Amazon poaching Federal Trade Commission officials ahead of antitrust lawsuit

https://nypost.com/2023/06/29/amazon-poaching-ftc-officials-ahead-of-antitrust-lawsuit/

by mikece • 3 years ago

70 11 3 years ago

nypost.com

lockhouse• 3 years ago

What exactly does Amazon have a monopoly in?

Online shopping? Nope - Walmart, Target, Overstock, and thousands of others.

Cloud hosting? Nope - Microsoft, Google, Oracle, IBM, Digital Ocean, and several others.

Smart Speakers? Nope - Google, Apple, Sonos, and several others.

6D794163636F756• 3 years ago

These laws typically target anti-consumer practices, not the actual existence of a monopoly

olliej2• 3 years ago

Yeah, it obviously doesn't help that colloquially antitrust is interpreted as "monopoly" and people think the law would require an absolute monopoly.

I see the downvotes to the original question, but I'm not too bothered by the question itself as I think it's reasonable given a general person's understanding. Similarly the belief that antitrust only applies to consumer prices being raised rather than supplier prices being forced down.

olliej2• 3 years ago

A few of points. The first is “competitors existing” and “practical competitors” existing are not the same, and that is relevant in antitrust law. Imagine a hypothetical world where there was one corner store, and there was Amazon. In said extreme world there is a “competitor”, but in practice there isn’t.

The obvious counter “create new stores” runs into the next issue: Amazon could use its clout to prevent or limit creation of new competitors - there are many ways to do this (see MS monopoly case) - like requiring suppliers to prefer it over other parties, conditioning prices for some goods on discounts on others (“windows is the default/only install on all your machines or we will charge you a higher price for it”)

Then there’s using funds from one place you have significant dominance to to undercut (including running at a loss) in the new industry - I’m much iffier on exactly at what point this becomes uncompetitive as it seems a fairly common thing for many companies to do.

The important thing to note in the above is specifically pricing related, it’s about using market power to control the ability of competitors to actually compete (how can you compete if Amazon has ensure the best price you can ever get for any product is >= to the price they get)

Now it’s also important to realize antitrust regulation is not about producing the cheapest product for the end user/consumer, it’s about ensuring a fair market.

IIRC the Sherman act did not touch on consumer pricing, but rather producer prices: standard oil had a functional monopoly on the market so would tell people who found oil what they would get, regardless of the amount, value, or final sale price of the oil. So consumers may have been getting “cheaper” goods, but the people selling oil were getting screwed.

That’s where I’m going to guess antitrust is going to be targeting Amazon - just based all the stories over the last few years of them screwing third party sellers - for such sellers they _could_ sell directly (and many do) but if you aren’t on Amazon you essentially don’t exist, then Amazon has been found to duplicate successful products and sell them cheaper than the original product. I have no idea how prevalent that behavior is, but that sounds awfully like the kind of thing that would be subject to antitrust concerns.

Osiris• 3 years ago

People still haven’t learned the lessons of Standard Oil. There were other places to get gas but they could use their wealth to undercut pricing until the other guy went out of business, or just buy them outright, or get gas at better deals, etc. They used strong arm tactics to prevent any meaningful competition.

Arialonomus• 3 years ago

Then there’s using funds from one place you have significant dominance to to undercut (including running at a loss) in the new industry - I’m much iffier on exactly at what point this becomes uncompetitive as it seems a fairly common thing for many companies to do.

I think the distinguishing factor in something like this would be beyond running at a loss, but doing so in a way that would be no way sustainable unless you had massive cash reserves or income streams from your other business verticals—-which you allude to.

Most businesses operate at a loss initially, and sometimes competitive pricing is a part of that, but you typically can’t price your services far far below market rate and not quickly go out of business unless you just have insane amounts of seed funding or you’re abusing your market power as a large corporation.

Of all the qualifiers you listed, though, I’d agree it’s definitely the one with the biggest gradient between competitive and anti-competitive practices.

SkyPuncher• 3 years ago

Monopoly is the colloquial term, but this is actually anti-trust.

A trust does not require domination of a single market. Antitrust laws focus on companies who use their position to limit competition.

My opinion:

* Monopolies tend to focus dominating a single market to raise rates. Google essentially has a monopoly on the search advertising business.

* Trusts tend to utilize there wide-spread reach to drive down rates in non-core markets in order to server their primary market. Amazon demonstrates trust-like patterns through their bundling of unrelated services with Prime.

haburka• 3 years ago

Insane that this is legal and that professionals can be so easily bought. You would think there would be some kind of legal protection or incentive to not have watchdogs hired by potentially criminal businesses. I’m sure Amazon is at least 5xing their government salaries, so I understand the government simply can’t compete with that, but it’s a real huge flaw in our democracy that we underpay those that defend us from corporations.

fwlr2• 3 years ago

The article notes that many believe a large contributing factor is the unpopularity of new head of the FTC, Lina Khan. I don’t know how much credence to give these claims directly, but when terms like “abusive” get thrown around to describe her leadership style it is easy to believe that her leadership is unpopular with at least a subset of FTC employees. Well before being appointed to the FTC, Lina Khan was making a name for herself in targeting Amazon for anti-trust measures - it’s widely accepted that she was in fact appointed in order to carry out anti-trust lawsuits against Amazon.

So you have this situation where some people in the FTC believe the new chairperson wants to target Amazon, was appointed in order to target Amazon, and have reportedly witnessed the new chairperson being dogmatically intent on targeting Amazon even to the detriment of the culture and cohesion at the organization. It might be they feel their job has changed from “defending the public from corporations” to “attacking corporations, specifically Amazon”, and they don’t like that. (I am sure they are also being paid more at Amazon as well.)

scrum-treats• 3 years ago

Hmmm... Is she hiring?

Amazon poaching Federal Trade Commission officials ahead of antitrust lawsuit

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