
Amazon Is a Monopoly - juokaz
https://www.marketplacepulse.com/articles/amazon-is-a-monopoly-an-interview-with-sally-hubbard
======
blairanderson
I run a consulting company for Amazon suppliers. We have roughly 2-dozen
Amazon suppliers and our first-hand experience is that Amazon is absolutely
stifling competition/business to the detriment of customer.

The biggest problem is `agreements that restrain trade` is a monopoly practice
that happens across the board. They're a black box AND have tiny support
systems for their marketplace.

One recent example. A client was on track to be selling $X-million this year
of some appliances. Our client was forced to to stop selling because of trump
tariffs. Amazon won't accept a "higher price" from our little company that
only sells $Xm/year. I guarantee they're talking everyday to the teams at
frigidaire/honeywell/GE/etc.

If their systems would transparent this wouldn't be a problem but their
algorithms have blackbox variables for the big brands.

~~~
scarface74
People have been complaining about basically the same thing with respect to
Walmart for decades.

~~~
dylan604
Exactly this. I've worked for a company where Walmart was the largest retailer
for their product (DVDs). They were constantly being beat up to lower their
wholesale prices while also demanding a separate SKU with edited content.
Amazon is no different in this case (except not demanding edited content).

Whenever I asked about this, they said you still had to provide product for
sale wherever the customers were. The large retailers all want you to believe
that you can make up for the lower price in vast quantities their store front
provides.

~~~
Findeton
Yeah, there's nothing inherently bad about monopolies. The problem only arises
when monopolies are forced into people by the government. Instead, people
choose Amazon on their own.

~~~
alexgmcm
But Telecoms and the old Robber Barons had monopolies without government
forcing people.

I mean there are areas where peoples only choice of ISP is Comcast and equally
the Government wasn't forcing people to buy Standard Oil.

Any monopoly is bad because it allows them to ignore consumers as there is no
competition.

~~~
ernst_klim
> But Telecoms and the old Robber Barons had monopolies without government
> forcing people.

Telecoms were totally built by govs. Back in the days govs were obsessed with
controlling the means of communication, so all the related biz was due to the
monopoly right.

> AT&T established a network of subsidiaries in the United States and Canada
> that held a government-authorized phone service monopoly, formalized with
> the Kingsbury Commitment, throughout most of the twentieth century.

> With $18.8 million spent in 2013, Comcast has the seventh largest lobbying
> budget of any individual company or organization in the United States.[62]
> Comcast employs multiple former U.S. Congressmen as lobbyists.

Sure, nothing to do with the government. Go ahead, try to bypass FCC and
establish a new telecom company. It's literally pushed by the gov, as in any
heavily regulated domain with patents and other monopoly rights.

As for robber barons, that's mostly an antitrust myth to scare people

> After 1900 it did not try to force competitors out of business by
> underpricing them.[37] The federal Commissioner of Corporations studied
> Standard's operations from the period of 1904 to 1906[38] and concluded that
> "beyond question ... the dominant position of the Standard Oil Co. in the
> refining industry was due to unfair practices—to abuse of the control of
> pipe-lines, to railroad discriminations, and to unfair methods of
> competition in the sale of the refined petroleum products".[39] Due to
> competition from other firms, their market share had gradually eroded to 70
> percent by 1906 which was the year when the antitrust case was filed against
> Standard, and down to 64 percent by 1911 when Standard was ordered broken
> up[40] and at least 147 refining companies were competing with Standard
> including Gulf, Texaco, and Shell.

~~~
skinnymuch
But everyone does lobbying. Singling our Comcast like that is weird to prove a
point of government and telecoms. Even if they are in the top 10.

~~~
ernst_klim
>But everyone does lobbying.

What? Your local Cafe does lobbying? Only magacorps do that, and yes, they use
it to protect themselves from competition.

And no, protecting yourself from competition using lobbying, monopoly rights,
patents, regulations means exactly this: big biz uses government to ensure its
monopoly/oligopoly, aka governments creating monopolies.

>Comcast like that is weird to prove a point of government and telecoms

Comcast is using government to ensure its marketshare is not an example of
government forcing people to use the service?

It exactly is IMHO.

~~~
skinnymuch
It’s disingenuous to do faux ignorance by acting like you don’t know what I
roughly meant when I said everyone. You know I wasn’t talking about your local
cafe. Or even a $10M/year company.

~~~
ernst_klim
> It’s disingenuous to do faux ignorance by acting like you don’t know what I
> roughly meant when I said everyone. You know I wasn’t talking about your
> local cafe. Or even a $10M/year company.

Then articulate your point more clearly.

Sure, many the American megacorps are using the government for their own sake.
That's exactly proving why US is such a crony state, where big corps are
protected from competition by a huge apparatus of bureaucracy.

What's your point? If they use the government it's not the government's fault?
Government is literally a mean of establishing oligopolies and shifting the
bargaining balance from people to corporations.

