When one player now has over half the market, you need to carefully watch what they are doing in order for them not to start exploiting their position. This is why it's different between Amazon and Home Depot, they hold different amount of the market, so even if Home Depot wanted to exploit their position, they probably couldn't. Amazon with their marketshare, can do so much easier.
Then there is the issue of specifically Amazon ranking their own products above others in their search results, even if others have better reviews, more purchases, more page views and so on. Then we start getting into "abusing their market position" territory, and this is what is getting investigated now.
How does Amazon harm consumers? I mean precisely, how?
Amazon is one of the most highly rated companies in the US by its customers. Its NPS score is 69 and 70 is considered "world class".
I can get almost anything online shipped to my house the SAME DAY. If Amazon sends you the wrong item they'll let you keep the wrong one and immediately ship you a new one!
How is taking action against Amazon going to help consumers? Seems to me that just ends up being a giant win for Walmart and target who offer worse service and often worse prices!
So how are consumers being hurt?
Microsoft had the leading desktop operating system in the 90s that allowed millions of ordinary people to start using computers for the first time, yet their browser bundling was considered problematic.
Bell telephone allowed you to talk to people across town and across the country in real time. People love talking to their far away friends and relatives! But they were simultaneously providing this futuristic service and harming consumers with their anti-competitive practices and monopoly pricing.
It's possible for Amazon to both be providing a great service to you and me and be harming consumers with priority placement of Basics products and even harming competitors by abusing their access to product metrics in deciding what Basics products to make.
No they didn’t?
https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...
> the district court ruled that Microsoft's actions constituted unlawful monopolization under Section 2 of the Sherman Antitrust Act of 1890, and the U.S. Court of Appeals for the D.C. Circuit affirmed most of the district court's judgments.
First Trial:
> On June 7, 2000, the court ordered a breakup of Microsoft as its remedy.[19] According to that judgment, Microsoft would have to be broken into two separate units, one to produce the operating system, and one to produce other software components.
Appeal:
> On November 2, 2001, the DOJ reached an agreement with Microsoft to settle the case. The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who would have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance.[29] However, the DOJ did not require Microsoft to change any of its code nor prevent Microsoft from tying other software with Windows in the future.
If, by “appeal” you mean “settlement negotiated with the new, Microsoft-friendly Administration”, that is correct.
That’s not what “appeal” usually means in a legal context.
More closely: if you take a plea bargain and plead guilty to breaking and entering instead of murder, are you guilty of murder? What if you only agreed to the plea bargain because you didn’t want to spend the millions of dollars to litigate again? This latter hypothetical is the reality of corporate prosecution in America: companies will settle just to avoid tainting their reputation and spending the cash to win on the merits. That doesn’t mean that they’re guilty.
You are suppose to be tried in a public process by an impartial judge and a jury of peers, not making a deal behind closed doors with a prosecutor looking to advance his career.
I agree they should have been penalized (ideally more harshly than they were) for their legendary anticompetitive behavior, I'm just no longer as sure that partitioning the company out into distinct divisions would have been a net gain for the consumer as I used to be, especially against the specific behaviors they were accused of.
How, for example, would breaking up Microsoft into distinct divisions prevent, say, the OS division from enforcing the same anticompetitive requirements on companies licensing the OS?
I also think consumer perception of what's reasonable in an OS has shifted since then. I don't think any of us would argue now, for example, that shipping a desktop OS with no browser installed by default would be a reasonable choice. (Likewise probably a media player.)
Should it be impossible to uninstall? Maybe not, but there's a not-unreasonable argument to be made for preventing someone from winding up in a situation where they have no browser installed at all and can't look up how to fix it. (Having no media player installed is obviously less catastrophic.)
Yes, they absolutely should have been broken up into fragments, if not crushed and handed out to the rest of America for free.
That kind of breakup wouldn't have solved that anti-competitive problem, but it would have solved others (e.g. the Office Team being able to use undocumented OS APIs to get an edge on competitors).
Though, personally I kinda think a breakup of a tech monopoly should be more extreme, for instance by breaking it up by division and splitting some of those divisions further into competitors (e.g. split the OS division in two, each with their own Windows fork to sell, and all the Windows trademarks go to some independent interoperability consortium).
I mean, it might have prevented learning about and using new undocumented APIs going forward, but it would be in none of the newly-broken-up companies' interests to break the existing usage.
> splitting some of those divisions further into competitors
Even that I'm skeptical of - first, because you'd need enforcement to prevent them from simply merging again after a while (glares at Ma Bell breakup companies reforming into a few huge companies which usually deliberately avoid competing in markets), and second, I'm not convinced that deliberately fragmenting Windows into 2 distinct codebases is beneficial for consumers?
Even assuming you could avoid one of the two competitors simply winning the vast majority of the marketshare after one round of OS upgrades, you'd likely end up with mutually incompatible API surfaces, thus breaking one of the main reasons people like Windows - compatibility.
(I still claim, though, that given two initially equal products and equal resources, that one will probably relatively quickly eat the other's lunch. Look at what's happened almost every time a large open source project has had a high-profile fork - look at egcs and gcc, or OpenWRT and LEDE, or libav and ffmpeg.)
So again, how is Amazon hurting consumers?
The impact on consumers is often used as a justification and evidence of that, but it's not usually a requirement. It is assumed that the act of being anticompetitive itself is harmful to consumers as it limits their options.
Everyone does this, it is called competition.
