
Amazon’s Antitrust Antagonist Has a Breakthrough Idea - wglb
https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html
======
mrep
That was a lot of words for very little content. I still don't really know
what this breakthrough idea is but I do know way more than I need to know
about Lina Khan. The only 2 paragraphs that allude to it are:

In Ms. Khan’s view, a company like Amazon — one that sells things, competes
against others selling things, and owns the platform where the deals are done
— has an inherent advantage that undermines fair competition.

From Amazon’s point of view, however, it is a problem indeed that Ms. Khan
concludes in the Yale paper that regulating parts of the company like a
utility “could make sense.” She also said it “could make sense” to treat
Amazon’s e-commerce operation like a bridge, highway, port, power grid or
telephone network — all of which are required to allow access to their
infrastructure on a nondiscriminatory basis.

~~~
rogerbinns
> I still don't really know what this breakthrough idea is ..

As far as I can tell it is the European monopoly model. (My info all comes
from Stratechery's coverage - errors are all mine.)

Monopoly regulators look at consumer harm, with US regulators focusing on
price. Increasing prices are seen as monopoly power, and that is what they
coordinate around. That for example (as the article notes) is why Facebook,
Google etc are not seen as monopolies because they charge consumers zero.

Conversely the EU approach is looking at supply - eg can there be new
entrants? The Google shopping stuff was an issue because it is way harder to
be a new entrant if Google (where many find the sites) demotes or hides the
new comer. Facebook is an issue because it is impractical to start a new
social network. A new network has to get users to re-do their social graph -
they can't just get a copy from Facebook. GDPR making more sense now?

With the "supply" view on, you can see how network effects keep making Amazon
more and more efficient (economies of scale) while also making it increasingly
difficult for there to be competitors. Their size also lets them impose their
own policies (eg see ebooks over the years).

~~~
stale2002
> you can see how network effects keep making Amazon more and more efficient

If we were in court, the argument that you just gave would be used by the
amazon lawyers, in defense of why they shouldn't be regulated.

Networks effects are a good thing. Making companies more and more efficient is
a good thing. Cheaper goods and services are a good thing.

I have yet to see anyone bring up any arguments as for why any of these things
hurt consumers.

In order for me to support regulation, I want to see actual consumers being
harmed, and for the things you mentioned, such as efficiency, to be protected
and encouraged, instead of discouraged.

~~~
int_19h
Why do the consumers deserve government subsidy to protect them against
negative effects of monopolies, but not employees or small business owners?

~~~
stale2002
Well for one, the government isnt subsidizing anything. They are instead
allowing customers to do what they want with their money.

And 2, I don't care what happens to business owners. They are wealthy enough
to handle themselves. (Yes, if you are even a small business owner, that still
counts as "wealthy" in my book. Most people don't own much of anything)

And 3, we are talking about a product monopoly, and not an employment
monopoly. Nobody has shown any evidence that Amazon has any sort of monopoly
on hiring people. People are instead arguing that they have a monopoly on the
markets that they sell in.

Consumers deserve the protections because they are much less well off than
either large or small companies.

~~~
int_19h
You don't need the government for that - you just let people do whatever they
want. Any sort of anti-monopoly legislation is a subsidy in a sense, because
it gives those protected some degree of economic power that they wouldn't
otherwise have, enabling them to make better deals etc. And there's nothing
wrong with that in principle, if you believe in common good - but then the
question of scope arises.

And we're talking about all kinds of monopolies. The effect that Amazon has is
not so much on its own employees (although there are some obvious issues there
as well), but on employees of all the competitors that it puts out of
business. All those people also benefit from the lower prices that Amazon
offers - but that is more than offset by the loss of income. It's kinda like
Walmart - it's more affordable, but at the cost of making a lot of people
poorer such that they _need_ that high affordability. For the owners, it's a
win-win, of course, because it creates a lock-in. But I don't see why we
should accept that as a society.

------
nabla9
Here is shorter article describing the issue for a general audience written by
Lina Khan herself [https://qz.com/282971/what-everyones-getting-wrong-about-
ama...](https://qz.com/282971/what-everyones-getting-wrong-about-amazon/)

~~~
dangjc
This was a great article. I like how she highlights how predatory pricing and
cross business subsidization used to be considered wrong and it was a shift in
the courts that changed that.

