Amazon May Have Misled Congress, House Judiciary Chair Says

https://www.bloomberg.com/news/articles/2020-04-23/amazon-may-have-misled-congress-house-judiciary-chair-says

by JumpCrisscross • 6 years ago

126 56 6 years ago

bloomberg.com

youeseh• 6 years ago

Are anti-trust laws strong enough / enforced to prevent market operators from competing with vendors?

Why should Amazon be penalized when Costco, Target, Safeway etc.. get a pass?

guyzero• 6 years ago

The issue is lying to Congress about it when asked.

munk-a• 6 years ago

Amazon does need to be broken up anyways though - remember when the feds went after microsoft aggressively and they weren't nearly at the scale Amazon is in terms of being a business requirement.

We need to get another Teddy in sometime to really go whole-hog on corporate breakups and undo a lot of really questionable mergers that have been approved.

forgot_old_user• 6 years ago

Never thought of it this way! Almost every produce I buy at target has a target brand (knock off?) version like MarketPantry or Good&Gather

dellinspiron• 6 years ago

The US government is wholly unprepared to deal with the wicked smart ingenuity of modern corporations. These inquisitions by congress feel like little children running around picking up sticks after a house has burned down. Give up, you've already lost.

basch3• 6 years ago

It can also be a mark of quality. Kirkland goes around, finds good products, and whitelabels them. You can trust Costco to stand by things they put their name over. Target is the same. Their own brands are a mark of exceeding a minimum quality threshold.

esturk• 6 years ago

It's different when you are effectively a monopoly. EU fined Google for using it's search market size to promote sales of a certain product.

The fine isn't because of the promotion. It's because of the implication of what the Monopoly is doing.

Amazon is in the same boat here if the EU takes a look at this.

lukeschlather• 6 years ago

If Amazon is effectively a monopoly, so are Walmart, Costco, Target, and some others.

tathougies• 6 years ago

Yeah... I'm not sure Amazon is a monopoly here. Costco and Walmart both have great online shopping experiences.

jwagenet• 6 years ago

I think the clear issue is Amazon positioning their products over others in search and promotion rather than letting the products appear based on their own merit. Brick and Mortar white label brands are typically displayed side by side with name brands and usually name brands pay for promotional displays.

I don't really understand the kerfuffle over Amazon making white label basics. These brands know their product is easily copied. Obviously Costco, Target, or anyone else would look at the top X products in a category and develop the best white label product in either price and/or quality, why not Amazon?

cwhiz3• 6 years ago

People in the US seem to have a fundamental misunderstanding on what constitutes a monopoly. I have seen numerous people say that Apple is a monopoly despite having less than 20% market share.

Amazon isn't anywhere near a monopoly. There are many HUGE competitors in the retail and online retail space. Walmart, Costco, Shopify, Target, Best Buy, Newegg, Home Depot, Lowes, Macy's, Staples, Alibaba, CVS, and dozens more.

guerrilla• 6 years ago

Few of those are in the same market as Amazon. It's not strictly about market share but dominance, however a market share of 50% defaults to a judgement of dominant. Amazon is projected to attain that 50% share in retail e-commerce in 2021. They're currently at about 47-49%. Amazon is exactly a monopoly and people know it.

https://www.statista.com/statistics/788109/amazon-retail-mar...

elliekelly• 6 years ago

People seem to have a fundamental misunderstanding of what antitrust enforcement in the US entails. The DOJ isn’t limited to bringing actions only against monopolies. The Sherman Act also prohibits conduct that attempts to monopolize a market.

basch3• 6 years ago

The argument isnt that they are a monopoly, its that they are either violating antitrust law, or antitrust law is currently unsuited to handle what amazon is doing. People just mistakenly use the word monopoly to mean antitrust or anticompetitive. It's also less about amazon just being an ecommerce box store, and more about having captured aspects of horizontal and vertical integration across many markets.

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

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.

Amazon is Microsoft, Sony, Visa, Fedex/UPS, Disney, GAP, and Walmart rolled into one.

Nasrudith3• 6 years ago

Monopoly has been downright abused as a term via propaganda pushes to mean "big and I don't like it".

feyman_r3• 6 years ago

Costco, Target and Safeway have to pay to maintain inventory in their stores, and thus have 'skin in the game'. Amazon can merely 'watch' what sells, and copy.

AFAIK, brick-mortar stores have to buy products; they don't get it for free. If they banked on sales of product A that they thought they could make a generic brand out of, and it didn't work, it cost them some money and real-estate. H

However, Amazon just has to watch people's 'browsing history' without paying a dime to the seller. If the product sells well, its good. If not, no loss of any kind for Amazon. Its a win-win for them (alone).

scribu• 6 years ago

Amazon also has to purchase whitelabeled products and then sell them as their own brand, incurring the same kind of inventory risk.

jt2190• 6 years ago

Costco, Target and Safeway have to pay to maintain inventory in their stores, and thus have 'skin in the game'.