That is why every free market monopoly that has ever existed has passed and we are not living under the thumb of a single all encompassing mega-corporation and the only pseudo-monopolies possible are the ones guaranteed by law in regulations.
but burying alternatives, they basically drive smaller product competitors away, reducing their sales and their ability to grow and innovate.
Amazon has been blatantly copying products that other brand sold, and made them cheaper. Great for consumers if the only thing you care about it price.
Because the game is getting rigged and Amazon products will always be more prominent, no-one can compete with Amazon on these products.
You end up with less competition and less choice. Amazon can just undercut you, push you down in their listings and get the lion's share of any product type they find lucrative.
Certainly not all that bad but where do you imagine this is going if no-one else is able to compete with Amazon?
Amazon is already king and has power of life and death on countless businesses that rely on it being an impartial party so they have a chance to sell their ware.
And yet we saw the rise of independent stores, gentrification, Whole Foods, the rise of e-commerce, the rise of etsy, amazon, ali, ebay, the rise of the Apple Store, the rise of...
And then we saw an explosion of "third party" brands. Millions and millions of alternatives flooded the market despite Walmart "undercutting everyone of their suppliers". From soda to nailclippers, to phone cases to chairs, to spoons, to...everything. Despite all the fear mongering, today there is not a single product category where only one brand exists, there is not a single product category where only the Walmart brand exists.
Competition cannot be stopped, the business cycle cannot be stopped. Birth, growth, death, repeat. Amazon is huge today because Walmart was so huge before it; people actively went out of their way to avoid it just out of spite.
Competition cannot be stopped, except by regulations. Give amazon by law a pen to play in and you are making sure they'll never let anyone else in.
Things never stay as they are, and retail has never been so competitive. Amazon won't be top dog forever, just as Sears wasn't, just as Walmart wasn't. Just as the mighty GE wasn't, or the even mightier East India Co. wasn't.
And?
>And yet we saw the rise of independent stores, gentrification, Whole Foods, the rise of e-commerce, the rise of etsy, amazon, ali, ebay, the rise of the Apple Store
So... Walmart was outcompeted by the Apple Store?
As is the case when you are fighting against other humans, who are crafty, financially-motivated, and are willing to break the law, and may be operating from different jurisdictions where attempting to get the DA to prosecute them or filing a lawsuit against them is ineffective, it's a very difficult battle to fight.
As an example I'd be surprised if Amazon could get China to prosecute a business operating from their country that's selling counterfeits on Amazon. Additionally, it's hard for Amazon to know if a product sold in its marketplace is counterfeit: there's no global API or method to look up if a product is authentic. The best you can do is rely on the trust of the seller. If you want to mitigate your risk, buy products that are only sold by Amazon itself, or name-brand 3rd party sellers who have high reputation (like Belkin for electronics; Apple even lists Belkin products that integrate with theirs on Apple's online store: https://www.apple.com/shop/accessories/all/power-cables?fh=4... ).
People occasionally experience counterfeits, but once reported the seller is typically caught and banned. (But if they're a corporation in another country, and willing to break the law and ToS, they'll reincorporate under another name and try to do it again. Stopping this is difficult.)
Reviews are also a difficult problem to tackle. Amazon decided long ago to allow people to leave reviews without purchases, though reviews from people who purchased the item get an extra "verified purchase" badge. But that doesn't stop the abusers: they "buy" the item under various accounts they've created themselves, give the product a good review, and then return it to their own inventory. Small sellers might get a bunch of friends & family to do this, which would be hard to detect as ToS-violating conspiracy; larger sellers will use sophisticated schemes to create many accounts and identities to do the same thing (or simply pay a network of actual people to do it, such as by asking on Craigslist and similar places), to boost reviews of their own products, or if they're willing to burn cash, buy and negatively-review products of competitors. When done from many names/addresses/credit cards/IP addresses, it requires sophisticated intelligence analysis to detect and stop.
Please consider the attackers that Amazon is actually up against when trying to stop these abusive behaviors before concluding that they don't care. They have multiple hundreds of people working on the problems. They are simply hard problems to solve, because Amazon is fighting against other smart, sophisticated humans who gain financially from their abuse.
Amazon could shut down its marketplace, which accounts for 50% or more of all sales on the store, and only sell products it acquires directly from manufacturers, but that would destroy many businesses who have built themselves up using Amazon as a primary venue to sell their product. Furthermore, it would disallow people who have legitimately acquired the product another way from reselling it--for example, say I buy a pallet of some authentic product from a retail store that's going out of business; shouldn't I be able to resell those products? The law says that I can. If Amazon has a marketplace, shouldn't I be able to resell there? These could be Nike shoes or any name-brand products.
(Sophisticated manufacturers who want to protect their supply chains from 3P reselling will repurchase inventory from retailers who are going out of business; or alternatively provide it to retailers on consignment --meaning Nike owns all the shoes being sold in a retailer's store up until the point where they're sold to a consumer; so upon going out of business the retailer is expected to return the inventory.)
Now you run into tricky situations. I buy a pair of Nike shoes brand new from a retail store and never use them. I decide I don't like their look after all. Should I be able to sell my shoes on Amazon as new at a lower price than Nike does? Yes, you should and you can (though you're unlikely to be selected as the default offer as a new untrusted seller with a single product; unless Nike is one of the companies with brand protection for what may be offered as "new"; though I believe you could still sell as "like new"--I am not an expert on this space).
