Many other comments here in addition to yours fail to grasp that one doesn't have to have a literal 100% monopoly to show monopolistic behavior that leaves the customers as a whole worse off.
Like this article says, prices are increased across the board because of how Amazon acts.
Don't paint amazon subscribers as victims here. I am entirely satisfied of the time saved and the cost of Amazon products I buy.
The yelling comes from the Amazon sellers side, not from the customers.
There is plenty of competition for me to shop around, and if there are none, I'd rather buy from Amazon as I trust that they reduce the costs , fees and taxes effectively.
I would argue that the government should do less and not more. If they really want competition to grow, they could stop charging capital gains on every item a seller flip.
For example, when I was selling on Ebay, after the platform fees, the shipping fees, and the government taxes, it's just not worth it to enter the sector as a small guy.
You're kinda proving the point here. If it weren't for Amazon's behavior, you could have gotten a better/cheaper service. But you can't, as the prices are raised across the board. And the true cost is hidden from you.
The point of the lawsuit and detailed in the analysis is that ALL online purchases end up being influenced (controlled?) as a result. This creates prices that are 30-45% higher across all retailers for a given item.
That would include Amazon Prime subscribers and random internet guy buying the same thing from a different site.
If Amazon controls their own storefronts, that's one thing. When they can exert control over competitors' storefronts - or worse, all competitors' storefronts - that's a different matter.
I was a eRetailer and I often lowered my prices accordingly to be more competitive than what was proposed by Amazon.
I ended making the sale because someone did not buy at Amazon.
Nobody forced me to raise prices at all. Amazon had no control at all on my prices. The market price is what is offered and what the customer is willing to pay.
If it's too expensive, nobody buys there.
I think we both get the point, except we think in different terms about the solution. I'd rather let the market works, have a transition towards competition which will eventually come down the line (5 to 10 years) than have big government try to solve the problem by making everything worse off.
There is a subtle tipping point of negotiating leverage where an agent has the ability to influence or dictate prices for the entire ecosystem. The formal term is "market power" [0].
Say you're a vendor producing widgets for $10 each, costing $9 each to produce. 80% of your buyers prefer the buying and service experience of Amazon, for all the reasons you describe. They have no brand loyalty to you: they go to Amazon, type "widget" in the search box, and buy the first result with 4+ stars costing roughly $10.
Amazon decides out of the blue that they want $1 per sale, and what's more, they will drop you from their platform if you offer a different price on Amazon and other storefronts (be it another giant like Walmart, or your own low-traffic e-commerce website). Because this $1 is the entirety of your profit margin, your only way to stay in business is to raise the price to $11, and because your widget competitors have been given the same deal, all widgets now cost $11, and when consumers are price-shopping, they're now conditioned to see $11 as the normal price for a widget. You could opt out of Amazon entirely, but that would limit you to 20% of revenue, which is also a dealbreaker. (You theoretically get a higher cut from that 20% at the new price-point, but you also suffer the deadweight loss from buyers who can't/won't transact at that price point.)
The standard libertarian retort would be that the seller consented to their contract with Amazon, while no citizen or market actor ever signed some imaginary "social contract" with state regulators, and it's a legitimate point. But saying that a vendor whose livelihood is dependent on a presence on Amazon.com (whose revenue rivals the GDP of many nations [1]) "chose" that relationship is like saying that each citizen "chooses" the laws of the nation-state they live in, because they could have moved elsewhere. Yes, technically there is an exit clause; but in both cases the table is tilted such that exiting is deeply against the interests of each actor, thus each actor is incentivized to perpetuate the asymmetry in negotiating power.
Market competition is a great thing when it works, and many times it does. But oft it's forgot that the whole point of a competition is to win. And whether we're talking political power or economic power, concentrations of power tend to snowball and entrench.
I clearly see a path forward where competition will work.
I truly see an horrible path if government starts to put its big fingers everywhere and start causing all kinds of secondary market effects. When you look in hitory, it ALWAYS ends up being worse.
Nobody speaks about Walmart only sellers, that don't want to work with Amazon (as they are crazy with sellers).
Nobody speaks about Ebay sellers, nobody speaks about shopify only sellers. Nobody speaks about LOCAL sellers.
Those are all competitors than Amazon has no control over it.
Yes Amazon has a large distribution network, and competitor are starting to catch up from what I can see.
But anyway, what can I do other than expressing my disagreement ? I very well know we are going towards a gov intervention. I can only laugh in my corner, alone...
> I truly see an horrible path if government starts to put its big fingers everywhere and start causing all kinds of secondary market effects. When you look in hitory, it ALWAYS ends up being worse.
Source? It worked out well for the browser wars. It worked when it blocked (several) telco merger(s). And many more.
And that's just anticompetitive protections. What about the FDA and OSHA putting its fingers into the food industry so there aren't literal fingers in my food?
