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A comment on California sues Amazon for preventing 3rd-party sellers being cheaper elsewhere. Parent comment
They use the ad money to give five percent cash back on purchases.
Manufacturer advertises "effectively pay 5% more on our web site or Amazon will club a baby seal (or worse)!"
The advertising campaign falls flat.
Consumers are killed/maimed by a counterfeit item they bought on Amazon.
Manufacturer costs go up 10% (spent on lawyers and training customer support as emergency response workers).
Amazon begins production of a higher-margin, but less expensive and non-deadly knock off, and promotes it above the original product.
Repeat.
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They use the ad money to give five percent cash back on purchases.
Manufacturer advertises "effectively pay 5% more on our web site or Amazon will club a baby seal (or worse)!"
The advertising campaign falls flat.
Consumers are killed/maimed by a counterfeit item they bought on Amazon.
Manufacturer costs go up 10% (spent on lawyers and training customer support as emergency response workers).
Amazon begins production of a higher-margin, but less expensive and non-deadly knock off, and promotes it above the original product.
Repeat.