Some brands were counterfeited so frequently that Amazon has started to offer the ability to limit who can sell trademark-protected items that are only sold by their manufacturers with its Brand Registry: https://brandservices.amazon.com/
I believe the sellers who are accused of fraud or counterfeiting will be asked by Amazon to provide proof of authenticity, such as purchase orders from the manufacturer or other proof of authentic origin, but allowing people to open accounts and sell means they start with a presumption of trust -- creating the possibility that some people will have bad experiences with counterfeiters until they're caught and shut down.
Imagine you're the Amazon engineer responsible for figuring out how to stop people willing to break the law and all of your policies to make profit; then put yourself in an attacker's shoes and imagine all the things you could do to circumvent the best ideas you can come up with for stopping fraudulent reviews and counterfeits. (Assume for the sake of argument that your company is committed to allowing third-parties to sell on the store.)
Allowing anyone to sign up and do business on your platform with minimal friction is great for growing your platform, but it's terrible for growing a trustworthy platform.
The things you bring up are the result of an allow-all policy with a denylist. Deny-all with an allowlist would fix the problem. But of course that costs a lot more to implement, and as long as people still buy stuff on Amazon despite the hassle of dealing with counterfeits, Amazon will continue to fail to fix the problem.
And yet Amazon doesn't even let their customers choose the correct reason for returns when they receive counterfeit items. Instead of being able to choose "This item is a counterfeit" or "I believe this item is a counterfeit", the customer must choose between reasons for their return that aren't entirely accurate, like "Inaccurate website description" or "Item defective or doesn't work".
You'd think that a company that claims it is throwing vast amounts of resources at stopping counterfeiting on their platform would at least try to collect data on the counterfeits their customers receive.
Right.
I have encountered several items with good reviews, but when you read the reviews, they're all talking about a completely different item.
What you're describing is another kind of abuse called Listing Abuse, specifically Variation Abuse. If you encounter Listing Abuse, use the link on the page "Report Incorrect Product Information" [1] and say that the product is experiencing Listing/Variation Abuse, and give a couple examples of reviews that are clearly for unrelated products. It will be investigated, taken down/unlinked from those reviews, and the seller will be punished as appropriate.
("Variations" are products that have different SKUs but are all linked together and share reviews, such as the same product that comes in different colors or patterns or sizes. For example, the Speedo Swim Cap has 20+ color and pattern variations: https://www.amazon.com/Speedo-Silicone-Solid-Swim-Black/dp/B... . Each is actually a distinct product SKU, but since they're all functionally the same, just with different colors or patterns, they have one page and share reviews.)
The fundamental problem that makes Listing Abuse hard to stop is that, if you allow people to sell on your store, that means you allow them to enter their own product information -- which you don't have any way to verify. There's no World Authority for Product Information that you can check against. And not all sellers use Fulfillment-by-Amazon where Amazon holds the inventory; plenty of sellers ship the product themselves, meaning that Amazon never has an opportunity to see or inspect the product. Even if Amazon had a policy requiring new sellers to ship a product to Amazon to inspect, that wouldn't stop malicious sellers from shipping something different to customers.
Sellers have a lot of power to describe the products they're selling that they legitimately need. Unfortunately this means they have the power to list their products as variations of other highly-rated products to falsely make them look like they have a lot of good reviews. This is another one of those problems that is difficult to solve, because you need to give sellers access to describe their products to support legitimate usage patterns, like adding a new variation. (Like Speedo deciding to offer yet another color or pattern beyond their existing 20+).
All that being said, I agree that this should really be one of the easier types of fraud to stop, and don't understand why it's taking so long for the company to shut it down effectively. I think they need to build some machine learning systems that compares product information to review content when new variations are created, to flag likely variation abuse for human review. I also don't understand why variations are not required to all be shown on a single page (which would stop the abuse); there are probably legitimate use-cases that require it.
[1] Here's a link highlighting where it is on the page for the Speedo Swim Cap: https://www.amazon.com/Speedo-Silicone-Solid-Swim-Black/dp/B.... - or just find it by text searching for "Report incorrect".
Amazon Reportedly Pressures Small Businesses with Retaliation if They Don't Hand Over User Data
Meanwhile, Amazon Warehouse was slinging hot garbage and getting constant negative feedbacks (80% positive range) and they never got suspended. Amazon Warehouse even cancelled a massive number of their own negative feedbacks by blaming Amazon Prime for things that had nothing to do with shipping.
We were undercutting Amazon on price for a long time, but in the end we threw in the towel because it was just an impossible marketplace to participate in. Interestingly there was another textbook seller that had a similar experience that got their testimony read to Bezos by Congress.
https://www.theverge.com/21349440/amazon-marketplace-third-p...
This was invented from whole cloth by Robert Bork, Richard Posner, and Aaron Director, at the University of Chicago, as part of a decades-long project and organisation to redraft US antitrust policy. It was devastatingly effective.
It also has little if any basis in the legislative rationale of original antitrust legislation in the US.
It's weird asking "how does killing off the competition hurt consumers?" when literally all economic growth depends upon it.
I’d rather see legislation that focused on both improving worker wage and making it easier for new companies to enter the marketplace and compete with Amazon rather than punishing Amazon for having a store brand or whatever (store brands very often seem to be a good thing for consumers, even if companies don’t like being undercut).
Now they say it is a monopoly is a problem after Walmart managed to become the biggest employer in several states and literally becoming the only option in many areas? Now they cite vague unspecified harms while long ignoring concrete ones and claim the ones with no ability to exclude from the market are too far? That just screams "pretext".