------
Eridrus
I wonder if there is any good writing on how any potential regulation would
play out.

Amazon is already a platform, so what about it would actually be changed if it
was "treated like infrastructure"? Ok, players like Google who have been
blackballed could list there, so that's a small win. Would it also mean
restricting Amazon business units from seeing data on their platform? I'm not
sure that's actually a win for society. Is it forcing Amazon to share this
data with competitors? That would be interesting, but starts running into
privacy challenges. Is it enforcing some idea of neutrality in ranking items?
That seems a very hard thing to regulate well without destroying the utility
of search.

As part of the EU Anti-trust ruling against Google Shopping, Google has made
Shopping into a fully separate (accounting wise) business unit and opened up
shopping ad slates for bidding to competing sites, but the sites who
instigated that action aren't happy because they are not actually able to
monetise those slots as effectively as Google can.

These companies are powerful, and maybe regulating based on price is short
sited as the article claims, but a long term view should not seek to destroy
power for no other reason than it exists.

~~~
jaggederest
Imagine AWS being a seperate business from Amazon. Zero personnel in common,
no shared office spaces, selling services to each other on a commercial basis
with SLAs and pricing negotiations the same way they do to external customers.

Similarly, imagine APS - amazon parcel service, an abstraction layer on
package delivery through Fedex UPS USPS courier etc, spun out as a separate
endeavor and selling services to all comers the same way they do to internal
amazon.

And Amazon Logistics, warehousing and fulfillment, sold the same way. Amazon-
product-sales is just another client who pays the same price as anyone else.

Ditto Amazon product sales vs amazon the website. The website continues much
as they are now, organized around selling things to people and doing the
recommendations / marketing / discovery bit and taking a cut from everyone.
The product sales business becomes a separate stockkeeping and inventory
buying company. As you say, Amazon-the-product-sales-business could operate
just as easily through catalogs or phone orders or late night infomercials.

I'm sure there's at least another half dozen parts of amazon that would be
industry leaders in some sub-industry instead of part of the degenerate
conglomerate as they are now. It's interesting to think about the places you
could draw those lines.

~~~
Eridrus
The question isn't "what splits could you make", but "what concrete benefits
and downsides are there from making the splits".

Splitting AWS off basically has no impact since they are already run as pretty
separate entities and AWS already sells to external customers.

Your example of Amazon Logistics also already exists, it is called Fulfillment
By Amazon.

Amazon the website also lists plenty of things from other merchants, so again,
is already provides services to other players.

Maybe there is some subsidization going on here that forcing Amazon to ensure
everyone is treated equally and doing proper accounting would expose, but
everything we know about Amazon is that they already do this internally, which
isn't surprising since every business unit in every large company needs to
show how they benefit the company and "charging" internal customers the
external price is an easy way to show value.

As far as I can tell, the only piece of this that isn't available to external
parties is the data on consumer habits.... but people have been complaining
about fast followers long before Amazon, and you can usually make a good
estimate about the market just by looking at the volume of reviews.

I mean, there are cases, e.g. Diapers.com where Amazon has clearly abused its
market power, but that seems like a thing we could handle directly with laws
declaring that large companies cannot sell products below cost, with proper
accounting for all of the fulfilment/etc services they use.

~~~
pseudalopex
What's the external price for a full-width ad at the top of Amazon.com? Can
Google pay them to drop Fire TV like they did Chromecast? Can Anker pay them
to block third-party sales like they do for AmazonBasics?

------
1123581321
Sincere question: when I read this article, it had this sentence: “Unwilling
or perhaps unable to accept that a woman wrote a breakthrough legal text, they
keep talking about bearded dudes.”

Is “dudes” acceptable in NYT’s style guide now? The term seemed incongruous
either way.

To reiterate, I am only asking about the term “dudes” and only quoted the
whole sentence for context.

