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Senators aim to block tech giants from prioritizing own products over rivals’ (washingtonpost.com)
125 points by bookofjoe 43 days ago | hide | past | favorite | 82 comments

I hope the article isn't accurate, because if it's only "tech giants" to be prohibited from store brands, that would mean, Congress has decided, it's only brick-and-mortar giants who can use sales data to grind product sellers and compete using store brands. I mean, it's not as if drug chains (Walgreens, CVS, etc.) and grocery chains (Kroger, Albertsons, etc.) and big box chains (Costco, Walmart, etc.) and pretty much every sort of large retail operation doesn't do just the same thing.

And speaking of using data to grind suppliers, ever since the early days of the NCR Teradata project put them miles ahead of any competitor and made them the largest retailer in the world for decades (sales still a bit ahead of Amazon last time I looked), they've been grinding prices, forcing offshoring of production to reduce labor costs, forcing suppliers to economize (that is, cut corners) on manufacturing to keep prices low. But, hey, it's tech giants selling store brands, that's the big problem!

The way this article is written makes it seem the focus of the bill is preventing the promotion of Amazon Basics. Personally it strikes me as a bit of a straw-man. The article seems acutely focused on this small aspect of the larger policy. Like the author is hoping the reader will throw the baby out with the bath water, in an evasive way. (Jeff Bezos owns the Washington Post)

Personally I am finding it increasingly difficult to read the Post without noticing bias. I would encourage comparing this article to Klobuchar's own description of the bill before coming to your own conclusion. https://www.klobuchar.senate.gov/public/index.cfm/2021/2/sen...

It would seem the portion of the bill in question regards, "exclusionary conduct". Like if Amazon refused to list retailers that compete with its own Amazon Basics brand, akin to a grocery store refusing to sell Rice Crispies because it competes with their own Crisp Ricies. Not necessarily precluding them from offering the products.

Even then that's only a small bullet point in a much larger bill. Most of the intent seems to be focused on increasing the capacity and resources for pursuing cases pertaining to anti-competitive mergers and acquisitions by these companies. The potential for exclusionary conduct becomes particularly concerning given the current trend of a few corporations gobbling up everything in their path that even remotely competes with their products.

Thing is it doesn't matter if a product is a good idea which solves a niche problem if it's involved with these massive companies. If that product doesn't make a billion dollars then it finds itself in the Google Graveyard. Personally I don't want to see new and innovative things have a bad deal forced upon them, only to merge into a morass of vanilla ice cream because they didn't make ALL the money.

The Klobuchar PR comment you link dated Feb 4, 2021 references S.225, introduced in February.

This article seems to be about a new bill that Klobuchar and Grassley will introduce "next week".

In yesterday's WaPo article, Klobuchar seems to imply that the new bill will motivated similarly to HR3816, which is very different than S.225.

Until the new bill is published it is difficult to have a solid analysis. It is possible that the lobbyists quoted by WaPO actually have seen draft versions given how Washington actually works.

So ... expect this item to appear on HN again next week when outsiders can have a more informed opinion.

> Like the author is hoping the reader will throw the baby out with the bath water, in an evasive way. (Jeff Bezos owns the Washington Post)

While I think it's correct to be skeptical of Washington Post stories which report on Amazon, I can't imagine Amazon would be happy with some of the characterizations used in this article.

> like Amazon sucking up data from sellers on its platform to copy the products in-house.

So a place like Aldi will have to stock things other than its store brands? How do you pick which brands need be included? Judging from a place like Sprouts or Whole Foods there’s about 50 varieties of rice crispies.

Yeah, and will the Apple store have to carry Android phones?

Politics does not exist to resolve social problems. It exists to resolve headlines.

So, yeah, it is a straw man. It’s framed as a general problem of society, but it’s a feel good solution that again waves off any conversation about raising taxes in response to their behavior.

Senators are tackling this very serious problem, to be immediately gamed given billionaires financial resources.

It’s not a tax on money, it’s a tax on agency. Fiat and macro economics is a euphemism for “what are people doing and how do we make them do this instead?”

It’s not about perfect mind control, but inflating their value to deflate our agency (or buying power, whatever trips your trigger).

We get debate protecting one concept or principle or another, but think a bit more literally and it starts to take on a whole new perspective.

The counter to that argument is that the brick-and-mortar chains don't claim to be platforms or marketplaces for other products. The business model of a Walmart is pretty simple. Buy wholesale, sell retail.