~~~
coliveira
You point is moot because there is no capitalist society where big companies
will not interfere with government. If government is too big, they will lobby
the government. If government is too small/inexistent, they will run
monopolies by direct financial control and other "standard" practices: buying
out competitors, collusion, threats of violence.

~~~
ernst_klim
> buying out competitors, collusion, threats of violence.

You can't buy a competitor if he don't want to be sold. Neither can you threat
somebody with violence if the government does its job. I don't even comprehend
how the absence of interventionism presume allowance of such violent measures.
Don't confuse violence with "non-competitive practices". The latter are seldom
harmful, or at the very least much less harmful than those leveraged by the
allowance of interventions.

~~~
skinnymuch
I gave the Diapers.com parent company example elsewhere. They were doomed with
Amazon’s relentless price cutting and marketing. Either they sell or they’ll
become worthless. You can say they have a choice, but did they really? I don’t
think they did.

~~~
ernst_klim
> They were doomed with Amazon’s relentless price cutting and marketing.
> Either they sell or they’ll become worthless. You can say they have a
> choice, but did they really?

So they've provided a worse service? I'm fine with it, if it means lower
prices.

Of course they had a choice. And not only "to sell or become worthless", but
also invent or innovate, as Amazon did, when it swallowed a huge chunk of
Walmart's pie.

I don't know if Amazon is good or bad, neither myself nor anybody around ever
used it, but if its service would not be good enough, any competitor could
easily use it to conquer the market (as Amazon itself did), until Amazon would
protect itself via regulatory capture.

------
turc1656
Solid interview. But one thing I saw that was missing was that Amazon also
doesn't charge itself the 15% marketplace fee (it varies slightly depending on
category but most are 15%) that it charges 3rd party sellers. Since Amazon
directly sells tens of millions of items, it had at least a 15% head start on
every single one of those products in terms of price competition. Since we're
talking retail here, the margins on most items don't exceed 15% in many cases.
The fact that they have been allowed to charge 3rd party sellers this fee
while not facing it themselves or being forced to stop selling products at all
if they are going to run the marketplace is mind-boggling to me.

At the previous company I worked for, they were very careful about this issue.
It was a fintech company that had 20+ different lines of business/revenue. Due
to the nature of the fintech space, certain business units wanted
information/data/services from the other divisions. For example, the index and
ETF team wanted corporate actions data from the team that monitored all
corporate actions globally and delivered it via a standardized feed. The ETF
and index teams were forced to take money from their budget and actually buy
the service from the other team to avoid legal issues. They knew that if other
ETF and index providers found out _they_ had to pay for the product but our
internal team got everything for free and could then undercut them and charge
less for the ETF and index products, I guaran-fucking-tee you they would have
sued us. Every division in the company was financially separated for _exactly_
this reason. There should be some sort of class-action lawsuit on this basis
from all sellers against Amazon, in my opinion. Amazon should be forced to
separate that business that actually sells its own products into a new legal
entity and have to pay the fees.

~~~
metalliqaz
Amazon doesn't have to pay the 15%, but they DO have to pay for the massive
web infrastructure of their retail storefront and for the massive order
fulfillment infrastructure.

~~~
tk75x
That's what the 15% fee is for. I can envision splitting up amazon into its
retail, web, and logistics branches where the retail branch pays the logistics
branch the 15% fee to use their network.

~~~
thirdsun
I don't think it's the government's job the dictate the structure of a
company, which, frankly, isn't anywhere near monopoly status in my opinion. I
can order most products from countless other stores, which allows me to easily
avoid Amazon if I wanted to.

------
Arrezz
How we actually define a company to be a monopoly seems to be somewhat
arbitrary? I agree that Amazon engages in anticompetitive behaviour but I'm
not sure that it can control prices or exclude competition to that extent? I
mean every company can affect that, at what point does it become problematic?

~~~
Alupis
> I'm not sure that it can control prices

Amazon very often competes directly with sellers on the Marketplace, and often
undercuts them on price.

There are products they sell below the purchase cost, sometimes below
manufacturing cost. You can't compete with that unless you have piles of money
to burn.

They sell at a loss until they shake everyone loose from a product, then
dominate all sales of that products on the Marketplace, raising prices to
profitability when they feel like it.

Don't forget they get all product sales information and statistics from every
seller on the Marketplace - basically all the market research necessary to
pick only "winner" products to sell. Then, when they feel like it, they
require sellers to produce original invoices proving purchase of the items.
These invoices conveniently contain all necessary information for Amazon to
start buying the items directly themselves so that they can sell the item at a
loss until you can't compete anymore, leaving Amazon as the sole source for
the product.

Wanna be part of Vendor Central - selling directly to Amazon? They dictate the
pricing and strong-arm you into selling exclusively to them in many cases.
There is no negotiation - there is no adjusting pricing based on quantity
ordered. And as much as people might want to think Amazon just buys enough
quantity to get what they want - they don't. They just tell you what it will
be.

> or exclude competition to that extent?

They can ban you from their Marketplace (the largest consumer Marketplace in
the world) at will, with little to zero recourse on your part, via an opaque
"Seller Performance" team that only responds to email, sometimes, and provides
vague responses to what policies you might have broken.

That is, if you somehow get the eye of the Seller Performance team upon you.
The reasons they go after certain sellers and leave others alone are as
mysterious as the team behind the decisions.