~~~
crazygringo
I also thought it was an incongruous/bizarre sentence (what men are they even
referring to?), because the context isn't explained until much further down.

But then it does make sense -- it refers explicitly to this cover [1] and the
content within ("Battle of the Beards"), where "bearded dude" really does feel
like an appropriate description. So I'd call it bad article organization but
not a style problem.

[1] [https://www.competitionpolicyinternational.com/wp-
content/up...](https://www.competitionpolicyinternational.com/wp-
content/uploads/2018/05/AC_APRIL.pdf)

~~~
1123581321
I saw that. I understand use of the word bearded, given the cover, if not the
authors (a woman, a bearded man and a clean-shaven man.) I am specifically
wondering about the NYT allowing the word “dudes” since it seems to be used as
slang for men and not as a term necessary to describe the criticism.

~~~
hn_throwaway_99
I, like some other commenters, objected to that sentence, but now after
understanding the context about the linked article further down I think I get
it now, and I agree I hope it's just how some reorganization during editing
that made its meaning confusing.

I think "bearded dudes" is used specifically because the article was named
"Hipster Antitrust", i.e. "dudes" being used to highlight the way the word
"hipster" was used to ridicule Lina Khan's ideas in the first place.

~~~
1123581321
I think I’m questioning the idea that portraying a bearded hipster is
portraying a “dude” specifically, rather than a “man” (more formal than the
reported article) or even just a “hipster” (would be a repetitive use.) Was it
that they could not come up with another synonym and the NYT made an
exception, or does the NYT generally allow a term like that now?

I’m also curious about whether the NYT has changed its policy of adopting a
source’s language style to report on it (just for reporting, as an op-ed has
different standards and already allows this.) That seems like a new
development, but I’m not a daily reader of the whole newspaper.

------
gniv
I thought the A&P story in particular was peculiar, since they presented it as
an argument for not regulating Amazon, but looking more carefully into its
history (on Wikipedia), I would say what happened to A&P was probably
beneficial to consumers long-term. So if FTC looks at how the government
handled A&P in the 40s and uses that as a model for dealing with Amazon, I
would say it's not necessarily a bad thing.

------
SCAQTony
Never once was a de facto antitrust law mentioned that Amazon had violated.
Plenty of talk regarding how antitrust laws are weak how they they could apply
to Amazon by way of their ability to undercut competitors but that does not
really "wash" since 53% of Amazon is third party sellers:

[https://www.statista.com/statistics/259782/third-party-
selle...](https://www.statista.com/statistics/259782/third-party-seller-share-
of-amazon-platform/)

Ultimately Being a monopoly is not against the law if the company avoided
exclusionary or predatory acts.

~~~
int_19h
The whole point of the article is that the definitions of monopoly abuse that
underpin our existing laws are not broad enough.

------
whatshisface
>* Unwilling or perhaps unable to accept that a woman wrote a breakthrough
legal text, they keep talking about bearded dudes.*

I wish they would leave these comments out. If they wanted to protray the
opposition, they could have printed some of their arguments. Maye the
accusation is true but you can't just make accusations and move on. It's not
something that should be treated that lightly...

------
Obi_Juan_Kenobi
For those wondering about the 'bearded hipster' comment, it's specifically
referring to this: [https://www.competitionpolicyinternational.com/antitrust-
chr...](https://www.competitionpolicyinternational.com/antitrust-chronicle-
hipster-antitrust/)

This is written later in the article.

------
efa
As a novice, it seems extremely difficult to define what's too big. Her
argument is that Amazon owns the platform where the deals are done and thus
has an inherent advantage that undermines fair competition. Any established
company has an inherent advantage over those just entering the market. They
have market share, infrastructure, marketing, and so on. Amazon has a platform
but of course anyone can sell through other channels. It's just a matter (of
course a non-trivial one) of gaining traction. Personally I think Amazon is
way too dominate, but I just don't know how you codify what line they've
crossed. Maybe it's like the old porn definition - "I know it when I see it."