The vast majority of companies are incapable of self regulating because it is contrary to their primary mission of 'maximizing shareholder value'. This generally just means eliminate your competition and then maximizing profit. In the absence of competitive markets, the government often needs to step in at some point.
> This is why it's different between Amazon and Home Depot, they hold different amount of the market, so even if Home Depot wanted to exploit their position, they probably couldn't.
I would say Home Depot has far more control of their markets than Amazon does. Pick any smaller metro, and the only consumer building materials store around is Home Depot or Lowes. The two basically split up all the markets, and if there’s not enough business to sustain both, then there will be just one. But no other store will be able to compete.
If you’re a manufacturer and you can’t convince Home Depot or Lowes to stock your item in their store, then you’re not going to reach 90% of people via in store attention (for home improvement stuff).
Almost all big box store brands have whittled down to two viable options, or even one in the case of Best Buy. Although, I think that might be the natural state of things given how low profit margins are for retail (low single digit percentages).
I can use plugins in a web browser to effectively visit 100 stores to shop for the best price on an item. Amazon is just another vendor.
-edit-
To add to this. If you want to compare to Amazon then you have to look at the market share and revenue of those stores too. Not simply their existence. It doesn't matter if an ACE hardware is in the area if it is 3% of the market.
Sure you could, but is that how most users use the web? According to Statista (2019 - https://www.statista.com/statistics/955796/global-amazon-e-c...) [same link I put before], over 50% of the market is just Amazon, even though it's soooo easy to chose another one.
Since they now have a grip of the majority of the market, they should be having lots of eyes on them, as they can easily abuse their position, which most of us don't want to them to do.
It’s not clear what the point is here.
> According to Statista (2019 - https://www.statista.com/statistics/955796/global-amazon-e-c...) [same link I put before], over 50% of the market is just Amazon, even though it's soooo easy to chose another one.
Could it be that people choose Amazon because despite its faults it provides the best service?
I dislike Amazon and try to avoid them wherever possible, but in practice I probably use them 50% of the time, because in those instances there isn’t a better alternative.
To answer your question - it doesn’t matter. We don’t determine monopolies simply because of market share. If we did, why aren’t we filing another anti-trust investigation against Microsoft and Windows?
The point anyway is that people have no switching cost. Amazon faces stiff competition not just in America but globally. I remain unconvinced that they have a monopoly on e-commerce. Sure they may have take some monopolistic actions which could be addressed, but that’s not enough for me to demonstrate that they are a monopoly.
Frankly, I think Amazon has really been struggling. Prime sucks. 2-day shipping is slipping not just in service but as new competitors enter the market. It’s a fierce competition.
Google and Facebook on the other hand are monopolies. That’s a no-brainer.
Apple I’m not sure how they’ve even been in the discussion.
Remember that Apple and Google pulled a legal app from their stores, regular Apple users (like 50% of US) can't install stuff on their device without Apple parental approval and the "make it a website argument also fails because Apple is does not let you install a better browser".
50% still affects a lot of people, though Apple fanboys will attempt to say is not a big enough number (remember you could install other browsers and whatever application you wanted on Windows without a Microsoft approval or tax).
> Apple and Google pulled a legal app from their stores
I can't sell anything I want at Wal-Mart. Doesn't PayPal not allow porn sites to do business? I don't see how this is different.
> Windows without a Microsoft approval or tax
So is it market share or what? What exactly is the monopoly? Microsoft doesn't allow me to play PlayStation games on Xbox. Most computers are sold with Windows operating systems. I don't know what the monopoly is supposed to be with Apple.
- monopoly, duopoly is not that important, you can have 3 big actors in a market that are cooperating against the users for their own interests, so the market share is irrelevant and the abuse/damage is relevant. Is Apple not allowing say 10 million users to install some app because of political reasons or 50 million users to install a game because some other policy reason? This people were affected , for example Joe did not know when he bought his iPhone that Apple can block his favorite game , or some app , is friend Bob has Android and he side loaded it, Joe is pissed now and feels tricked because on the box it was not printed that Apple can abuse his trust like this.
I'm currently on chrome on my iphone. Maybe you can't install arbitrary browsers, but you can certainly install different ones. And there's always jailbreaking.
I will have to let someone else to continue this since I don't own a iOS device and at work we don't target mobile.
Though I had to fix soem iOS issue sin a third party plugin, it was using some WebGl and it was broken on iOS, so the plugin was using a software(slow and ugly thing) for iOS but then Apple change things so tablets pretend they are desktops and broke the plugin(so from my limited experience iOS browsers are inferior ).
That is a very visible case, but there were other smaller cases , where smaller applications were blocked because they had a link and that link was going to a page and on that page a developer would accept donations and Apple wanted a but from that.
Then you have apps blocked on totalitarian states, an entire nation is affected because they can't side load applications.
Of course not, the final issue is companies becoming monopolies and companies abusing their market positions, that is what we want to prevent, in order to foster innovation and open markets.
> I would say Home Depot has far more control of their markets than Amazon does
Maybe you're right, I know nothing about what's going on on the ground of the US. So if Home Depot do have more control of their market than what Amazon has of the e-commerce market (more than 50%), then they should also be under watch to see what "strategies" they employ to get more profits.
Just because the House is now investigating technology companies doesn't mean that hopefully whatever legislation comes out of this, cannot be applied to other industries.
It depends on what you call the marketplace. Look at the broader "retail" sector
> The eCommerce giant [Amazon] accounted for 3.2 percent of total consumer spending in Q2 (spanning all categories, including retail) and 9 percent of total retail spending... When it comes to consumer spending, Walmart accounts for 3.4 percent overall and 10.2 percent for retail. That’s up from 9.6 percent in Q1 2020.