~~~
mikeash
So don’t sell on Amazon. There are tons of other options. Amazon is merely the
largest, not the only.

~~~
Alupis
Is that really still an option the bigger Amazon gets?

At what point is it a defacto monopoly? A huge share of people shop
exclusively on Amazon, particularly when compared to 10 years ago. There's no
sign it'll stop growing any time soon.

Choosing not to, or being prohibited from selling on Amazon effectively blocks
you out of a significant share of ecommerce sales. There's no way around that.

~~~
arkh
> A huge share of people shop exclusively on Amazon

People should ask why. Is it the prices? No. Is it the discoverability? No.
It's because when you have a problem with whatever you bought you get
reimbursed. No "call Samsung hotline", no "we'll add this totally not free
warranty package in your cart".

~~~
dwyerm
Agreed. The prices are meh. The discoverability is terrible and seemingly
getting worse. I even feel like the customer service is also screaming
downhill. Still, I'm nearly exclusive with Amazon because I give them money
and they send me product, and there's _no_ friction in that exchange.

Consider for comparison my recent experience purchasing a wedding gift from
Bed Bath and Beyond. They had done everything right to capture my purchase:
They hosted the wedding registry, kept the new couple's address hidden, and by
not allowing me to select "I'm buying this somewhere else" made it difficult
for me to get the item cheaper from another retailer.

Despite all of that, I still abandoned the cart and came back to Amazon. BB&B
requires Verified By Visa, and I require my credit card provider to not be
stupid about security, so my card was declined with no recourse.

Mind you, Amazon has declined my payment before, too. But they only did it
once, more-than paid for their mistake, and haven't troubled me since.

Amazon is a monopoly like Visa and Mastercard are monopolies. They enrich
themselves while facilitating commerce. While I'm uncomfortable with that
power they hold, I wouldn't want to be without it.

------
tim333
It's not a monopoly under the dictionary definition:

>the exclusive possession or control of the supply of or trade in a commodity
or service.

It is maybe under the Sherman Act:

>“Monopoly power” is generally understood to mean “the power to control prices
or exclude competition”.

I wish when people use words in a different way to the dictionary meaning
they'd say so. Otherwise it leads to a whole lot of pointless "Oh yes it is"
vs "oh no it isn't" in discussion.

~~~
wry_discontent
I find that there's a huge amount of discussion that basically amounts to
definitional disagreements. I'll cede definitions like "monopoly" for the sake
of a discussion and continue to use them otherwise.

The trouble is those are uninteresting questions. "Is Amazon a monopoly?"
immediately takes the more interesting discussion "what should we do about the
size of Amazon" off the table and leaves us to bicker about what words mean.
We likely won't reach an agreement about what officially constitutes a
monopoly, but we can reason about what we should do in the future.

~~~
zinclozenge
Most likely nothing will happen with respect to these large companies because
generally speaking prosecution only happens when the company's status as a
monopoly negatively affects the consumer (allegedly). The criteria is usually
price of goods/services. It's possible this might include things like privacy
violations or data mishandling in the future, but I doubt it.

There's a DoJ memo, or something similar, that spurred this recent-ish change
in policy but i can't seem to find it.

------
IloveHN84
Well, years ago, when Amazon wasn't a monopoly, who had the choice to make it
one?

The final user.

Personally, I've never used Amazon before seeing a friend ordering a fairly
huge amount of stuff from there. Prior to that, I was a not-so-obsessed-from-
ecommerce eBay user, where I placed an order maybe every 4-5 months. I've
started using Amazon because of its returning policy, which is better that
eBay's, but by doing so, i've also increased the amount of stuff bought on the
platform, because of time. Getting older and having more responsibilities,
you've to save some time, then Amazon comes to rescue when it comes to generic
stuff.

I guess now it's really late to blame Amazon for the monopoly, as well as
Microsoft did in 90s with PCs and Google is doing nowadays with
Android+Chrome.

Sure, there are alternatives, but the final decision on who gets the monopoly
is the user

~~~
mrtksn
Aren't they playing really nice and even operating at loss until they become a
monopoly? It's not really a choice if a company is giving you free stuff.

Probably it's the same idea with Uber: We can have really nice rides at good
prices because rich people are co-paying our rides. When it's only Uber out
there, they can start testing our patience while maximising the profits.

Amazon and Uber are not really selling some high margin tech products, their
core innovations are not in the product but the business operations and
strategies.

~~~
dodobirdlord
> Aren't they playing really nice and even operating at loss until they become
> a monopoly?

No, they aren't. They publish their financial statement every quarter.
Generally their revenue is very close to their expenses. Given that, it's
impossible that "operating at loss" is an accurate characterization of their
business strategy. Jeff Bezos has a saying; "Your margin is my opportunity."
It lays out pretty clearly what Amazon's actual business strategy is, and it
lines up well with their financial statements. Target a very small profit
margin, move into every possible market by accepting a lower profit margin
than incumbents, make money by leveraging scale and network effects to drive
down costs in ways that other businesses can't replicate.

~~~
mrtksn
What I meant was pre-monopoly. The times when a company is constantly loosing
money, like Uber.

