Amazon’s Antitrust Paradox (2017)

https://www.yalelawjournal.org/note/amazons-antitrust-paradox

by diggernet • 7 years ago

67 25 7 years ago

The Note closes by considering two potential regimes for addressing Amazon’s power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.

The common carrier approach always seemed like the most rational way to address problems like this. One of the ways companies like Amazon dominate markets is by offering the best products/services. I don’t think there’s an effective way to regulate that away. But if they’re forced to offer their services as common carriers, then the risks of them actually monopolizing their position is greatly reduced.

Nasrudith3• 7 years ago

Really I think if anyone should be forced into common carrier behavior it should be the financial system because of their involvement in payment transfers and power of abuse in cutting off avenues of donation and payment.

While Amazon's infastructure is neat and useful curation is still a valid task which is incompatible with a common carrier status and would be appropriative as it would raise serious questions if they could remove listers for anything not illegal. Like say "autism cures" involving bleach enemas or a guide to engaging in pedophilia. Not to mention functional integral aspects like search ranking would be a matter of "fairness" instead of trying to serve the customer or the company. I can see no way that a forced common carrier on Amazon will be anything but a disaster.

tracker13• 7 years ago

Absolutely agreed on financial institutions and common carrier services.

tracker13• 7 years ago

Except as it stands, they're both a market and a seller directly. Similar to Facebook is both a platform and a publisher.

The problem is that a lot of the time the rules are in stark contrast depending on which you are. In the Amazon case, I think product commingling, without distinct labeling is a significant muddy water scenario.

urs2102• 7 years ago

Great piece! For reference, here’s the comment thread the first time posted: https://news.ycombinator.com/item?id=13562968

remarkEon• 7 years ago

That was a weird trip back in time.

Really curious how people feel today, especially in the light of potential anti-trust action against Google.

ikeboy2• 7 years ago

Amazon needs to be broken up. Marketplace should be distinct from Amazon retail. They can compete on the independent platform like anyone else.

throwayEngineer• 7 years ago

I find it odd people call Apple, and Amazon a monopoly, when it's very easy to not use Apple and Amazon is inferior to Walmart Online.

I don't have a reason to use either company outside obscure niche circumstances.

nine_k• 7 years ago

One such niche is buying books.

chumali• 7 years ago

Neither are perfect monopolies, however to deny that they wield significant monopoly power is patently absurd.

Monopoly power is not simply an issue of consumer choice - there are considerations around prices, coercion, competitive barriers and other outcomes, not just for consumers, but for competitors, suppliers, workers, investors, citizens, etc.

simonh2• 7 years ago

Right, so Microsoft holding a near-monopoly on desktop operating systems was not found to be illegal, but leveraging that power in anti-competitive ways was. Similarly Amazon doesn't have to control a monopoly on online retail, web service hosting, etc. It just has to be found to use it's dominance in illegal ways and it's not clear to me that it has done so. Similarly with Apple.

One nuance I'm not clear on is power gained through the monopoly ownership of a proprietary technology. So for example Apple was able to exert considerable influence over AT&T and later get unprecedented concessions from carriers in order for them to support the iPhone. Arguably their power over the App Store gives them similar leverage. But is that anti-competitive if it simply flows from the superiority of their proprietary software? Arguably no, it's entirely fair enough. They are not using dominance of the market, but legitimately exploiting their ownership of their platform. But couldn't Microsoft have used the same argument for Windows?

I'm genuinely conflicted on this. Simply gaining advantage by being 'better' can't be enough to be illegal surely? That would create truly bizarre and user-hostile incentives. However when you gain a monopoly position and then exert that power, it becomes anti-competitive. How do we tell when a company crosses the threshold? Nobody in 1997-2010 could argue Apple had monopoly power in the phone market and it had almost exactly the same policies back then. Now maybe it does hold some form of monopoly or at least market dominating power, but applies basically the same policies, so is that now illegal? Maybe policies appropriate for a smaller player can be inappropriate beyond a certain scale.

That might be true, I'm willing to accept that. As a customer in 1998 I chose to by an iPhone and accepted Apple's controls over the platform as beneficial, but a new purchaser now might feel compelled to do so due to Apple's dominance of the App ecosystem and resent the locked down nature of the system. That person might legitimately cry foul and maybe have an honest grievance. How does that work? How are Apple supposed to know that their existing, standing policies have now become a violation of the law where previously they were not? It genuinely perplexes me.

hrktb• 7 years ago

First line of the abstract:

Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.

I haven't read it all, but think it's the basically the same paper than I saw earlier last year, and it was very good. It's a deep discussion of why the way we think today about monopoly and antirust laws has been abused, and aren't functioning anymore in this day and age. "There's other companies" is not nearly enough.

I really recommend it, it's long but a worthwhile read.

partiallypro• 7 years ago

Amazon definitely has a monopoly on audiobooks and ebooks.

tracker13• 7 years ago

You don't have to be a complete monopoly to fall into anti-trust abuse. Amazon has absolutely abused their market position against quite a number of mfg's.

zombiemeat• 7 years ago

When I worked at Amazon I was required to take legal training on the used of the words 'market', 'marketplace', 'market segment', and how to frame speech about Amazon's relationship with competitors. I was an individual contributor programmer. I always wondered how much of that training was really about CYA and how much was indoctrination.

Amazon’s Antitrust Paradox (2017)

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