Walmart has a considerable share.
> so even if Home Depot wanted to exploit their position, they probably couldn't
Do you really think Amazon has more pricing power than Walmart? I'm much more likely to switch online retailers than my brick and mortar store. It's a lot easier to compare prices and switch.
https://www.pymnts.com/news/retail/2020/amazon-and-walmarts-...
The analogy I would use is that e-commerce retail is smart phones in 2008 (maybe a bit later) and the broader retail market includes landlines and feature phones. Even today landlines exist and feature phones are sold. The growth trajectory for e-commerce won’t change and big box retail won’t encounter a meaningful resurgence. Amazon is the second biggest retailer alone as compared with Walmart which primarily makes money on big box store and has a retail presence in name only (if you take just their online sales it’s not meaningful competition). The concern is that the reason Amazon holds such dominance in e-commerce is because it’s really leveraging cross-market dominance. AWS subsidizes their marketplace to be extra competitive, their data on retail has them introducing first-party products that compete with suppliers selling through their platform by focusing on high-margin items.
The better question is whether or not this kind of behavior needs regulation, or needs regulation yet. I’d argue yes having read the story from the diaper.com founder and Bezos’ laughable diversion.
As for ease of switching, I think e-commerce can’t be directly compared as the driving user behaviors are different. I could argue it’s easier with a big box store because I could just drive to a different one, use my CC and move on whereas in e-commerce I have yet another account to manage, I have to make sure I’m not getting scammed, etc.
I wouldn't be so sure about that. I like the convenience of online shopping, but I also like convenience of immediately taking possession and curation. I'm price sensitive of course. I buy most of my electronics from Best Buy. Their prices are almost always the same as Amazon and if they're not its trivial to ask for a price match, which they always do.
Obviously Best Buy or other retailers can't stock everything, but they can stock a lot of the things I want to buy in Electronics. And they leverage Amazon search, ratings and price. They're just more convenient. They have been doing very well over the last decade.
I think people extrapolate too much of the current trends. Physical retail has been around longer than Amazon and will likely be around when Amazon is gone.
There's basically nothing on Amazon that can't be purchased elsewhere online, so to say that the answers to the above questions can change because lots of people choose to buy from Amazon doesn't ring of "protecting the consumer". If anything, the fact that so many people choose to shop there makes me think the consumers have spoken and they like the deal they're getting.
Last time I needed one, I was unable to buy an effective bandage wrap in person, I had to order online. My local Walgreens only had their own house brand "self stick" type that doesn't really stick at all.
Went to buy some wrist braces, again, only their house brand. Many styles of wrist braces exist, they sold one type, the type I didn't want.
For some house brands, such as Costco, they provide a huge competitive force in the marketplace. An example is Costco Diapers, which are rated really well, and basically establish a price at which other "name brands" have to complete. There is a possibility that they are creating a downwards pressure on the price of diapers overall. (Or that they are colluding to ensure prices don't fall too far, huh, never thought of that angle before!)
My local grocery store's brand is generally untrustworthy. I hate it when they are the only option for buying something. The 3 times I have tried their yogurt coated pretzels I have gotten an upset stomach, and I normally have an iron stomach that allows me to eat street food around the world with aplomb.
Funny enough their house brand "sweetened flavored sparking water" is really my preferred brand, so they get it right some of the time.
But from one perspective, isn't this argument hypocritical of us? If I go to a baker, I kinda expect everything in the bakery to be "store brand", and in fact many bakeries been scandalized for not selling their own goods! Heck if I go to my local farmer's market I expect what the farmer sells what they grew, and again if they are just reselling produce, social media scandal!
This entire idea of stores being a "marketplace" for multiple brands is only a recent aberration.
So maybe what are seeing is just things are just slowly returning to a world where everything is "store branded".
Replace marketplace with platform, anyone who calls themselves a platform and competes on the “kill all competitors” level should be regulated as common carrier/public space.
There are numerous ways to identify platforms vs marketplaces and not all of them are related to total market penetration. But I think the legislation should look in that direction, give the FTC the power to declare a company a platform in its space and then allow it to regulate that company in the same way utilities are regulated but obv updated for the internet age.
I think the biggest hinderance to this sorta thing is that all law makers are increasingly biased and refuse to acknowledge their favor. They pretend instead that they are in fact impartial and any appearance to the contrary is simply necessary due to the importance of the issue at hand, or the extremists involved (“I’m really a centrist, they’re just nazis, so I appear to be far left” and vice versa).
I’d like to see how well they would perform on Target/Best Buy shelves, they probably wouldn’t sell at all. Therefore the only origin for their success is an abuse of marketplace ownership, and it has distorted the market, and therefore has harmed consumers by simply reducing quality brand’s ability to scale, by imposing higher shelf costs for the same brand exposure, and therefore fewer sales.
Although it’s not a monopoly — and another law should be drafted against competing on a marketplace you own.
I think the difference is that the playing field is more level. Most stores that I've seen won't make it harder to buy the name-brand version or easier to buy the store-brand version (aside from the store brand often being cheaper). They tend not to really market the store brand, so the name-brand version generally has advertising behind it and is often seen as superior, even when it really isn't. The two versions sit side-by-side on the shelves without preferential placement to either.
Meanwhile, I wouldn't be surprised if Amazon gives preferential treatment in search results to stuff that gives them a better margin, regardless of whether or not it's a better product or a better value.