Can you clarify this? No major retailer pays up front for inventory. They do pay rent and other overhead though. Is this markedly different than Amazon?

treebornfrog• 6 years ago

Am I missing something here?

Their business model is based on high scale, lower cost vs traditional brick and mortar, amazon can iterate quicker.

Amazon does have some skin in the game, they still have to stock the items which are FBA (fulfilled by amazon), so they are taking risk there.

wpietri4• 6 years ago

Well personally, I'd like to see those other folks penalized as well. There's plenty of money to be made running markets; there's plenty to be made competing in them. Having both isn't necessary.

But the important distinction here is market share. Amazon has circa half of e-commerce. So Amazon especially should have to pick a lane and stay in it.

dnissley• 6 years ago

How do you allow for generics? I personally love generic brands like AmazonBasics and Target's Up&Up because they save me a decent chunk of time and money.

justaguyhere• 6 years ago

So Amazon especially should have to pick a lane and stay in it

should have - why? who is going to go after them? If the risk of doing something shady is pretty small but the reward is huge, why wouldn't Amazon do it? Banks do shady stuff all the time, fully knowing the punishment if caught is usually laughably small fine - which they'd pay and keep doing shady stuff.

If the system is rigged (or not strong enough), players will take advantage of it, that is inevitable

Nasrudith3• 6 years ago

That sounds like the opposite of what antitrust laws are for anyway - promoting competition instead of preventing it.

bonestamp22• 6 years ago

The only exception I can think of is Walmart, where they've moved to a model in many categories where they only have one competitor to their store brand.

crazygringo• 6 years ago

“We strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch,” a company spokesperson said in a statement.

So employees can use non-public, aggregate seller data? Or non-public manufacturer data?

Yeah. The "seller-specific" part makes the statement meaningless.

huy-nguyen• 6 years ago

The distinction between aggregated and non-aggregated data is moot. From the WSJ article:

Some executives had access to data containing proprietary information that they used to research bestselling items they might want to compete against, including on individual sellers on Amazon’s website. If access was restricted, managers sometimes would ask an Amazon business analyst to create reports featuring the information, according to former workers, including one who called the practice “going over the fence.” In other cases, supposedly aggregated data was derived exclusively or almost entirely from one seller, former employees said.
Amazon draws a distinction between the data of an individual third-party seller and what it calls aggregated data, which it defines as the data of products with two or more sellers. Because of the size of Amazon’s marketplace, most products have many sellers. Viewing the data of a product with a number of sellers wouldn’t give it insight into proprietary seller information because the figures would show lots of different seller behavior.
Amazon said that if there is only one seller of an item, and Amazon is selling returned or damaged versions of that item through its Amazon Warehouse Deals clearance account, Amazon considers that “aggregate” data—and hence is permissible for its employees to review.

thoraway1010• 6 years ago

It's not moot at all.

Uber employees (and some cities) can get access to aggregated data showing where uber is driving.

The same employees should not be able to have access to where YOU are driving (rider specific).

This is particularly key for sellers with a unique product. Chairs are selling well? No problem. But detailed transaction detail for a specific seller and product and their decisions there - a problem.

bonestamp22• 6 years ago

Not to mention, they could simply subcontract the new private label product recommendation work to a consulting company and provide the data to them. Then, an "employee" wouldn't be using seller-specific data (a contractor would).

ABeeSea• 6 years ago

You’re telling me employees who are compensated based on relative performance and have access to a massive central data warehouse wrote queries that went against something buried in a policy document? Shocked, shocked I say.

cies• 6 years ago

May have misled

...and sure have plausible deniability set up!

mikejulietbravo• 6 years ago

It's ridiculous to me that the assumption would ever be that a company would not exploit data it has. Oh, there's clearly a market for this product, we know its price, and we know all of the competitors' pricing?

It could be an argument that you should not be able to operate as a marketplace and a producer of the goods your marketplace enables buying and selling of, but this would mess with a lot of things - particularly in tech.

Nasrudith3• 6 years ago

I see a lot of furious arguing and talking points about domains as "should be separate" but no real answers as to what harm it would prevent or even precedents of it ever working "the way it should". It seems more like a religious dogma at this point than anything as instead of answers or logic you just get increasingly furious repeated assertions.

sneak• 6 years ago

Surely this will begin a criminal investigation into the richest man in the world, the US being a country with equal application of the laws to all.

People in sports that compete at a high level are shamed and ridiculed for being unsporting. There is no honor in winning at all costs; glory only comes from winning a fair fight. Not so when it comes to business pursuits! Many of the largest companies actively engage in anticompetetive behaviors, trying to engineer the most unfair fight possible, as if their additional billions are at that point in any way an accolade or achievement. Is it simple unrestrained greed and lust for power that makes them seek an unfair fight? This isn't rhetoric, I'm actually asking this question and would like answers.

This is a mentality and mindset that I think I may never understand.

