bn-
com-h...](https://nypost.com/1999/05/26/not-one-for-the-books-bn-com-has-
respectable-not-stellar-ipo/)

Resigned: [https://www.ourmidland.com/news/amp/Barnes-Noble-com-
Names-N...](https://www.ourmidland.com/news/amp/Barnes-Noble-com-Names-New-
CEO-7058015.php)

------
dawhizkid
I really hope Costco steps up and saves itself from Amazon.

~~~
ako
If they do, probably by reducing costs, it will likely be at the cost of
manufactures, farmers producing the goods, and employees.

~~~
dawhizkid
I mean they've completely underinvested in technology and new experiences. The
in-store experience and the website feel like they haven't changed in 20
years. Maybe that is part of the Costco charm, but the "if it ain't broke
don't fix it" attitude is going to haunt them if they don't change.

Lots of headwinds in the next decade or so: younger consumers aren't driving
as much (i.e. to big box stores with giant parking lots in the middle of
suburbia), they are moving from suburban to urban centers, they're having
fewer kids, buying anything online including perishables has become easy, etc
etc.

------
pascalxus
Before you go after Amazon, I think there's far more egregious fish to fry:
like the big ISP cartel and the pharmaceuticals

------
greggman
just an anecdote but a Chinese person I met told me how crap Amazon is for
buying clothing vs taobao. she said taobao has models for most clothing and
showed us some examples.

seems like there is plenty of room compete with Amazon and that's just one
example.

------
moocowtruck
please no, amazon makes life better, saving me so much time to focus on other
things.. i do NOT want to go back to the time before that