I don't necessarily agree that they wouldn't sell outside their own store, though. I generally look at the store brand as the usually-cheaper "generic brand". For example, if I'm looking for cold medicine, I'll never buy NyQuil, because the equivalent store brand is more or less the exact same thing and is cheaper. But I don't really care which store brand. If the CVS-branded version somehow ended up in a Walgreens, I'd still buy it. (Obviously CVS would never sell the Walgreens version, but... yeah.)
(Speaking of mom-and-pops, I actually find it annoying when I need cold medicine, walk into my local corner store, and only find NyQuil rather than the generic CVS/Walgreens/whatever store brand. The corner store usually sells NyQuil at an even higher price than the chain pharmacy would, and there's no alternative.)
I don't understand that comparison at all. Do you know what percent of the Target floorspace is Target owned brands? Or Ikea?
Imagine being a store that sells its own product, AND wants to augment their own product with some third party products. Like a sweatshirt company that also throws sunglasses on a rack. They arent really "making" either of these things. In one case they are throwing some branding over a product and having having it manufactured by contract. The other they buy generic wholesale. Because they want to sell both branded and unbranded goods they shouldnt exist? That would shut down nearly every retail business in the country overnight.
Where has the idea of a neutral marketplace ever been realized in brick and mortar America?
> and therefore has harmed consumers by simply reducing quality brand’s ability to scale, by imposing higher shelf costs for the same brand exposure, and therefore fewer sales.
How come brand name items cost more on the brand’s website compared to Walmart’s brands on Walmart’s website? There is no shelf cost online.
What is more likely is this is a simple example of price discrimination or price segmentation. Theoretically, you can earn the most money by selling each item at the maximum price the buyer is willing to pay. But if the buyers all have varying levels of income or willingness to pay, how do you scale this? Obviously, you can't barter with every single person for every $5 bottle of lotion.
What you can do is create various brands, and maybe differentiate the products slightly, or maybe not. Similar to binning with silicon chips where the chips with higher probabilities of performing better and longer get sold for higher.
So Walmart can go to Johnson and Johnson and say hey, you're selling Lubriderm for $5, make me some lotion that's similar or lower in quality (but still acceptable to Walmart), and we'll sell that for $4. Now, J&J get to sell their $5 lotion to people willing to pay $5, and a cheaper line to people wanting to pay less, but they don't have to lose the people paying $5.
And they do this in many, many layers. P&G, Unilever, J&J, and others all have countless brands they use to hit various price points. And the products may be the same, or may be marginally less in quality. And maybe it behooves some people to pay more for the extra assurance of quality.
That seems like it must be true - Going to Lowe's instead of Home Depot takes getting to know a different store layout, and likely at least an extra half hour if you still have to go to HD.
But evidently, by the way people talk about ordering everything from Amazon (despite its numerous problems) and look at you like you have three heads if you talk about going to even say just Target.com, there seems to be some counterintuitive hurdle for switching websites that's actually worse than for physical stores. Perhaps because web widgets are so un-affordanced that figuring out a new one can actually be hard, or that the majority of orders are reorders, or the smaller stakes dopamine feedback from getting what you need while sitting down, or the dark forest feeling makes people extremely conservative. Whatever it is, it exists.
Of course there are also plenty of people who have no problem switching between online stores at the drop of a hat. I'd posit that these people have a model of buying based on manufacturers, viewing the web stores as mere means to some ends, and understand credit card chargeback policies. For example I buy a decent amount of stuff from Zoro (whose descriptions can be lacking), and so I often end up referencing manufacturers' catalogs directly. Which are fantastically informative and easy to read (single PDF, well-specified comparison tables, no middle clicking dozens of search results, no page load lag, no flipping between tabs to spot a minute difference hidden by web chaff, no surveillance, etc), but I'm certainly paying a fixed effort overhead to get to that point.
Whatever the case for such stickiness is, I think one of the best tech reforms possible would be to mandate open APIs. As Amazon (et al) are stores, then their business is selling specific products for specific prices. This data should be openly available such that it can be retrievable by every user agent (no CAPTCHA harassment), and ideally, orders placed through the same system. This would enable price competition as well as UI competition, rather than the two being bundled as they are now.
I think there is truth to this since I personally for a long time would go to Amazon for everything. Over time I have shifted to using them less and less.
However I think it’s just a matter of consumer maturity. Apple Pay has done a lot to make it easier for me to buy from 3rd party websites. There is a lot of money to be made in services to help the rest of the web be more competitive to Amazon. We are just at a certain stage in the cycle.
That’s what concerns me about getting the government involved. These ‘monopolies’ have arisen very quickly - on the order of a decade. Things can change in the marketplace just as fast.
For example, by bundling product sales and web UI, what Amazon (et al) are doing is making it so that customers have to use Amazon's software to shop Amazon (and conversely they're prevented from using software of their own choice). Of course Amazon's software hasn't been designed to benefit the user, but has been designed to benefit Amazon - eg "dark patterns". Hence my call to unbundle the two by mandating API access. A public API is straightforwardly in Amazon's capabilities (it's literally just making a version of their website in a predictable format without all the extra crap), and would tie right into your "services to help the rest of the web be more competitive to Amazon".
Facebook et al are doing the same thing with regards to Metcalfe's law, and a similar remedy would be appropriate.
Not that I think any specific legislation will be anything resembling sensible reforms. Hell, we'll be lucky if it doesn't end up being a boon for big tech.