Why cheat when you can compete directly, and actually be proud of your accomplishments?

LatteLazy2• 6 years ago

If your product is actually new, patent it. If its actually better quality, trade mark it. If its that complicated to make, use trade secrets.

But if its not, you don't get to own the market just because you got there first. Otherwise the only cars allowed would be Ford and we'd all be eating hydrox cookies and wearing Wellington boots.

nexuist• 6 years ago

What Amazon is doing is more akin to your landlord breaking into your apartment and using source code they found on your flash drives to build new applications.

Yes, your landlord owns the building you live in, but they promise not to go through your door as long as you pay rent. Similarly, yes, Amazon owns the platform you sell stuff on, but they publicly promise not to use your sales against you. It's not fair competition if one of your competitors can view all of your sales and related metadata while you can't view any of theirs.

LatteLazy2• 6 years ago

It's not fair competition if one of your competitors can view all of your sales and related metadata while you can't view any of theirs.

Why not?

I can get a pretty good idea of my competitors sales figures just by reading their accounts if they are public companies. I can get a good estimate of the sales if they use amazon by using reviews as a proxy for sales numbers. Amazon are doing nothing that retailers have not done for 100s of years. Walmart were pulling the same thing when amazing was a twinkle in Jeff B's eye.

Also, sorry to be a dick but... "fair" is a very hard arguement for you to make.

Fair is entirely subjective. And fair isn't actually what markets are about (markets are meant to be efficient companies are meant to be profitable, industries are meant to be productive). If you think this behaviour is a bad thing, you sort of have to explain why it's harming innovation or making markets inefficient or some other way it hurts consumers. Companies aren't people, and even people don't have to be "fair"...

Personally, as I said above, companies already have a lot (maybe too much) control of interlectual property. If you are inovating, you have nothing to fear from people copying you. If you're not inovating then you don't get a monopoly just because you really really like making easy profits and gouging consumers.

dang• 6 years ago

Massive related thread from yesterday: https://news.ycombinator.com/item?id=22956182

cactus2093• 6 years ago

I have a really hard time understanding what the problem is, even if Amazon is prioritizing themselves over the sellers.

Who are the losers? Is it the brands & manufacturers that are losing sales to Amazon Basics brand items? I don't really see how this is different than the way any type of commerce works. If their brand is not differentiated and valuable to people, it won't outsell competitors. For brands that are differentiated, it doesn't seem like a problem at all. I can still easily buy an iPad or Surface Pro on Amazon even though they constantly promote their Fire Tablets to me.

Where I get the most value from Amazon Basics is for things like usb cables or batteries - undifferentiated products where the brand is meaningless because there are a dozen versions of the same cheap crap labeled under different brand names. I really, really don't care if some of those brands go out of business.

Is it a slippery slope argument? What if Amazon eventually stops just putting the Fire Tablet banner at the top but stops showing any iPads altogether, and I can only buy the Fire tablet? I don't really care about that either, I would buy it from a different retailer.

Is the argument that it hurts the middlemen suppliers of these other brands? In the last 5 or 10 years, there has apparently been a big market that has developed for people to drive around to big box stores and buy stuff to resell on Amazon. It's hard to argue that these business are anything other than workarounds for inefficient distribution, I don't really care if the underlying distribution is improved and they're no longer necessary.

Basically, what is even one practical thing I should care about with regards to this issue?

feyman_r3• 6 years ago

>> Basically, what is even one practical thing I should care about with regards to this issue? >> I really, really don't care if some of those brands go out of business.

There is an immediate positive impact to the consumer, that you're getting a good, cheap thing possible from a well-known brand on their own site - Amazon. However, there are second-order effects to this.

How did those dozen-version-products actually come into being? Amazon didn't discover in the beginning that, usb cables were high-demand products. Those no-name-brands 'seeded' that idea. Amazon noticed that there was demand and supply for something that they could easily scale; they discovered it without being in the usb-cable-selling-business. Going forward, those no-name-brands could either:

- not risk coming up with such products (dont think this will happen, but bad for consumer) - move away from Amazon (they could, but at a huge loss of eyeballs) - continue operating at lower margins by making cheaper products (bad for consumer) - compete amongst themselves for being the Amazon producer for rebranded product. (all your products are now mine)

>> but stops showing any iPads altogether, and I can only buy the Fire tablet? I don't really care about that either, I would buy it from a different retailer.

You are comparing 2 known big giants (Amazon, Apple) in your example. What if it was an unknown company that didn't have the budget to get ad space on your Search results for 'best tablet'. (reviewers would look at amazon for 'best tablets', those perpetuating the best-tablet-cycle)?

I guess my point is - if a single company 'runs' a marketplace, and wants to win top products on it as well, its not a marketplace, its a casino from the sellers POV - the house always wins. The game is skewed.

You, as, the consumer (and spectator in the casino), will, I guess, win?

Amazon May Have Misled Congress, House Judiciary Chair Says

Related Stories