You're over generalizing. There are plenty of sellers that took the time to develop their own products and sell them, only to be copied and undercut by Amazon.
How is that different from Walmart selling their Great Value store brand? They see what products sell well then formulate their own cheaper alternative, maybe even giving their product better shelf placement.
Every national grocer does this. It seems to be a pretty close analog yet nobody bats an eye at the practice.
In general there are many different grocery stores, even Walmart the massive company it is only represents something like 10% of grocery sales in the US.
Amazon represents something like 40% of all online sales. Typically having a large plurality in a market raises the likelihood of actions against you.
>It seems to be a pretty close analog yet nobody bats an eye at the practice.
Or, more likely, tech people pay attention to Amazon and not the myriad of suits occuring in the retail and grocery world.
The local Kroger supermarket has Kroger branded items on the shelf right next to the national brand. The latter is always more expensive, I usually buy the Kroger brand.
The supermarket wouldn't stock the national brands at all if customers weren't buying them.
> How is that different from Walmart selling their Great Value store brand?
Well for one it’s different in that store brands are often made by the same manufacturing/processing plant as the regular brand.
So not only is consent implicitly build in because the producer agreed to make the store brand variety, it’s another income stream.
And secondly the store brands typically go out of their way to differentiate themselves from the main brand to such a degree that if you hold the two boxes next to each other you wouldn’t mistake one for the other.
Thirdly they significantly undercut the other brands and sellers.
They can do so because they don’t have to pay themselves a commission and all the other fees, which in turn forces the other brands and sellers to match or eek out a small price difference in which they’re cheaper in the hopes to get some sales, cutting into the already thin margins that are left after paying Amazon’s fees.
Amazon is also in a better position because of the vertical integration, they have a direct relationship with the manufacturer which cuts out the margins of the middle men (the sellers and distributors), regular sellers on Amazon have the distributor’s margins to deal with and then their own margins and as opposed to Amazon they can’t sell their items as a loss leader.
As for Walmart and similar retail, it’s a whole different situation.
The manufacturer sets the price and within it, their margin. The retailer then purchases it at that price and tacks on their margin, but if it’s on the shelves then the manufacturer has been paid so there’s no risk for the manufacturer because the retailer carries the risk.
There are some nuances and exceptions, such as manufacturers sometimes being able to force a MSRP onto the retailer or a retailer being big enough to leverage a better price or a risk shifting agreement where the retailer doesn’t have to pay for delivery until the items are sold, nevertheless, in general the relationship is entirely different from the relationship Amazon has with its sellers.
And lastly, Walmart doesn’t hire people to walk beside you in the store to swiftly grab a Great Value variant and push it in your hand each time you so much as think of buying something.
The cereal factory that makes Kellogg’s cereal also making Great Value cereal is therefore not comparable to Amazon.
Amazon typically makes their Basics items look identical to the most popular brand and place it at the top of search results.
Now the original brand is forced to pay to get their item at the top of the list, and even then it’ll get second place, underneath the Amazon branded one (often barely above the fold).
Take this example of me searching for a padlock[0][1].
Not only is the Amazon branded lock identical to the one below it, it’s placed prominently at the top of the results in such a way that it’s the only product that can be seen in full.
The one immediately below it doesn’t get top spot despite being “sponsored” (i.e. paid to be prominently displayed) and if you look at the price they’re trying to be a little bit cheaper than Amazon in the hopes to generate sales but given how minor the price difference is with the Amazon branded lock, it comes across as a painful thing for them to do because it seems to me as a meaningless difference (but admittedly that’s me reading into things).
The issue is that when you’re the platform holder that sets the fees for sellers, controls what people see, have insider knowledge on sales and you use that to benefit your manufacturing and sales division, then you have too much control and are abusing your powers imho.
Brick and mortar retailers don’t have this much control over and information on their suppliers.
Reality is far more complex then the simple take you have here.
>by offer better quality stuff,
Amazon, for example, offering counterfeits of your product as your product is not under the definition of "better quality stuff"
>for a lower price
Again, offering a lower price consistently is one thing. Using pricing as a weapon, for example selling a product lower than cost in order to monopolize a market is not.
>If the price stays low and never goes to high monopoly prices then it is a good thing.
Not necessarily, but it goes a long way to balancing out the negative consequences. The problem, though, is they've never had prices stay low. Eventually, prices go up. So far, Amazon does this through loss-leaders; products that have low prices allowing them to capture a market and charge high prices for other products as a monopoly.