------
jondubois
>> “As consumers, as users, we love these tech companies,” Ms. Khan said. “But
as citizens, as workers, and as entrepreneurs, we recognize that their power
is troubling. We need a new framework, a new vocabulary for how to assess and
address their dominance.”

That's a good point; governments have to face the fact that people aren't just
consumers but also producers. In fact, based on how much time people spend
working each week, it's fair to say that people are more producers than they
are consumers. If this is the case, then surely the government should take
steps to protect people from monopolies.

------
wonder_er
Why all the energy on Amazon when the organization we'd expect to break up the
monopoly _is an actual monopoly_ in so many ways?

If we ask the government to break up Amazon, should we expect it to break up
the post office?

Amazon already may be in the decline - myself and many of my peers no longer
trust it to deliver items we purchase.

They have a big Fake Review problem [0] and there's competitors popping up all
over the place.

[0] [https://www.gimletmedia.com/reply-
all/124](https://www.gimletmedia.com/reply-all/124)

~~~
laughingman2
Well, the difference is the "actual monopoly" here can be voted out
democratically. Give the workers of Amazon and other companies the same power
to influence the board through one person one vote or a liquid democracy, then
we can talk about the supposed hypocrisy involved in asking government to
break up monopolies.

~~~
wonder_er
But we can stop voting for the thing by... not buying it. If enough people
stop using Amazon, Amazon goes away.

Now think of how large the demonstrations have been to protest various
government policies, and how little change has come about.

I've not yet been able to figure out how to vote out drug warriors, and
whoever the hell it is in the government that supports the US global military
empire.

If you can tell me who to vote for to legalize drugs and end the wars, I'll do
so in a heartbeat!

I think the government would like us to continue to think that we have say in
its going-ons, via once-every-two-year elections.

------
Invictus0
The NYT's editorializing is tiresome and distracting. Why the need to mention
her husband several times, and the unfounded allegation that she found
opponents because of her gender, and the "bearded dudes" reference.

I applaud Khan for starting this conversation, but I'm worried about misguided
legislation on these antitrust issues. Internet centralization is inevitable
and unstoppable, and regulations are likely to hurt competitors (in the form
of increased startup costs) more than the incumbents.

~~~
DenisM
Your arguments word for wordcoud be applied to breakup of ATT, and yet it
proved to be a great idea.

------
IBM
Lina Khan is a rising superstar in antitrust/policy circles and the next
Democrat in the White House should appoint her to the Supreme Court so she can
start to undo Bork's Chicago School influence on antitrust doctrine.

[https://washingtonmonthly.com/magazine/novemberdecember-2017...](https://washingtonmonthly.com/magazine/novemberdecember-2017/the-
democrats-confront-monopoly/)

------
mitchs
> She has her own critics now: Several leading scholars have found fault with
> Ms. Khan’s proposals to revive and expand antitrust, and some have tried to
> dismiss her paper with the mocking label “Hipster Antitrust.” Unwilling or
> perhaps unable to accept that a woman wrote a breakthrough legal text, they
> keep talking about bearded dudes.

So we are just presuming sexism? OK David Streitfeld, I immediately trust you
and believe that all critics of her paper are evil dudes who just hate women.
Oh look, we are moving on from that point immediately to dive into her back
story and not backing it up with anything. Guess I'll just have to take your
word for it that her critics disagreed with her instead of her work.

~~~
mitchs
Well, three quarters of the way through the article we got our answer.

> The April issue of the journal Antitrust Chronicle, edited by Mr.
> Medvedovsky, features a drawing of a bearded man on the cover right above
> the words “Hipster Antitrust.” In the middle of an ... there’s a photograph
> of a bearded man taking a selfie next to the chapter heading “Battle of the
> Beards.” It is perhaps relevant that only one of the 12 authors or experts
> in the issue is female. > The Hipster issue was sponsored by Facebook,
> another sign that Big Tech is striving to shape the monopoly-law debate. The
> company declined to comment.

