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.
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).
>And so Bork argued that federal judges must resolve the “paradox” by declaring that the only legitimate purpose of antitrust law was to promote “consumer welfare,” basically meaning lower prices. And the only way to promote consumer welfare was to promote efficiency, because efficiency meant more production, which meant cheaper products. Any other purpose would interfere with efficiency and must therefore be ignored.
>To see how radical this was, just consider one example of something not captured by consumer welfare: employee welfare. In a town dominated by a single employer, workers may be forced to submit to poverty wages and abusive work conditions. Coal miners know this all too well—so do Walmart employees. (See Alec MacGillis, “What J. D. Vance Doesn’t Get About Appalachia.”) But to Bork, that could never justify antitrust enforcement so long as the product stayed cheap.
>The Antitrust Paradox makes for remarkable reading today. Like a caricature of a Chicago School economist, Bork explicitly warned against learning from experience. Rather, all business practices should be judged based on what “simple” (his word) economic models predict. “Only theory can separate the competitive from the anticompetitive,” he wrote. And theory says consolidation is good, because it means strong firms are crushing weak ones.
"... a central riddle of the 2000s: from 1999 to 2009, the economy had added zero new jobs. Even before the real estate bubble burst, growth was historically weak. Explanations like technology and offshoring didn’t quite add up.
Longman and Lynn had a novel theory: the rise in corporate consolidation was the culprit. Small businesses drive most job creation in the U.S. A monopoly, meanwhile, has little reason to hire more workers, because it can just charge higher prices."
people who talk about automation taking jobs being the problem or universal basic income being the answer should take heed of this, the central economic issue underlying today's societal and political challenges.
monopolies are anti-capitalist.
strictly speaking, unregulated markets don't have to devolve into monopoly, but functional markets are not particularly stable on their own, so monopoly does tend to be a common result. it's like a dipolar chaotic system where the second pole is stronger than the first--once the system flips to the second pole, it's hard to get it back.
even regulated markets can devolve into monopoly, as we all well know just by looking around. the early 20th century compromise was to allow monopolies to form but strongly regulate them. over time, we've allowed moneyed interests to weaken those regulations, with the entirely predictable result of the current imbalance of wealth distribution and social unrest.
I was under the impression for US regulators it was about unfair intentional competition stifling (for different values of "fair" than EU definitions).
> GDPR making more sense now?
Not exactly. One might expect more active measures if inability to compete was the motive. GDPR, despite my issues with it personally, appears intended to prevent data misuse regardless of company size. Granted skeptics view it as a lance to joust large US companies with. But EU has laws on the books to punish companies misusing their size.
In the EU, rulings taken collectively begin to feel like punishment is just for being a certain size. But in theory, neither side of the ocean makes it illegal to just be big and good at what you do.
The paradox is that environments where competitors organically grow most of the time are the same ones where monopolies grow too. You can't really build a healthy private sector via legislation alone, much less so if the legislation favors consumers over businesses in an unbalanced way.
I can see this point, but also the point that many consumers consider the collection of data about them amounts to a cost, given our current system. (e.g. there's a new, expensive risk for the consumer: suppose that Facebook's systems are hacked and otherwise private data related to security questions, location, income, gender and so on are used to help steal the consumer's identity)
I mean, does economics need to catch up here? Can we really say there's "no cost" to the consumer?
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.
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.
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.
This is because the Times is well resourced and basically competent enough to not fuck up the point of a story.
If I read the paper and find the great idea not in the article then that makes me think the author of the article is not so good.
It is not that it is a bad article, it is just that it has a completely misleading title based on the actual content of the article.
While being very interesting to someone interested in people. Complete with Khan's current work, her past work, other people she's working with now, examples of her reputation (almost a ninth district clerk), previous examples where her reasoning was used, and the outcomes of the examples. All very interesting to someone who is writing policy (or the stereotype of a hyper social ladder climbing politician).