Anyway, what happens when there are no competitors because the margins are too
slim to be profitable without being at Amazon scale? If they are not a charity
these margins will get fattier as much as their hearts desires. Their
potential competitors won't be able to say "your fat margins are my
opportunity" because Amazon will be able to do all kinds of anti-competative
things.

Thanks god we have laws that keeps monopolies in check but sometimes these
laws can move quite slowly and the damage may not be possbible to repair. Like
with the case with Mocrosoft and Google.

~~~
dodobirdlord
> Anyway, what happens when there are no competitors because the margins are
> too slim to be profitable without being at Amazon scale? If they are not a
> charity these margins will get fattier as much as their hearts desires.

If Amazon significantly raises their prices, then suddenly their prices aren't
particularly hard to compete against.

> Amazon will be able to do all kinds of anti-competative things

I think we can cross this bridge when Amazon starts doing anti-competitive
things.

------
indopedia
She forgets that the Amazon marketplace is made up of sellers and the prices
aren't controlled by Amazon for a lot of their products. These are inherited
from the distributor in most cases. Sure Amazon fulfills the orders but it's
not like Walmart that controls the entire process. There is more freedom in
Amazon.

Anyways, this is just the hip thing of today. How about making a service
better than Amazon? No that's impossible?? Well you can bet there are a
million people trying right now so there are and will be plenty more
alternatives.

~~~
youeseh
> Anyways, this is just the hip thing of today

Observing that Amazon may be monopolizing isn't a new observation.

When they began competing against their vendors is when they crossed the line,
in my opinion. The same goes for any marketplace. It is one thing to provide
your vendors the tools and information they need to operate better, but then
to act on that information yourself - the operator of the marketplace - that
is pretty shady.

~~~
kevinsundar
Yes but EVERY retailer does this. Every single store brand product you see
(Costco, Target, Walmart, CVS, Walgreens, etc.) is a result of this. Cheaper
products that meet the same demand as brand name vendor goods.

In fact customers are already trained for this. I walk into a store and I
immediately price compare against the store brand. So if people doing the same
on Amazon, why shouldn't Amazon be allowed to fulfill that? This was a thing
in retailers a long time before Amazon started doing it.

If you look around in retail stores today its easy to see how everyone strong
arms vendors just the same. For example, ever notice that all of Target's pen
section all have a certain color and text printed on the bottom of their
packaging indicating the type of pen (Gel, ballpoint, etc)? Target has forced
every single vendor (massive companies like Bic, Sharpie, etc.) that sells
writing implements in Target to change their packaging, create new SKUs, do
different production runs, and handle the logistics of different versions of
the same pen. All to be undercut in price by the Target brand pen.

~~~
__jal
> why shouldn't Amazon be allowed

Antitrust law used to address this. Monopolies are not allowed to do things
that non-monopolies are allowed to do, because the effects of monopolies doing
them are different than the effects of non-monopolies doing it.

Of course, Bork rewrote monopoly policy in a way that opens the door to
exactly the sort of monopolies we now have. But it isn't as if this is some
new notion invented because people hate Amazon; it used to be the rule.

~~~
kevinsundar
Monopolies weren't allowed to do things that non-monopolies are allowed to do
because they would have an outsized ability to harm consumers as a monopoly.
But Amazon has repeatedly shown that it isn't harming consumers. In fact, it's
pushed other retailers to better the customer experience or go out of
business. Should a company be split up just because it's doing its customers
good and got too big because... they're doing their customers good and people
like that and want to give them their money?

~~~
__jal
That is a reasonable restatement of parts of the Bork doctrine, yes.

Suffice to say this is a recent legal innovation, and many, many people
believe ignoring other monopoly effects is myopic.

~~~
kevinsundar
Agreed. It basically comes down to if you agree with his viewpoints on M&A and
monopolies. Looks like thats where we differ :)

------
higherkinded
No it's not, and you still have a burden of a proof on your shoulders. It
probably is, indeed, kept up by some degree of anti-competitive practices but
it's still not a monopoly but a member of what you call oligopoly, providing a
lot of cheap stuff in every of its areas of competition.

I'd like to point out as well that sanctions (not necessarily well-deserved)
against Amazon will just destroy some workplaces, mostly lower-qualified ones,
which will cause quite a bit of a problem.

~~~
daveFNbuck
The interviewee didn't define monopoly by anti-competitive behavior.

> Is Amazon a monopoly?

> Yes, monopoly power is defined as the power to control prices or exclude
> competition. Amazon has the power to do both. But being a monopoly on its
> own is not illegal under the antitrust laws. Illegal monopolization requires
> both 1) monopoly power and 2) that the firm acquired, enhanced, or
> maintained that power by using exclusionary conduct.

~~~
AnthonyMouse
> Amazon has the power to do both.

No they don't.

If Amazon significantly raises prices it charges customers, or lowers prices
it pays suppliers, to above/below what Walmart or a hundred others do, are the
customers and suppliers going to stay with them? No. When they don't put you
in their store, can they also prevent you from reaching the same customers
through any other store? No.

The fact that they can choose not to buy from you, or won't pay more than a
given price, doesn't make them a monopoly. Anybody can do that. The mom and
pop coffee shop on the same corner with six other mom and pop coffee shops, a
Dunken Donuts and two Starbucks can do that. But the fact that they won't do
business with you doesn't mean you can't sell your goods for a similar price
to the same end customers through a hundred competitors, which is why they're
not a monopoly.