>If a company becomes a "monopoly" by being cheap, and staying cheap, thats just competition by definition.
If that was all they were doing it would be legal.
The competitive market has multiple goals - lower prices for consumers is only one of them.
Big companies compete in the market by offering the same quality for a lower price. That's good, no problem with them doing that.
The problem is when the big companies crush nascent competitors by using their advantages in the market and not by being better quality or more consistent. That's bad; it stifles innovation and creates market concentration, resulting in monopolies and allowing large companies to charge supracompetitive prices.
So you can have pro-competitive behavior (lower price) that balances out anti-competitive behavior (crushing nascent competitors through market manipulation or cartels); That doesn't mean everything you do is above board. It means that while the lower prices are there, a certain amount of anti-competitive behavior has been acceptable because the net outcome to consumers is theoretically positive.
[edit] Think about this - if you can win with lower prices, why do the other anti-competitive behaviors? Why not just have lower prices and let others try to compete with higher quality or lower prices than you? Wouldn't that be better?
The reality of this is, though, that the monopoly you form affects far more than the consumer product price. What the FTC is saying here is that they are moving back to structural restriction rather than simply allowing anti-competitive behavior so long as the price is good, a la the Chicago School.
>We are seeing low prices and then competitors that suck complaining about the fact that they suck in comparison to the more competitive company.
That's not what we're seeing, though.
What we are seeing is artificially high prices. One of the allegations is that if a seller prices below Amazon, Amazon removes their access to market.
>> So you can have pro-competitive behavior (lower price) that balances out anti-competitive behavior
>Defeating competitors with lower prices is pro competitive, not anti competitive.
I already acknowledged that lower prices is a positive, not sure why you repeated that. If that's your only point, then yes - you are right, lower prices is a positive for consumers. It's a balance, though; lower prices don't mean there is no anti-competitive behavior happening.
Undercutting competitors and copying them is often fine, though the process by which a competitor is undercut can be anti-competitive itself and have structural consequences that are anti-competitive, and copying competitors is obviously restricted by patent and copyright. It's not a blanket 'this is the whole purpose of competition' thing.
>Notice how I made no comment on anything to do with vague "other behavior"
It's not vague - it's laid out in the indictment. I get that you don't want to respond to it and only want to prove that lower prices is good, but that conversation ended, we all agree that lower prices for consumers is good. The question is how good. Good enough to balance the bad behavior? The FTC clearly thinks otherwise.
> and only want to prove that lower prices is good, but that conversation ended
When you respond to me and bring something up, it comes off as if you are trying to refute something that I am saying.
If you are now that that I was correct completely, and that you were just bringing up a separate point that is irrelevant and does not refute anything that I said, well then OK?
> Lower prices for consumers is not the whole point of a competitive market.
You are 40 years behind on the modern day interpretations of the anti-trust laws by the courts then.
An analysis of how much consumers benefit or are harmed by certain behavior is what the courts use for most anti-trust laws.
And lower prices are almost the court decided definition of a consumer benefit.
So yes, the point stands.
Someone else was complaining about competitors being undercut, and I responded by saying that actually lower prices are good and this is what our anti-trust laws are trying to promote, not stop.
>You are 40 years behind on the modern day interpretations of the anti-trust laws by the courts then . . . lower prices are almost the court decided definition of a consumer benefit.
That's not the policy of Lina Khan and the current FTC. She was literally put into the position she holds because she was critical of that framework for antitrust.
Yes, since the 70's Bork and the Chicago school has held sway in courts, but that's changing. So no, I'm not behind - this is why the FTC is bringing this case in the first place.
> Yes, since the 70's Bork and the Chicago school has held sway in courts
Oh OK, so then I am correct under the overwhelming majority position/framework which is the only interpretation that matters for enforcement, which is the interpretation held by the court system.
I am more than happy to accept that concession and only be "wrong" under the minority position that hasn't been relevant for 40 years.
> That's not the policy of Lina Khan and the current FTC
They can make whatever bad arguments they want in court, and lose their lawsuits I guess.
They don't decide the outcome of these court cases.
If anything this strategy is actually harming then, as they make failing arguments that the courts won't listen to.
If you took the time to develop and market your products, you would not have solely relied on Amazon e-commerce. Most likely, the single greatest source of traffic was Facebook (Instagram) and Reddit. You would only sell on Amazon, if you’re from EU (or RoW) and that Amazon US made sense for you in terms of logistics. In other words, if you solely relied on Amazon to make money that means your business model was BUILT on fooling consumers on Amazon algorithm not your actual product.