If you're happy, all power to you, not everyone else is. Amazon is essentially doing the same thing credit card companies did in the past. To hide their cost they are increasing everyone else's cost. Their approach primarily hurts people that DO NOT want to shop at Amazon.
They are a monopoly and are being accused of being so because their mandatory policies forbid the merchants from selling that product anywhere else cheaper than Amazon.
This means that if I buy the product from say Walmart or Target, then I am paying 25 to 35% more for it. This is because the merchant cannot list it anywhere else cheaper than they list it on Amazon.
That is a clear violation of monopoly laws and I applaud that AG for his efforts to abolish these "most favored nation" status agreements.
A putting a clause into a contract they enter into with B that B may not sell to C (competitor to A) is obviously anti-competitive. Think of the whole Intel "you can't buy AMD" clauses with OEMs.
Ive def noticed Amazon becoming more and more of rip off. I cant even find things for less than $10 anymore. There are numerous items I’ve looked into buying from them, but it’s priced at $12 on Amazon, where i could walk into a target or Wally World and get it for $5...
I haven’t found any sites where I can get cheaper small items anymore. I’m up for suggestions for other online retailers.
I wonder how long the momentum will run on this working. There’s still a lot of earned assumption that Amazon is a competitive price.
I’ll usually let a slight increase in price slide for the convenience, but I’m always looking for a reason not to use Amazon if I can - and a rip off price is a good trigger for me to be patient and get the product next week with a smaller shop.
I think this is Amazon's goal, where you're expending energy not to buy from them. You need a reason not to and then it only lasts for a short time period.
They're banking on being people's default retailer which lets them get away with this behavior.
Yes, I've also noticed that the cost of small items has gone up significantly. Amazon passing shipping costs and fees onto sellers explains this finally.
I guess it is relevant to the "Amazon is an evil and monopolistic organisation" theme.
Maybe not relevant for the lawsuit specified in the report, they are certainly entitled to sue for any reason. But the classic theme still show its nose.
On an other note, if amazon has 128 million prime subscribers and they like the service, it is something politicians need to be aware if they still want to be elected.
In the United States the government is not allowed to get religion. Private Citizens can worship whoever or whatever they want, but the Government isn't supposed to.
Now, you might observe that the country's money says "In God We Trust" on it, its legislature openly prays to the Christian God, its Head of State goes to a Christian church, and its Supreme Court sure seems like they have some very peculiar ideas about how exactly such freedom for "private citizens" manifests...
But in principle the United States does not have an Established Church and is not permitted to establish one. This may be cold comfort de facto if you see Organised Religion with its tendrils deep in the heart of government, but there you are.
Inflation is not always in relation directly to the price.
For example, if Netflix is able to get 10,000,000 new subscribers. It receives $100,000,000.
It can now spend $50,000,000 on new infrastructure, which will make the price rise.
Netflix can also hire for $50,000,000, which creates jobs that otherwise wouldn't exist. Those new employees, working for that new currency will spend their salaries, rising the prices.
but those $50 million of subscription revenue means there's $50 million less spent on something else. And those $50 million paid to employees are for producing value for netflix (presumably, more than $50 millions worth).
So no, this will not increase inflation. The goods produced matches the money spent, so demand and supply continue to match up.
Inflation would occur if production ceases, but demand continues to remain the same (or higher).
I forgot to specify that the 100 million is entirely printed money.
Whatever the way you see it, that 100 million of buying power should not exist and eventually ends up lifting the prices of normal goods just with the economic activity it generates.
i mean, if you claim that $100 million was printed, then regardless of whether it's netflix or something else, it may increase inflation.
But the thing is, there hasn't been that much money printed by the FEDs or the US gov't. The stimulus cheques are not money printing, but money borrowing - a major difference. Borrowed money needs to be paid back, and so there may be temporary inflation caused by said stimulus, but it's clawed back in the future when the stimulus' effect has worked!
"Borrowed money" is wrong term here. Yes, officially US government is borrowing it, but it is borrowing from FED which does not really have the money.
Imagine this: you need $100k so you come to me, and I write you a check. BUT: you're not allowed to cash that check. Instead you use it as collateral for a $100k bank loan. But the bank is not allowed to cash my check either, it can only put it into safety deposit box. And if you default on your loan bank will put that check on auction. So, time flies an no one ever tries to cash my check. And if they ever tried they would find that I never had that $100k in my account in the first place. I "printed" that money when I wrote the check. That's how "borrowing" between FED and Government works, and that's why it is money printing. FED is bluffing about having all that money, but no one is legally allowed to call their bluff.
Also: no, those loans will never be repaid. With Modern Monetary Theory debt can only increase in nominal value, until US follows the trajectory of Venezuela, becoming a failed state with hyperinflation.