~~~
headsoup
You appear to be only referring to the retail side of Amazon, not the platform
side where the article mentions Amazon has numerous restrictive practices in
place and set the price through these by excluding competition and competing
through their own retail lines, regardless of other (uncompetitive) options

~~~
cryptica
Amazon could drive companies within entire product sectors to bankruptcy
simply by lowering the price of that product category on Amazon. The problem
is that they can afford to do this in a sustainable way because they have so
many other product lines.

When other big chains like Walmart do similar things, it does not have the
same effect because people don't go to Walmart to buy just one item. Amazon is
different; if they lower the price of an item, consumers react quickly and
that can put other websites which specialize in that item out of business.
Then when all major competitors within the item category are out of business,
Amazon can increase the price to any amount it wants and use the extra
proceeds to continue the process with different item categories.

~~~
AnthonyMouse
> Amazon could drive companies within entire product sectors to bankruptcy
> simply by lowering the price of that product category on Amazon. The problem
> is that they can afford to do this in a sustainable way because they have so
> many other product lines.

Selling below cost can be illegal dumping. But do you have any evidence that
they're actually doing that, rather than them merely negotiating a better
price for it than you and then selling it with thin (rather than negative)
margins?

> Then when all major competitors within the item category are out of
> business, Amazon can increase the price to any amount it wants

Notice that this only works if nobody is willing to reenter the market when
the price increases, which is rarely the case. Otherwise they have to maintain
the lower prices forever.

------
stcredzero
_being a monopoly on its own is not illegal under the antitrust laws. Illegal
monopolization requires both 1) monopoly power and 2) that the firm acquired,
enhanced, or maintained that power by using exclusionary conduct._

 _Exclusionary conduct includes things like predatory pricing, exclusive
agreements, refusing to deal with a company, most-favored nation clauses,
designing your product or service in a way that excludes competition, and more
types of anticompetitive behavior._

How is the above different from "having a moat?" Isn't any company that starts
and maintains a curated "ecosystem" engaging in some of these behaviors? Isn't
Apple guilty of refusing to deal with certain companies and designing their
product or service in a way that excludes competition? For that matter, aren't
most of the tech giants?

~~~
DenisM
A company that has a monopoly has to follow more rules than other companies
because it can do more damage. Certain kind of moat-building is severely
restricted for them, such as exclusive contracts or deliberate technology
lock-in, while other methods are still legal, such as brand recognition or a
rich partner ecosystem or simply a superior product.

>Apple guilty of refusing to deal with certain companies

Apple does not have anywhere near a monopoly in any of the markets they are in
[+], hence the anti-trust rules do not apply to them. By contrast these rules
do apply to Microsoft and Google, for example.

[+] in the eyes of the law monopoly means control of a market, and market is
comprised of interchangeable goods. In this case iPhones and Androids are
interchangeable - a consumer is free to buy a Samsung or an Apple phone and
neither company is running the risk of excluding the other. Hence the consumer
is in no danger of being deprived of choice, and there is no monopoly.

~~~
stcredzero
_Apple does not have anywhere near a monopoly in any of the markets they are
in [+], hence the anti-trust rules do not apply to them._

Having a "moat:" All of the benefits of being a Monopoly, with none of the
penalties!

------
mikeash
I wish this elaborated more on how Amazon is a monopoly. The interviewee
defines it as having the power to set prices and exclude competition. I don’t
see either of those happening. There’s a ton of competition, more than enough
to severely limit their ability to set prices.

~~~
scoofy
You're looking at it as the customer being the people buying things off of
amazon. They are in a sense, but not the sense that is important here.

The the sellers on amazon are customers of their marketplace. Much like
Colgate and Crest might fight over ideal shelf space in a supermarket (and be
changed accordingly by the market), the sellers on amazon must pay the price
to be on amazon. Amazon has the power to set prices of appearing in their
marketplace, where, and for what keywords. Amazon is also now selling their
own merchandise on those same (digital) shelves. There are few alternatives to
amazon for online retailers. So, to reach customers, many retailers must use
amazon, despite the rent-collection they do. The next marketplace for online
retail is walmart.com, which, and lets be honest, when was the last time any
of us went to walmart.com...

~~~
mikeash
There are plenty of alternatives to Amazon for sellers too. None of them are
as big, but they are there.

If Amazon has the power to set prices, why are their prices the same as
everyone else’s?

~~~
scoofy
We don't see the price to use amazon to sell things. We only see the retail
price. A marketplace can be using monopolistic-pricing to capture returns from
the retailer.

------
nickik
No it is not. Unless you can't buy basically the same stuff from lots of other
places this is simple the usual whining about 'big cooperations'.

The reality is that amazon overs good prices and people like to shop there.

And yes, suppliers are gone complain, that amazon is evil, just like suppliers
complain that walmarket is evil, just as suppliers always claim whatever
larger reseller they sell to is a evil monopoly.

The definition of a monopoly in economics is if that seller can essentially
employ monopoly pricing, but amazon prices are not incredible higher compared
to the competition.