Interesting. I'm annoyed that the article moved on well enough for me to come
post a comment on the comment that stuck out like a sore thumb.

~~~
whatshisface
That explains the beard but what about the accusation of sexism?

> _It is perhaps relevant that only one of the 12 authors or experts in the
> issue is female._

Hopefully that's not all that was said in support of it.

~~~
prepend
It must be sexism because 11/12 authors were male. Obviously. If you disagree,
you are sexist.

Also, my cat is sexist because she had five kittens and all five are male.

I don’t like discounting ideas because of the flaws of their originators, but
I’m likely going to ignore all articles that make such spurious claims without
evidence.

------
ihatethem
Of course the NYT would publish a 1k word profile of a virtual nobody as long
as they're criticizing big bad tech companies.

Tech companies are only an issue for the newspaper business, they are a boon
for the economy as a whole.

------
cliffordthedog
> Don’t let the government pursue Amazon the way it pursued A.&P., Mr. Muris
> and Mr. Nuechterlein warned.

why, because Amazon is so precious?

------
econ4all
Of course the NYT would publish a 1k word profile of a nobody as long as
they're criticizing big bad tech companies.

Tech companies are only an issue for the newspaper business model they are a
boon for the economy as a whole.

------
evantahler
While reading this article, I was presented for an ad for AWS. Checkmate.

~~~
iamdave
I'm going to shamelessly hijack this question to pose something that came to
mind reading this, and the more abridged exploratory linked by another
commentor ([https://qz.com/282971/what-everyones-getting-wrong-about-
ama...](https://qz.com/282971/what-everyones-getting-wrong-about-amazon/) for
the interested), since AWS was mentioned.

I propose a thought experiment:

Supposing government takes Kahn up on this modest proposal and starts levying
real regulatory eyeballs on Amazon and actually end up with something on the
House floor. Asking the HN crowd: how do you think this would even affect AWS
as a product and would it have any sort of ripple effects to the industries
and working engineers that rely on it?

------
keelhaule
Scholarly sugar coating, what about the monopoly of other industries such as
"printing the dollar". Amazon is just competing, it didn't usurp power, or
conquer a foreign land.

------
wrong_variable
Does Linus hold a monopoly over operating systems since maybe 80% of servers
and mobile phones use Linux ?

Maybe he twirls his mustache every night thinking about how much cash he will
make once he aggressively starts charging everybody 100 dollars to upgrade
their Linux version, and all he has been doing over the past 20 years is under
price until he has absolute vertical domination ?

Linux harms legitimate 'small business' owners who cannot sell their operating
system for 10,000 dollar / license to recoup their investment.

\--- BIG RED /S ---

Lawyers trying to create laws about macro economics is no different than me
telling a doctor how to perform eye surgery, it's what got us into this mess.

So if Amazon has a monopoly, and you think that is bad why not put you money
where your mouth is and aggressively fund its competitors ?

Where were you when for 20+ years shareholders of amazon were funding it's
growth, taking all the risk, most amazon investors have not seen any actual
cash from their investment, if tomorrow amazon makes a bad decision or
mistake, then all the unrealized capital gains wealth that is it's stock price
would plummet.

You could solve this anti-trust issue really easily you know ? China has
alternate e-commerce sites, so does India, instead of the populist message of
"Eat Bezos" maybe give some of your salary to actually solve the problem ? I
know amazon shareholders did, and they didn't have our hindsight.

Of course I am not going to take their talk seriously unless they actually buy
shares in Amazon's competitors, ask the EU how the shakedown of tech companies
is helping them, they could seize all of Bezo's, Zuck's, Sergey's wealth
(which is in stocks anyway, how much would it be worth after nationalization
?) and still not figure out how to solve the problem.