This is true of almost all online stores and nobody is proposing legislation against it, so it’s not at all clear what you are saying.
Government mandating APIs seems like a fatally destructive move against software freedom forever.
I actually like house brands of stuff, when compared to the thousands of gensym brands. The problem isn't marketplace companies privileging their own brands - it's with singular companies owning the marketplace to begin with.
Humans are creatures of habit, and the way to make it so we aren't in the habit of just buying everything from $Amazon is to replace that with the habit of buying things through non-affiliated aggregators. I'd rather have one familiar UI showing me (Amazon Basics, Zoro Select, HDX, etc), than multiple UIs each showing me the same "competing" gensym brands.
All this focus on fixing particular companies or government mandating software architecture seems like it just gets the government more and more invovled while not doing anything to prevent the actual abuses.
And so any attempt to do that will necessarily "get the government more and more involved". Either through some administrative body that decides whether a certain thing is a "dark pattern", or through judicial remedies ("Here is your 57 cent media credit because Amazon lied about shipping cutoff times. They admit no wrongdoing but promise to never do it again").
Meanwhile mandating APIs isn't mandating "software architecture". It's merely just a different form of the website that has a predictable structure. Amazon could even choose whatever structure they want, as long as it is documented and versioned.
Both approaches aren't mutually exclusive, so I'm not arguing against the former. I just don't hold out hope for it to create meaningful reform - centralized bodies are just as likely to bless abusive practices.
That is software architecture.
Building a P2P or distributed store, not based on a central website, just as an example, would be illegal.
This is just one example of how the future would be encumbered forever based on a 90’s software architecture becoming enshrined in law.
The web as it is today is not some endpoint in software evolution.
A Government mandated API is literally the government regulating software architecture.
That's why I take issue with the word "architecture". If a business has chosen to offer a web storefront, a web API can be supplied right alongside that. There's no need for any "architecture" mandate - the business has chosen the architecture, and the law would mandate accessibility.
Also a P2P/distributed store would itself be defined by an open API, making the issue moot.
There would have to be a lot more than that. Who would govern API quality, what about service levels, how about authentication and sign up? Data formats, etc. Would these all be up to the vendor? What happens when there is a bug in the API?
> That's why I take issue with the word "architecture". If a business has chosen to offer a web storefront, a web API can be supplied right alongside that.
No, see above. It just isn’t that simple.
> There's no need for any "architecture" mandate - the business has chosen the architecture, and the law would mandate accessibility.
Well this isn’t what you said before.
> Also a P2P/distributed store would itself be defined by an open API, making the issue moot.
Not at all. There is no reason at all for distributed store network would need to have an open API. It could operate in terms of user facing pages for people to interact with - or be like a network of chat bots.
You are basing this entire hypothesis on the basis that computer architectures are what you imagine them to be today, which is an invalid assumption.
It seems to me that you are the one who is pulling in details from today, asserting that they must be incorporated into any law, and then pointing out how that's a bad idea.
My lone assumption is a business that provides user-facing software. That's it. With that assumption, I'm arguing for the principle that when a business provides customers a human-targeted "UI", they need to provide a corresponding machine-usable "API" that bypasses the accidental complexity of human interaction. We know there must be a machine-friendly format before the user-friendly format, because the software is itself operating on a machine.
>> the business has chosen the architecture, and the law would mandate accessibility.
> Well this isn’t what you said before.
This is what I said before. Having some type of public API is not "architecture". It's mandating open access to the same thing any front end needs to access anyway.
Authentication and sign up: It's a public API, so this is irrelevant for read access. For ordering, the same exact account system as using the web/app UI. You keep ignoring existing implementations, pretending like what I'm saying would require some huge ground-up design rather than tweaks to what already exists.
Data formats: The company. If a company is big enough to dictate formats, then they're big enough for developers to pay attention to. After the custom of using aggregators for shopping becomes commonplace, it becomes in their own interest to stick with common formats rather than get left behind.
Bugs: The company, while leaving the old "buggy" version in place for some period of time.
In general, you seem to be succumbing to the programmers-don't-understand-the-law trap whereby you're imagining that any such law would be useless since a company could just deliberately create an unusable API. But courts see right through those type of "bad faith" approaches.
You say this but then go on to pull in far more detail from today than I have...
> My lone assumption is a business that provides user-facing software. That's it. With that assumption, I'm arguing for the principle that when a business provides customers a human-targeted "UI", they need to provide a corresponding machine-usable "API" that bypasses the accidental complexity of human interaction. We know there must be a machine-friendly format before the user-friendly format, because the software is itself operating on a machine.
False. Actual machine friendly formats are not the same as the data structures that power UIs.
>> the business has chosen the architecture, and the law would mandate accessibility. > Well this isn’t what you said before. >This is what I said before. Having some type of public API is not "architecture". It's mandating open access to the same thing any front end needs to access anyway.
As already stated, the front end is not the same thing as an api suitable for clients. Maintaining a stable API is quite different from building a front-end site.
> Authentication and sign up: It's a public API, so this is irrelevant for read access.
Is it? Front ends often require sign up for read access. Why wouldn’t an API?
> For ordering, the same exact account system as using the web/app UI.
Wait - I thought your idea was architecture neutral. Why are you talking about the web ui?
> You keep ignoring existing implementations, pretending like what I'm saying would require some huge ground-up design rather than tweaks to what already exists.
Ahh, so this is just about how things are built today with minor tweaks.
> Data formats: The company. If a company is big enough to dictate formats, then they're big enough for developers to pay attention to.