~~~
dominicr
What you're referring to is a 'pure' monopoly, which are relatively rare (but
still common enough).

The wider use of definition in economics is a company that dominates a market
to the extent that is has control over the market. For example, when suppliers
have little actual choice in dealing with the company.

Higher prices are not necessarily a product of a monopoly and are not needed
to define one.

~~~
nickik
Its actually now standard in anti-trust law now that you actually have to show
significant consumer harm. Richard Posner writting has this made the standard
in Anti-Trust.

In the past it was just politics and any big company could get hit with anti-
trust. Presidents routinly used anti-trust to go after their political
enemies.

And if you don't use this 'pure' definition you are essentially just saying
'this is a big company'. Every single large company would be a 'monopoly' by
those definition.

~~~
dominicr
The comment I was replying to was referring to the word's definition in
economics, not the current legal standards of specific countries.

------
acover
As governments seem slow to action, would coordinating consumers shopping help
combat the monopoly power of some industry? For example, having an app that
notifies you to try and buy from a competitor like walmart for a few days to
pressure amazon into bargaining?

~~~
kevinsundar
And why would consumers coordinate against a company that is benefiting them
with lower prices, great customer service, and insanely fast shipping now (I
live in a small town of 40,000 - 3 hours from any major metropolis and get 1
day shipping)? Honestly I'm pretty impressed how such a massive company still
seems to do a majority of their customers good, without even making them pay
more. I'd say most of the people I know who use amazon are pretty happy with
the service they are getting. To the average consumer whose looking out for
their own personal bottom line, whats the benefit of coordinating against
them?

~~~
acover
There wouldn't be! However, if your assumptions that consumers are all happy
with amazon are incorrect and there are things they would like changed at
amazon then there would be an advantage to collective bargaining to combat
amazon's monopoly power.

Also, such collective bargaining could be used to bargain with companies other
than amazon.

~~~
kevinsundar
Fair point. I'm not saying that all consumers are happy. But for collective
bargaining to work you pretty much have to be the majority or its hard to do
much.

------
OnlineCourage
I have actually started adopting other online vendors because Amazon's quality
control and customer support is so atrocious. I think Amazon will end up
digging its own grave by building this huge adoption for online buyong,
training competition how to do online retail right, and then die from a
million cuts as thousands of specialty vendors step in. Their search sucks
too...you just get fed paid advertisements for crap. AWS is amazing but I no
longer trust Amazon as a place to buy physical items.

~~~
patrickfatrick
Amazon’s customer support “atrocious”? Literally only heard of great
experiences with their customer support from people I’ve talked to.

------
amelius
Richard Stallman has some thoughts on this topic:

[https://stallman.org/amazon.html](https://stallman.org/amazon.html)

~~~
cyborgx7
Stallman's biggest problem, in my opinion, is that all his proposed solutions
are individual consumption choices. A beast like Amazon can only be tamed by
collective action and regulation.

~~~
amelius
From his post:

> We should not allow a company to have a share over around 10% of any market.
> If in a certain field a single dominant company is beneficial for society,
> that means it is a natural monopoly, and should be served by a regulated
> utility.

~~~
cyborgx7
Fair enough. I had just read the introduction, and the section headlines. I'm
glad to see him agree on the importance of regulated utilities. Free Software
sometimes gets associated with the American Capitalist Libertarian movement.
So I wasn't clear on Stallman's personal views on the matter.

~~~
boomlinde
_> Free Software sometimes gets associated with the American Capitalist
Libertarian movement. So I wasn't clear on Stallman's personal views on the
matter._

The problem isn't that you weren't clear on his personal views on the matter,
but that you comment on "all his proposed solutions" when even a cursory
reading of his political articles would reveal that he is very much not a
libertarian.

------
AlchemistCamp
According to Ben Thompson, "There really is no plausible argument that Amazon
has a monopoly."

[https://stratechery.com/2019/tech-and-
antitrust/](https://stratechery.com/2019/tech-and-antitrust/)

------
mlguy456
This is an attempt to divert attention from real monopolies like Comcast and
healthcare monsters. What we really need in the tech space is UK-style laws to
enforce competition between ISPs, GDPR-style laws to protect personal data and
CA-style prohibition on NDAs. But politicans won't get paid for any of this.
Instead they go for easy and profitable targets, such as pretending to care
that Amazon is a monopoly.

~~~
dredmorbius
Stronger anti-trust protections and enforcement will be a benefit all 'round.

------
breadandcrumbel
I'm following Amazon for a long time They are a monopoly indeed

But they became one only because they are great at doing business

They built an empire from an online book store....

~~~
davemp
Exactly.

I recently bought a razer blade stealth through amazon, but the speakers were
messed up and there was coil whine. I installed the recommended firmware
upgrade but that caused Linux to crash with non-standard ACPI behavior. I
decided to go through razer support because I know it's better for them.

After over a week and maybe ten hours of emailing back and forth with support,
I was asked to reinstall windows and see if that worked... Instead, I just
clicked a few buttons on amazon and dropped the laptop off at the local UPS
store and was done in ~20min.