The examples used are actually pretty brilliant if you want to take Amazon down a peg. The worst case Rockefeller example (which was nightmarish), and a grocery store that slowly failed after it was regulated (and let's be honest grocery stores are an industry where every company eventually fails, since even small decisions can change which side of red/black you're on). Biased, but stills fill the requisite we showed two sided of the story slot.
Khan seems to be arguing that Amazon has two types of monopoly power - horizontal monopoly power in specific sectors, e.g. books, and vertical monopoly power in ecommerce.
I agree that the first type should probably be more heavily regulated, though there's room for debate as to the appropriate level of granularity. (Should regulators look at Amazon's market share for books? Ebooks? Textbooks? Educational material? Entertainment?)
But as for the second type, I'm not convinced that there are strong economic arguments in favor of regulating vertical monopolies as long as the monopolist doesn't have horizontal monopoly power at any level of the supply chain. After all, as long as there's no horizontal monopoly power, competitors are free to vertically integrate themselves through M&A or organic expansion if the benefits of vertical integration are that significant. Of course, it's possible that AWS should be regulated as a horizontal monopoly in the IaaS space based on its nearly 50% market share. But IMO, any such regulation should only impact AWS (and any other areas in which Amaon has horizontal monopolies), not Amazon as a whole.
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.
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.
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.
Beside, there after plenty of instances in which companies sell below cost in a single to drive sales in another. Eg loss leaders.
I don't quite see the advantage in preventing any vertical integration. It just looks like a way to increase overhead and make everything more expensive in the process.
When they enter other fields they do undercut, but the two big, established brands (amazon.com and AWS) don't.
>they'll make a killing when they raise prices. if you care about the market, you don't want to let this happen.
That only really applies if it's hard for competition to come back. But I doubt there are large barriers of entry unless Amazon makes most other packet carriers go out of business.
Nobody's trying to "destroy power for no other reason than it exists". There's plenty of established powerful companies in e.g. the car industry, telecom etc. where the rules of what counts as anti-trust are thoroughly established. Tech companies of this scale are a really young industry, so this is still all being figured out, and it's no surprise given the lack of precedent and their relative power that tech companies are in the spotlight when it comes to regulation.
> their core business is sales,
> warehousing and order fulfillment
> We don't call Airbus a Tech
> company either.
What does being banned from YouTube even mean in this comparison? I have no idea. This is why these new business models are something regulators are still catching up to.
But what if we've create a platform that is totally independent of Amazon(so that other retailers will use it), a platform that decouples warehouses from itself, so that new warehouses(owned by entrepreneurs) are freely added to that system and free to compete with it's other - maybe under the guide of a benevolent dictator(for example guiding toward optimal places at a specific time)? and the platform, since it's regulated as a utility, is pretty open and runs under fair rules ?
At the very least, it's a much more competitive system.
Facebook, Amazon, Apple, Google all seem to be playing a very long game. So why wouldn't they try to moderate the trading platform on Amazon as fairly as possible.
In the long run, that's how they can avoid regulation.
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.
When we come to a point where one group of people is not allowed to critique the ideas of another group of people because it is socially acceptable to demean those critics based on their gender makes me think we're doing something wrong.
Edit: For people that downvoted me, or a lot of the other comments about this sentence, I would like to know why.
But then it does make sense -- it refers explicitly to this cover  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.
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.
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.
I've noticed a lot of juvenile or outright vulgar language choice in reporting lately, as journalists are abandoning any effort to appear professional or dispassionate.
Ultimately Being a monopoly is not against the law if the company avoided exclusionary or predatory acts.
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...
This is written later in the article.
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.
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  and there's competitors popping up all over the place.
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.
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.
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.
> 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.
>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.
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.
Tech companies are only an issue for the newspaper business, they are a boon for the economy as a whole.
why, because Amazon is so precious?
Tech companies are only an issue for the newspaper business model they are a boon for the economy as a whole.
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?
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.