Ok, so your law requires people to dictate formats?
> After the custom of using aggregators for shopping becomes commonplace, it becomes in their own interest to stick with common formats rather than get left behind.
Aggregators owned by whom? Google, Facebook, Amazon?
> Bugs: The company, while leaving the old "buggy" version in place for some period of time.
Seems like you have just introduced an architectural requirement to be able to run old versions in parallel with new ones. Who determines the person of time?
> you're imagining that any such law would be useless since a company could just deliberately create an unusable API. But courts see right through those type of "bad faith" approaches.
You are the only one talking about bad faith. I’m simply pointing out that supporting API clients requires architecture that is different from only supporting UI visitors.
If you are iterating on the UI frequently, and changing the structures that supports that UI, the by definition you don’t have a stable API unless you engineer one separately. No bad faith needed.
I'm referencing details that today's businesses are already operating with. I'm not proposing them to be part of the law, but analyzing how a generally abstract law would be applied to today's implementations.
> Actual machine friendly formats are not the same as the data structures that power UIs.
You're right. I tried to simplify by leaving off the network, and that was a mistake. It is true, a business offering in-person user-facing software would have to design a protocol to get the data out of memory (ie a security boundary). But when a business offers the software over a communications network, such serialization formats are already a requirement. So I do have a second assumption of a communications network.
> Front ends often require sign up for read access
I have yet to see a popular consumer store that requires a signin to browse products.
> Wait - I thought your idea was architecture neutral. Why are you talking about the web ui?
Because we're still talking about businesses who have chosen to make their software available over the web. That is complexity that they've chosen.
> Aggregators owned by whom? Google, Facebook, Amazon?
Whomever, at your own individual choice, as they're not bound by network effects of selling products as well. I'd personally choose a local client from the apt repository or nixpkgs.
> If you are iterating on the UI frequently, and changing the structures that supports that UI, the by definition you don’t have a stable API
So you're telling me that the back end engineers at Amazon just make whatever changes they feel like, remove the old version, and the front end engineers just deal? Or when the front end engineers want some additional data, they simply edit the backend code and deploy it directly?
In reality, there is versioning and change control going on internal to any large company. But once again you're blindfolding yourself to the common structure and customs that already exist, only to throw your hands up.
I really don't see how we can productively continue this conversation, as you keep superficially dragging in orthogonal complexity and then point outing how complex it is, rather than focusing on my proposal as stated.
FWIW, look at the EU's mandate for a common charging connector that both avoided locking in one implementation forever, while leveraging modern industry consensus to provide a massive market benefit.
No - they work as a team and make changes together without any regard for the needs of API consumers outside their company.
This is exactly the point.
Front and back end teams work together to make changes and don’t have to maintain a stable API for any other consumers.
> look at the EU's mandate for a common charging connector that both avoided locking in one implementation
If I was interviewing someone for a technical role and they told me that APIs were like charging connectors, I would say ‘no hire’, and complain to the recruiter.
> you keep superficially dragging in orthogonal complexity
It’s not orthogonal.
Your argument seems to be that supporting external API clients in addition to an in-house UI imposes no burden on someone’s architecture.
This is patently false.
If you could accept that there are architectural constraints imposed by your demand, then it would be possible to reason about them, but simply denying them leads nowhere.
So you agree that they already have to maintain stable APIs for each other? Meaning the mandate would be just adding a requirement for external visibility into the existing internal process, not anything significantly different from what they're already doing.
> If I was interviewing someone for a technical role and they told me that APIs were like charging connectors, I would say ‘no hire’, and complain to the recruiter.
So are you closed minded to analogies in general, don't appreciate that the physical layer has its own complexity, or what? The same type of arguments you're making were also levied at micro USB, by companies trying to keep their bespoke proprietary connectors so they could charge $50 for a spare phone charger. In the end they lost and the market benefited.
> Your argument seems to be that supporting external API clients in addition to an in-house UI imposes no burden
I agree there's a "burden". It's a small burden. One easy bound on this burden is that it is much less effort than developing a mobile app or another whole website specifically for mobile users. And most companies have eagerly done both.
> If you could accept that there are architectural constraints imposed by your demand
You keep using this word architecture. The current de facto deliverable includes XML or JSON documents. The deliverable for the mandate would be differently-formatted XML or JSON documents. Calling a second formatting an "architectural constraint" is a stretch.
Not if the different website becomes hard to find because first pages of Google's search results are sold to better bidders.
if somebody paid for rank, the FTC requires them to disclose the sponsorship.
These are almost all 'control brands'; similar or identical products from the same suppliers, but they don't have marketing spend allocated to them. The delta in sales between the control brands and the 'brand-name' ones allows you to calculate goodwill.
https://blog.softwareag.com/in-future-retailers-may-be-missi...
Amazon doesn't do shit with marketplace inventory. Sellers are either stocking it themselves, or they are explicitly paying amazon to hold it in their inventory.
The difference matters because retail stores always have an incentive to sell the things they stock. Even pure consignment stores will refuse to consign items that they don't think they can sell. Amazon has zero incentive to sell marketplace merchant stock, as they bear zero cost to not sell it. So anytime they start to compete against their merchants, they can effectively hide competitors listings in a back room out of sight and never have to deal with the consequences of doing so.
Depends on how you define “marketplace”. Costco/Walmart/Best Buy/Target/Home Depot/Lowe’s/grocery stores all sell their own brands next to competing brands in their stores.
Is their one store the marketplace? It takes considerably more effort to go to a different store than going to a different website.