It's a little more complex than that. Retail chains often charge consumer packaged goods companies for shelf space. Essentially the retailers are selling access to their "platform".


> The business model of a Walmart is pretty simple. Buy wholesale, sell retail.

Is it?


I would not be surprised to see the big retailers passing off a lot of inventory risk to the smaller brands it can push around. Walmart also definitely uses sales data from its stores to sell their own brands (Mainstays and others) alongside other brands.

How many of those brick-and-mortar stores control more than 50% of brick-and-mortar sales? How many are accessed via search instead of browsing?

To be fair the level of competition in physical stores is way beyond what we have online.

>To be fair the level of competition in physical stores is way beyond what we have online.

That is an absolutely ludicrously absurd statement. Physical stores are physical, by definition they have vastly more scarcity. There is only so much physical land in high density areas, and physical stores that are even tens of minutes away, let alone hours, are in an enormously different competitive situation to ones nearby. Whereas online I have vast numbers of stores that are all perfectly equal "distance" away. They are freed from many if not all of the tradeoffs in storage space vs convenient (and very expensive) locations. Online stores are cheaper both to start and operate. Someone can reach a global audience from literally their garage.

In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving. There is no competition at all... except from online.

> In comparison, a huge percentage of the country has maybe single digit stores within 30 minutes of driving.

That's also a part of the country that doesn't have a ton of people.

Again, I wish this applied to physical stores. But the fact that it doesn't, doesn't mean we should say this is a bad bill.

This is completely wrong.

Supermarkets, departments, hardware, chemists etc. in every country is dominated by 1-3 chains who have the capital and time to extinguish any competition. And it's been this way for a century or more.

In the online world every sector has anywhere from hundreds to tens of thousands of competitors not just locally but from around the world.

To setup an online store you just need Shopify, supplier and a few thousand for ads. For a physical store you need tens of thousands for fit out and leasing.

Name more than two phone operating systems.

There are hundreds of big box retailers, ranging from drug stores, big box retailers, specialty stores, and more.

Before Amazon, most of them were incredibly healthy. And lots of them still are.

Name more than four mobile app marketplaces.

Name more than two search engines.


Tech is winner take all, then they pivot that power to take over more industries.

Google now sells fitness trackers. Apple is a movie studio.

Amazon is already starting to buy out physical retailers. The other tech giants won't be far behind.

This is why we need legislation. To keep capitalism evolutionarily healthy rather than turning the world into grey google goo.

How about you tell us which country you live in and how many supermarket, chemist, hardware etc chains exist there.

In Australia for example, we have basically 2 supermarkets, 4 banks, 3 chemists, 2 hardware stores, 2 department stores etc.

This idea that winner take all is unique to tech is laughably ridiculous. Especially for those of us who have had to compete and /or work with one of those major chains.

I don't know, in most countries that I've visited or lived in, there was way more competition than duopolies and monopolies.

I'm currently in the UAE where there are more than 30+ retail chains competing alongside online retail shops (including Amazon). Thats ignoring independently run tiny grocery stores which number more than 5000. All of them compete to provide the best service, and incidentally its the groceries that are winning.

There are more than 10+ national banks and more than 30+ banks providing retail services. And even though there's only one major oil producer (ADNOC), there are multiple gas station chains. All this in a tiny country of 9 million people - I purposely did not take into account a country such as Germany or India.

There is one industry which is a duopoly, telecom, which is a state run duopoly, and the quality shows. Customer service is the worst - so bad that even a royal prince from a ruling family cursed the telecoms, so bad that the heads of the bigger firm were berated by the rulers in a meeting.

If you're gloating about how monopolies are the norm around the world, well quite frankly, it isn't. On the other hand, it might be far more symptomatic of the direction the countries you're referring to are heading in. Incidentally I have observed the pattern you mentioned in the UK too.

The United States.

I think I could enumerate 100 major (publicly listed) stores if I tried without even using Google.

And tech is also operating where physical constraints don't apply. They can grow as large as they want.

Is anyone old enough to remember setting up a landline phone line?

This was 20 years ago - the phone company said I needed to pick a long distance provider but they were legally prohibited from telling me anything about them other than their names. They read me a list starting with a randomly designated letter of the alphabet.

I'm sure the government will handle this problem just fine...

And before they broke up ma bell you weren't allowed to plug your own electronics into the phone jacks. [That's why we had acoustic coupled modems existed.]

You also had to wait a month to get a phone line hooked up too.

Long distance cost dollars per minute.

