
Amazon’s Antitrust Paradox (2017) - diggernet
https://www.yalelawjournal.org/note/amazons-antitrust-paradox
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throwayEngineer
I find it odd people call Apple, and Amazon a monopoly, when it's very easy to
not use Apple and Amazon is inferior to Walmart Online.

I don't have a reason to use either company outside obscure niche
circumstances.

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chumali
Neither are perfect monopolies, however to deny that they wield significant
monopoly power is patently absurd.

Monopoly power is not simply an issue of consumer choice - there are
considerations around prices, coercion, competitive barriers and other
outcomes, not just for consumers, but for competitors, suppliers, workers,
investors, citizens, etc.

~~~
simonh
Right, so Microsoft holding a near-monopoly on desktop operating systems was
not found to be illegal, but leveraging that power in anti-competitive ways
was. Similarly Amazon doesn't have to control a monopoly on online retail, web
service hosting, etc. It just has to be found to use it's dominance in illegal
ways and it's not clear to me that it has done so. Similarly with Apple.

One nuance I'm not clear on is power gained through the monopoly ownership of
a proprietary technology. So for example Apple was able to exert considerable
influence over AT&T and later get unprecedented concessions from carriers in
order for them to support the iPhone. Arguably their power over the App Store
gives them similar leverage. But is that anti-competitive if it simply flows
from the superiority of their proprietary software? Arguably no, it's entirely
fair enough. They are not using dominance of the market, but legitimately
exploiting their ownership of their platform. But couldn't Microsoft have used
the same argument for Windows?

I'm genuinely conflicted on this. Simply gaining advantage by being 'better'
can't be enough to be illegal surely? That would create truly bizarre and
user-hostile incentives. However when you gain a monopoly position and then
exert that power, it becomes anti-competitive. How do we tell when a company
crosses the threshold? Nobody in 1997-2010 could argue Apple had monopoly
power in the phone market and it had almost exactly the same policies back
then. Now maybe it does hold some form of monopoly or at least market
dominating power, but applies basically the same policies, so is that now
illegal? Maybe policies appropriate for a smaller player can be inappropriate
beyond a certain scale.

That might be true, I'm willing to accept that. As a customer in 1998 I chose
to by an iPhone and accepted Apple's controls over the platform as beneficial,
but a new purchaser now might feel compelled to do so due to Apple's dominance
of the App ecosystem and resent the locked down nature of the system. That
person might legitimately cry foul and maybe have an honest grievance. How
does that work? How are Apple supposed to know that their existing, standing
policies have now become a violation of the law where previously they were
not? It genuinely perplexes me.

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kybernetikos
> It just has to be found to use it's dominance in illegal ways and it's not
> clear to me that it has done so.

Amazon had a struggling video business, but that wasn't a problem, because
they had a near monopoly on online shopping, so they bundled the cost of the
video service into the delivery discount program 'amazon prime'.

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simonh
By itself that's probably not a violation if it doesn't actually hurt anyone,
Netflix still seems to be doing fine. Lets assume that changes though and
Prime video comes to dominate, then it could be a violation. This is my point,
it seems like it's only a violation if it works, or works too well. There's a
lack of clarity, at least to me.

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kybernetikos
They aren't harming netflix yet, because even with a captive audience, the
offering isn't good enough to make people feel like they don't also need
netflix. I'd be very surprised if there hasn't been significant harm to second
tier services though - people might want to supplement netflix with something,
but if they already have amazon prime, they're probably a lot less likely to
supplement it with now tv, Hulu, etc

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Nasrudith
But isn't that the exact opposite of a monopoly? They are creating more
competition in another space that is difficult to enter.

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kybernetikos
Imagine how you would feel if people weren't buying your bicycles because the
water company was charging inflated prices for water and giving away free
bicycles.

Incidentally, the fact that Amazon can choose to set the price for 'free, fast
delivery of packages' so high that they can slide a video streaming system in
there for 'free', is one of the signs of monopoly power, and bundling as a way
to push into unrelated industries is a well accepted example of monopoly power
abuse.

> But isn't that the exact opposite of a monopoly? They are creating more
> competition in another space that is difficult to enter.

The key is that they're using their monopoly power dominance of one industry
to gain advantage in an unrelated industry.

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zombiemeat
When I worked at Amazon I was required to take legal training on the used of
the words 'market', 'marketplace', 'market segment', and how to frame speech
about Amazon's relationship with competitors. I was an individual contributor
programmer. I always wondered how much of that training was really about CYA
and how much was indoctrination.

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urs2102
Great piece! For reference, here’s the comment thread the first time posted:
[https://news.ycombinator.com/item?id=13562968](https://news.ycombinator.com/item?id=13562968)

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remarkEon
That was a weird trip back in time.

Really curious how people feel today, especially in the light of potential
anti-trust action against Google.

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ikeboy
Amazon needs to be broken up. Marketplace should be distinct from Amazon
retail. They can compete on the independent platform like anyone else.

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Nasrudith
Serious question - why are store brands okay for every other chain then? It is
a popular slogan-meme but I am puzzled as to why that common practice which
predates them is suddenly abusive for them aside from cynical pretexts.

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mrep
Idk, but I find it especially funny because the ones Amazon basics is
competing in are the silliest businesses to try and protect. Almost all of
them just buy the same product from china and have the manufacturer slap their
label on it. There are dozens of these "brands" whose only function is to
handle the batch ordering, shipping it to amazon who then actually handles the
logistics, and customer support which usually just involves trying to bribe
anyone who gives a bad review into changing their rating.

It's not even like Amazon bans the other brands from selling on their store.
They are free to keep competing with amazon for the same exact product. It
sounds like they just don't want more competition for their low value add
business.

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AmericanChopper
> The Note closes by considering two potential regimes for addressing Amazon’s
> power: restoring traditional antitrust and competition policy principles or
> applying common carrier obligations and duties.

The common carrier approach always seemed like the most rational way to
address problems like this. One of the ways companies like Amazon dominate
markets is by offering the best products/services. I don’t think there’s an
effective way to regulate that away. But if they’re forced to offer their
services as common carriers, then the risks of them actually monopolizing
their position is greatly reduced.

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Nasrudith
Really I think if anyone should be forced into common carrier behavior it
should be the financial system because of their involvement in payment
transfers and power of abuse in cutting off avenues of donation and payment.

While Amazon's infastructure is neat and useful curation is still a valid task
which is incompatible with a common carrier status and would be appropriative
as it would raise serious questions if they could remove listers for anything
not illegal. Like say "autism cures" involving bleach enemas or a guide to
engaging in pedophilia. Not to mention functional integral aspects like search
ranking would be a matter of "fairness" instead of trying to serve the
customer or the company. I can see no way that a forced common carrier on
Amazon will be anything but a disaster.

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tracker1
Absolutely agreed on financial institutions and common carrier services.