There's a reason Amazon is in its current position. If I had bought from the
razer store directly, I would've had an even worse time.

------
EngineerWannabe
Unless Walmart Canada,No Frills,Sobeys or any other retailer compete with
Amazon,we will still read these news.Amazon prime is great if you don't find
enough time to go shopping for minor things.Amazon is great for non-perishable
item shopping if you compare its prices with other retailers.

Why would I pay $4.99,at Sobeys, for a jar of nescafe if I can get it from
Amazon for $3.97?

------
rb808
I think I can generalize that the problem with Amazon is similar to many of
the modern tech companies in that they're super well funded and aren't
expected to make a profit which allows them to undercut incumbents.

Amazon can price lower than Target/Wallmart/B&N/Local Stores, lose money every
year while the competition slowly dies.

Uber can price lower than local taxis, lose money every year while the
competition slowly dies.

Tesla can price lower than Ford/Toyota/Merc, lose money every year while the
competition slowly dies.

AirBnB can price lower than Hilton/Marriot/Locals, lose money every year while
the competition slowly dies.

WeWork can price lower than office buildings, lose money every year while the
competition slowly dies.

The problem is low interest rates and another tech bubble.

~~~
lisper
I'm not a huge Uber fan, but in their case at least I don't think you're being
entirely fair. My home airport is SFO. The official taxis there have an
extremely annoying pricing policy: if your destination is more than 20 miles
form the airport they add a $50 surcharge to the cost of your trip. (I live 25
miles away.) And you can't summon a cab with an app. If you're at the airport
they are very convenient. If you are anywhere else taxies are hopeless. In the
face of such abject stupidity on the part of the taxis, I use Uber (well,
Lyft) despite my sympathies for professional drivers. If the taxi companies
weren't behaving like such utter and complete morons for _years_ it would be
easier to sympathize with them.

~~~
tj-teej
Serious question: once the taxi industry has died what makes you believe that
Uber won't implement similar policies?

~~~
abakker
Nothing. As the saying goes, “get while the getting is good”.

If I don’t take the cheap fare today, it doesn’t buy me anything in the long
run anyway. Present dollars saved are a certainty, and if history repeats,
there is a reasonable likelihood of future disruption being my easy-our for an
anticompetitive Uber.

~~~
pessimizer
I don't know if it's a good strategy to wait as long as it took Uber to
supplant taxis for something to supplant Uber. If it follows that pattern, you
won't live to see it, so "easy-out" is probably not the greatest descriptor.

That being said, your individual boycott will have a minuscule effect, and
money in your pocket is good. I just can't imagine that capitalism is meant to
work like this; paying people to use your product until all the competition is
gone, then once you're a monopoly jacking prices up to infinity, ditching
quality, and regulating or buying out any potential upstarts.

~~~
abakker
A cynical person might say that it is meant to work _exactly_ like this.
Killing off older companies seems likely to be a service to progress and the
economy. (not to the employees, which is a reason why I'm not a genuine
advocate of pure capitalism). nevertheless, There are organizational,
bureaucratic, and process debts in addition to technical debt, and I think
capitalism acknowledges that in the end, those debts never get paid. Borrow
against the future and burn out bright and fast. The good news, is except for
capital itself, borrowing technology/process/and bureaucracy against the
future is borrowing from yourself, not creditors.

~~~
AmericanChopper
Every dollar of funding that Uber receives comes from an investor that
believes there is a long term business model in Uber. Even the short horizon
investors have to believe that, otherwise they would have nobody to sell their
shares to in the short term.

In terms of killing competition, price wars almost always benefit consumers.
Prices go down during a price war, and if the industry is susceptible to them,
then another one will occur after the war is over. Look at the airline
industry, it’s full of price war cycles. A carrier will try compete on a
route, drive prices down, and sometimes this will result in carriers leaving
the competition, and prices going back up again afterwards. When that happens,
some time will pass, and it will happen again.

The worst outcome for consumers is that the market returns to a non-
competitive state when the dust settles. In that case, consumers are just back
where they started, after having temporarily enjoyed the benefits of the price
war. If the market ends up in an unreasonably non-competitive state after the
price war, then the victor has just set themselves up for anti-trust action.

Every mainstream capitalist economist I’ve ever heard of has firmly believed
that regulating competition is an essential part of a capitalist economy. So
if you think that’s not happening, it would seem to be a failure of government
more that a failure of capitalist economics.

------
mikojan
Expropriate them.

------
coding123
And what about Alphabet?

~~~
liability
All of these companies (Amazon, Alphabet/Google, Facebook, etc) are very
fortunate that the others exist because _every single goddamn time_ anybody
criticizes one, somebody will try to derail the discussion with _" well what
about [one of the others]?"_

They all suck. Stop trying to use one to justify another.

~~~
jklinger410
>somebody will try to derail the discussion

Pointing out competitors to a supposed monopoly is not derailing the
conversation. It _is_ the conversation.

~~~
whatshisface
Amazon is probably not a monopoly in the advertising market, but Alphabet
doesn't run an online store.