Breaking up ma bell was the best thing that happened to telecommunications in the USA.

I do remember that! And then after they read their mandated list I picked a random company and then ended up using a VOIP provider. They had a local access number you would call, put in your secret code, and then you could call anywhere they had an exit point, for like 1 cent a minute, which was crazy cheap at the time. But you had to deal with a 3 second delay because the internet wasn't fast. :)

This doesn't sound bad... wouldn't the best company eventually win out from word-of-mouth? Unless you had to choose under duress or the receiver would shock you or something

What is the problem with this?

For the love of all that is good, I hope this requires my iPhone to allow me to choose different defaults.

I can’t wait until I can use Alexa on my iphone instead of Siri, who now just seems to do google searches with the most basic of requests.

Me: ‘<any question>’

Siri: ‘unlock your phone and read this ad-ridden search result’

This would so improve the voice ecosystem because there would be actual competition.

You can install Alexa on your iPhone. At least I seem to remember doing it.

Yes you can install the Amazon Alexa app and it works well, as long as you unlock your phone, open the app, and then say “Alexa, set a timer for 5 minutes”.

I’m fairly certain gp post is saying they’d like to replace “hey Siri…” with “Alexa…”

Oh. Now I get it. Is there going to be reciprocal unlocking of all the Echos and cars/FireTVs with Alexa built in? Or the Hey Google boxes?

It seems like the only one of of those is upgradable, which seems to give Amazon an advantage.

That would be great.

Sorry, which would be great? The world where Amazon has an advantage, or the one where you can put Siri on an Echo?

It would be great if people could choose what software goes on a $20 Bluetooth speaker with a built in mic.

There would be huge kudos to Amazon if they had so much confidence in their product that they also let you choose:)

I got bummed out when a lot of googles (much cleaner) options were de-prioritized. Could we at least let USERS select a preference to allow google to prioritize its own products etc?

I want google only finance website, I want amazon only seller etc.

In the US, the main problems are housing, healthcare, and education. All with heavy government involvement, so Senators decide to get involved in Tech to stop what is legal in every other industry?

The big problem with this argument is that tech is everywhere now.

Housing? Look at the pressure that companies like Zillow are applying to housing market by buying up houses and holding on to them without providing any real value to the market. Healthcare? Google and Amazon are both making inroads to capturing and owning various aspects of healthcare data transfer and management, which is one the most cumbersome and expensive aspects of healthcare today. Education? Several big tech companies are involved there as well.

You can't separate big tech from any of the industries you just listed because their hands are in all of them, which is one of the big reasons we're having this conversation now.

In defense of Zillow, they are in fact providing a service -- liquidity. If you need to get out of your house now, Zillow makes that possible.

Edit: To be clear, I don't think this is good for society as a whole, but they do provide value to someone -- they aren't just sitting in the middle rent seeking.

Zillow does many things, some of them useful and beneficial to individuals and society, others not so much. Back in the good old days society tended to realize that we have the power to collectively determine which activities are allowed and which are not, but it seems like somewhere along the way we forgot that we have this power.

On the other hand, they are impossible to compete with pushing normal people with local money out of the market. Very few individuals can, or will put in an all cash offer, as-is, no inspection

I agree, I don't think it's beneficial to society as a whole, but they do provide a service that some people find useful.

And companies like Black Cube that run psyops campaigns on social media are providing a service too, someone absolutely benefits from it. That doesn't automatically mean it's beneficial to society.

I never said what Zillow does is good or beneficial, just that they do add value.

Sure, they add value for those that own property at the expense of everyone else.

When you go to defend a company that essentially acts to exclude large swaths of the community from home ownership by accumulating real estate assets and driving prices up $400+/sq ft in many communities without actually doing any work to these houses, it's important to distinguish who exactly benefits here, because it's not most people that benefit from this.

Defending a company that adds value exclusively to the wealthier, property-owning class to everyone else's detriment by arguing that they "add value" is a bit of an oversimplification, isn't it?

I’d consider providing liquidity a negative. Doesn’t that prevent people from selling for lower values and help prop up housing prices?

It's a negative for the local housing market, but it's a positive for the seller as well as a positive for the housing market the seller is moving to, because now they have cash to buy in the new market.

Like I said, I think it's a net negative for society, but there are people who get value from it.

Isn't liquidity good for buyers and sellers? They're essentially acting as a market maker, no?

