The person you are responding to was saying that dropshippers are being eaten because the products they are selling lack innovation.

For example, Amazon cannot swoop in and sell a cheaper Amazon Basics version of a product to which you own a critical patent.

I'm aware.

They are really saying, though, that without barriers to entry and in a competitive market, players that don't innovate don't survive.

The problem with that is that this is not a competitive market, so the player that wins is not innovating, they just have market power because of their size.

But that is definitionly winning the competitive market. Amazon has a competitive advantage because they have the largest inventory and almost always the cheapest prices, or at least speedy delivery for a marginally increased cost.

That is the definition of winning a competitive market. The consumers win.

The FTC is arguing that Amazon is actually raising prices, so no, consumers don't win.

You don't need to have lower prices long term if you control the market.

But if you raise the products now you have the opportunity for others to re-enter the market since there is arbitrage room.

I get the argument, but it's a grim reaper strategy taught in econ 101. It's a well known strategy and completely valid.

Consumers win in the short term but lose in the long term. Except they can just consume different products or wait for someone to re-enter the market.

But they do, right? At the very least they turn a blind eye to the countless counterfeiters.