~~~
jklinger410
[https://shopping.google.com](https://shopping.google.com)

~~~
bhandziuk
I'm also having a garage sale this weekend but that's not really competition
to Amazon

------
raven105x
For clarification: Monopolies can result from anti-competitive practices, or
an overwhelming competitive advantage. Talking about the latter here

The 'anti-trust' and 'monopoly' arguments strike me as hypocritical and self-
contradictory in the context of capitalism. We encourage businesses to compete
and succeed, yet when they do so disproportionally, everyone suddenly feels
entitled to intervene in their structure, policies & processes - and best of
all, we have no objective guidelines or criteria for when this should happen.

The question then becomes: who gets to decide when to bring forth these
concerns, and what's their agenda? Food for thought.

~~~
theturtletalks
I remember reading about an anti-trust case against Microsoft in the 90s since
they included Microsoft Explorer with the OS. They were forced to separate the
two, but Chromebook does the same thing without consequences. The rules for
Antitrust keep changing and companies are integrating vertically and
horizontally quickly before the law catches up.

~~~
jdietrich
_> Chromebook does the same thing without consequences_

It's not the same at all. Microsoft were forced to unbundle IE from Windows
because they were using their market dominance in one area (operating systems)
to give themselves an artificial advantage in another area (web browsers).
This bundling shielded IE from competition and squeezed other players out of
the web browser market. Apple are within their rights to bundle Safari with
MacOS, because MacOS only has a minority market share; same goes for ChromeOS.
You can't be sanctioned for exploiting a dominant market position if you don't
_have_ a dominant market position.

[https://www.computerworld.com.au/article/273591/eu_microsoft...](https://www.computerworld.com.au/article/273591/eu_microsoft_shields_ie_from_competition/)

~~~
theturtletalks
Ok so dominating the market is an important factor for anti-trust litigation.
Google is dominating the search market and used this to push Chrome (searching
from the url address bar was one of the main reasons people switched). Is that
not the same as what Microsoft did? Now they dominate both markets and
leveraged both to grow the other.

~~~
jdietrich
Google were sanctioned in 2017 for exploiting their dominance in the search
market to promote their other services.

[https://www.theverge.com/2017/6/27/15872354/google-eu-
fine-a...](https://www.theverge.com/2017/6/27/15872354/google-eu-fine-
antitrust-shopping)

~~~
theturtletalks
This is the EU. What has the US done to limit or sanction Google? Why was
Microsoft pursued and Google not? Both were using one market dominance to push
another.

~~~
sjy
Google wasn't a dominant search engine at the time of the Microsoft
litigation, and different people were in charge of the Justice Department by
the time that it became one. Not every potential crime is or can be prosecuted
– especially when there is a lot of room for legal debate as to whether the
conduct was criminal, and the defendant is well-resourced.

------
rrggrr
If eBay, UPS, Walmart, Rackspace, Oracle and Dropbox (post Hellosign
acquisition) merged -- you would have a near approximation of the market
impact of Amazon. If it's not a monopoly then it's something worse.

~~~
DickingAround
How do you figure? Amazon makes less than half the revenue of Walmart.
Personally it seems kind of silly to talk about any of them as a 'monopoly'
when I literally use a competitor to each of the biggies (Amazon, Apple,
Google, etc.) every week. Why does anyone consider these companies a
'monopoly' when I'm easily and conveniently getting the same product from
someone else?

~~~
crazygringo
They're each (arguably) a monopoly in their own principal market(s) which
(mostly) aren't the same.

You're not buying toilet paper from Apple.

You're not searching the internet with Amazon.

For the discussion to make sense, you have to specify which market you're
looking at -- a company can have a monopoly in one market (e.g. search) but
not in another (e.g. mobile phones).

~~~
perl4ever
I'm not buying toilet paper from Amazon or searching the internet with Apple!

------
paulcarroty
> Amazon gives its own private label products and first-party products an
> advantage over competitors in a number of ways, from algorithmic ranking, to
> the buy box, to premium advertising, to direct to consumer marketing, to
> exclusive customer reviews.

Alphabet does absolutely the same but have more power in advertising & page
ranking plus collects petabytes users data using Chrome browser and Android
platform.

Walmart, Google Clouds, Azure are alive and still grows up, so this article
use over-dramatic effects like TV show.

~~~
smt88
Let me restate the article's argument:

Amazon has enough monopoly power in certain categories to abuse that power to
harm competition, and Amazon chooses to do so.

Would you still disagree?

~~~
stcredzero
_______ has enough monopoly power in certain categories to abuse that power to
harm competition, and ______ chooses to do so._

This generalizes nicely!

What if a company has enough power in certain categories to abuse that power
to harm competition, not directly for itself, but for its clients and
advertisers? I'm thinking about YouTube here. YouTube has enough power in
certain categories to abuse that power to harm media enterprises on the
YouTube platform. Some people argue that YouTube does so to the benefit of
other media enterprises who happen to pay YouTube for advertisement.

------
Areading314
Couldn't read this because of the huge, glaring falsehood on the first page.
Monopoly does NOT mean "power to affect prices". It is defined as having
_exclusive_ control of the supply of a good within a market. Redefining
monopoly to fit your argument is just lazy clickbaiting.