Wow that’s so great. If you’re filthy rich

Are you really making the argument that Zillow is the cause of housing prices going up? They bought 2,373 homes out of 6.5 million sold in 2020... Housing prices went up because of low interest rates (caused by the government).

Regulating tech companies has bipartisan support, so it's an easy way for politicians to get things passed that will be popular with their constituents.

Unlike other industries, tech companies haven't banded together to create some SuperPAC named something like "American Association of Tech Innovators" to lobby/bribe politicians against regulating.

For healthcare, you have the vile "American Hospital Association" and "Pharmaceutical Research & Manufacturers of America " goblins trying to block any legislation that will lower healthcare costs at their expense.

For housing, the high costs are heavily affected by restrictive local zoning limiting the new supply of housing. The "lobbying" in this case is local NIMBY groups that every state/city has to fight.

For education, the high cost of college is due to the fact that the federal government originates/backs the vast majority of student loans. They basically allow colleges to charge whatever they want, pay them up front, and then it's on the federal gov to collect from students afterwards.

When they're effectively handing colleges blank checks, no shit they're going to charge the max they can get away with. It's so straightforward and infuriating that this point is rarely ever discussed in the debates around college costs. If these "non-profit" colleges (vast majority are) want access to that vast student loan money, they should have to play ball and only charge what the feds will allow. If they want to charge more, it should be their problem to find a way to get paid.

Healthcare and education may be problems in America, but we are better off than we were before the government programs provided emergencies rooms and a literate population.

Are you sure you don't have the causation backwards? "X is bad because the govt stepped in" vs "the govt stepped in because X is bad/hard"

The govt stepped in because X is bad…now X is worse. Happens more often than not.

Housing, healthcare and education are big and huge problems. They used to be even worse. That's why the government got involved.

"...the bill reflects a growing realization that competition laws, like the Sherman Act of 1890, which prohibits anticompetitive agreements and attempts to monopolize markets, need to be updated for the digital era. (Amazon founder Jeff Bezos owns The Washington Post.)"

... exactly.

Is this talking about H.R. 3816? I hate it when these articles mention bills but don't link to them.


> Is this talking about H.R. 3816?

No. The article mentions this is legislation to be introduced next week by Senators Klobuchar and Grassley. H.R. 3816 has already been introduced by Cicilline, a Rhode Island Congressman.

Thanks. American legislation confuses me, and I'm American. Too many organizations that report on it don't link to the bills they talk about, and when I google them I get things like this, with the exact same name. Definitely doesn't help with my casual attempts to understand it.

I think it would be interesting if a startup media organization adopted the convention of reporting the news in a more epistemically strict form, something like:

> "Senators claim to aim to block tech giants from prioritizing own products over rivals’."

Indeed it is possible, and maybe even "likely" that these politician's actual intentions match their stated intentions...but then it is also possible that they do not, and it is definitely possible that their minds or intentions could change along the way. I wonder if simple changes like this might maybe have some useful effect on affairs, what it is we're doing now sure seems to be yielding far from perfect results.

A good first step.

The best move would be to prevent giants from having so many hands in so many jars. The lines are hard to draw, but a good heuristic would be if they're stepping across industry boundaries.

Commoditizing your complement is great if you're engaged in war tactics against a few rivals, but when it's broadly applied to everything it's essentially a scorched earth campaign that has massive negative externalities for the entire capitalist ecosystem.

As an example and a prediction of the outcome of this behavior: in a decade there will be few movie studios left because Amazon, Apple, and Google ate them up so that they can keep eyeballs on their platforms.

Things we deal with today: browser monoculture, unilateral decision making, and erosion of ad blocking. Devices you can't repair that are the only way you can access certain sets of services. Etc.

If these were separate companies, the experience would be top notch for each piece, and user rights would be respected.

The simplest approach I've read so far was Warren's proposal to split those that manage markets from those that compete in said market.

Specifically, Amazon can run a giant online marketplace, but it shouldn't be able to put it's own products in that marketplace. Being able to both control the market and provide goods and services within the market is a recipe for disaster for everyone that isn't in control.

How about applying that to stores in the state of MA, CVS can't sell house brands, and the grocery stores can't do it either. Let's see how it works there first, before doing it at the national level?

This is akin to disallowing sugar completely because too much sugar causes people to become unhealthy.

The issue here isn't the action, it's the scale at which this action is able to occur.

I don't see much of an issue with any company having lots of entry points into different industries. I see more of the problem being tight control over vertically integrated aspects of the supply chain.

I'd prefer to see rules limiting companies from creating products in 2 consecutive/complementary components of a supply chain unless one of the products is completely open for 'swapping' out with something else. This allows companies to still benefit from vertical integration if they don't commercialize one side of things. But as you said, it's hard to draw the lines, cause you could define a supply chain in a ton of different ways.

Prioritizing isn’t the only problem. There’s also straight up copying their products: https://www.cnbc.com/2021/03/04/amazon-accused-of-copying-ca...

The intentions are good but I suspect like most laws, it will have both loopholes and unintended consequences. The bigger question is, how do we prevent that? Congress has a dedicated group of economists to advise on laws that affect the economy, maybe they need a group of engineers to advise on technology laws?

It was called "The Office of Technology Assessment." It was one of the shining starts of the US government, and governments around the world used it as a model.

Destroying the OTA was one of the center pieces of the Republican's "Contract with America," was they perceived its advice to be an obstacle to their legislative goals.


The question is how to create something like that without it being susceptible to regulatory capture.

Everything is so partisan now that the article reads like "beloved pro-science institution destroyed by hidebound anti-science Republicans" while also claiming that the Office was 50% Republicans and created during a Republican administration.

It would be interesting to have, instead of that, some information on what it was that caused the Office to become a partisan battleground, if we want to avoid it happening again.

I bet the consequences are very much intended by whatever lobbying firm wrote the bill. Determine who wrote it and who they represented at the time and we can determine what the likely consequences are.

Eliminate lobbying for one. Loopholes aren't accidental, and it's pretty clear that policy that affects the money tends to be influenced by it.

A group of advising software people isn't gonna do anything when FAANG is spending millions on lobbying the policy that ultimately governs them.

> eliminate lobbying

If Congress is about to pass a bill regulating tech companies, should it be illegal for said companies' employees to reach out to their representatives? What if one of them offers to drive others to D.C. to meet the bill's sponsors in person? What if one of them, say a manager, picks up the gas tab? Would a service that notifies you when bills in your interest areas come up for debate be considered lobbying? Should a Congressperson's staff, drafting a bill to regulate agriculture, be banned from reaching out to farmers for input?

Lobbying encompasses a lot of activities. Some of it is fundamental to citizen-representative communication. A lot of it is sleazy. One of the principal problems the lobby-reform movement faces is in imprecisely delineating between the two.

(Lower-hanging fruit, in my opinion: elected officials "retiring" into padded Board seats and advisory roles. And campaign finance.)

> should it be illegal for said companies' employees to reach out to their representatives?

If they're doing so on their own behalf, with no compensation or censure for doing so or not, that's fine. If they're doing it on their employer's behalf, their employer (not them) should face felony charges.

From the first amendment:

> the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

People have a right to reach out to their representatives. Corporations do not have a right to reach out to people's representatives.

> People have a right to reach out to their representatives. Corporations do not have a right to reach out to people's representatives.

This is the assembly dilemma. How do you nullify rights for a group of people without nullifying it for individuals.

Tell me how you you would word a law that makes it illegal for corporations, groups of people, to lobby without making it illegal for individuals (or small groups thereof). Then I’ll tell you how I’d pay for those things alongside a similar, coïncidental bump in compensation. Then you’ll tell me how you’d ban that. And we’d go in circles, all the way until the right has been—practically speaking—extinguished.

You... do realize lobbyists are paid, right?

> Tell me how you you would word a law that makes it illegal for corporations, groups of people, to lobby without making it illegal for individuals

Eh, sure: corporations are legal entities with things like tax filings, budgets, and bank accounts. If any of that money is spent on influencing legislators, the corporation is dissolved, and all of its assests siezed.

Lobbying will never be eliminated. There is no scenario where that is ever going to be allowed to happen. Both sides of the political aisle love it and use it to their advantage, it's useful and lucrative for the political class. Their only interest is in controlling it, never eliminating it. So what's the next best option after that?

Lobbying is a necessary evil. Not every legislator can be even a generalist in half the things they vote on. The problem comes when they donate money to specific legislators. Regulate that first.

Perhaps that's a sign that they're involved in too many things.

Makes me wonder if there's anything like a TDD concept for writing laws.

Hey how about this? Legislation to block Senators from prioritizing their own political gains over the benefits of their constituents?

These laws violate the private property rights of the shareholders of these companies.

The “government can fix it” mentality. A rule set and power grab for the sake of helping the little guy, that don’t really care about to begin with. It’s postering like this that clearly mark two rivals as the opposite side of the same coin.

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