I'd love to see how this applies to store brands and shelf placement in retail stores as well.
I've noticed this comment constantly pop up on Amazon antitrust discussions. It's not the same thing.
Retail stores buy the products they put on their shelves, at wholesale prices. They then mark up the prices to a retail price charged to the end buyer when they resell the products to the end buyer.
For store brands, the store still pays for the goods up front, but they're usually just buying white-label products from suppliers that don't need to make up for marketing expenses, and so the wholesale prices are cheaper.
There is no competitive concerns here because the product maker has already been paid for their goods.
Amazon isn't being investigated for the products it buys from its suppliers. It pays for those and so it can do whatever it wants. It's being investigated for the products it doesn't, i.e., the "Marketplace" of third-party sellers where Amazon is using its internal data gathered from the third-party sellers to compete with them. There is a competitive concern here because Amazon controls the marketplace and is using its market position to compete against these third party sellers.
There is no comparable analog to the physical/retail world because such an arrangement doesn't exist in the retail world.
Contrast to ebay or etsy, which are all third-party sellers. No competitive concerns there, because they aren't trying to compete with their own sellers.
1. Many retail agreements are much closer to Amazon Fulfillment than you might realize. I know Best Buy, for instance, starts new relationships with a "pay as you go" scheme. Meaning we would ship them a pallet, they would literally charge us a warehouse fee, and then pay us as the product sold, and refund us the warehouse fee upon a complete sellout within a certain time frame. We had to sell our way into a classic wholesale to retail relationship.
2. I am aware of how store brands work, thanks. Amazon does this with Amazon Basics brand, which is a point of contention in the monopoly. It is identical to a store brand.
If a retailer buys whole-sale white labeled products to compete against yours at a competitive rate, that is competition. Please try again at hand-waving that away.
3. Walmart, Kroger, Trader Joe's, Whole foods, all use data they have gathered from selling products to determine which white label brands it wants to create and compete with other products. There is a competitive concern here because these retailers control shelf space and promotional material and uses their physical retail space and sales data to compete against brands. Walmart more-so than all the others.
I think I am building a pretty good comparison here.
>Retail stores buy the products they put on their shelves, at wholesale prices. They then mark up the prices to a retail price charged to the end buyer when they resell the products to the end buyer.
Why is this difference salient? This process of selling, reselling and markup recurs for years. Economically the outcome is the same as the store charging a fee like Amazon, just with the payments split up and time shifted. If you doubt that the same power imbalances exist in brick-and-mortar, read about how Walmart squeezes suppliers.
Really that seems to be an obvious pretext in a way worrying to rule of law from how blatantly selective it is.
Literally every merchant large enough for store brands uses their own sales data to gain an advantage! They know they get a good deal of sales so they can reduce expenses by vertical intergrating commodities.
It's actually not blatantly selective, you're merely misunderstanding the set of rules they are looking at. Most of the places you probably think of as "in a similar situation yet not bothered" [like retail stores] are NOT marketplace, they do NOT sell shelf space. They buy the product, and then they resell it to the end consummer. They are the seller.
Amazon presents itself as a marketplace, and gets a few advantages from that (such as being able to shift responsabilities for some issues to the "real" seller), and as such they must act like one on other aspects too.
Other French exemples of marketplaces with such rules to follow would be cdiscount for exemple (2nd after amazon in volume).
The boom of white-label, or retailer-brand products was definitely fueled by sales data.
What may have started as a simple analysis to evaluate share of shelf, easily could turn to "what if we sold these"?
The main difference vs Amazon is the Reviews data (that's worth what's worth with all of the fake reviews), and you can't buy on Amazon without using your account so every sale is bound to an specific person. In that regard no retailer has this data.
Even those who have loyalty programs that end up being a tracking card, people can still buy without using cards.
But no real world grocery chain has anything near a monopoly. The whole point of antitrust law is that businesses in dominant positions have additional limits to what they can do.
I cannot talk for other places, but in the context of the EU the big point is presenting yourself as a marketplace / a third party that merely stores shelf placement (or the equivalent on your platform), instead of selling others' items yourself.
Retail stores are not in the business of offering a marketplace for companies to buy shelf placement. When I go to a retail store and buy something, the seller is always the store. In terms of the laws, insurance, etc ... It changes a lot.
Marketplaces have protections, but those protection come from their independance from one vendor or another. Same principle that made us force all of our national ISP to separate their fiber/network business from their actual ISP business, or why the national train companies were cut and separated from the rail lines companies ...
You may be surprised to hear that it actually is the case that retail stores are very much in the business of selling shelf space (at least in the United States - I cannot say for the EU).
It is known as a "slotting fee" and manufacturers pay it for limited shelf space in grocery stores for example. It is particularly important for the distribution of new products as stores would prefer not to take risks on an item that may or may not sell very well.
I think there are a HUGE misunderstanding and difference of POV from EU and US. Much like how US ( consumers ) even view Cross Bleeding as GMO.
What you said is mostly correct in EU, so I am not sure why you are getting downvoted. They do sell shelf placement ( in different stature ), however the marketplace and Retails protection is still in place.
In 2017, Lina M. Khan published an article in the Yale Law Review entitled “Amazon’s Antitrust Paradox” (January 2017, Volume 126, Number 3, pp. 710-805) where she points out that the US.'s current antitrust law is inadequate to address Amazon's threat to competition. Definitely a good read for anyone who feels that online platform pose unique challenges for antitrust ethics.
>With the recent history of increasing EU fines, this has to be worrying.
The article mentions that Amazon just made some changes because of a similar accusation from Germany, so there is no huge fine first and then you fix your stuff, from what I seen so far the big scare that EU is trying to milk US companies with huge fines for small issues without warring is just FUD.
FYI, that's what the US does already and big time. They racket companies with the Foreign Corrupt Practices Act, it has always been applied to foreign and strategic companies. Recently the U.S. even emprisoned a french just to put pressure and aquire Alstom, an extremely strategic french company [0] (nuclear reactor, trains,...)
The fact that the the thing allegedly being monopolized, and the monopolization mechanism are "data" makes this interesting, and potentially informative.
On another thread about Google's search monopoly, the consensus (or whatever the nearest HN-equivalent is) opinion that data (past searches and user behaviour) is a major moat for Google.
In a lot of senses, data is a new type of capital, a new type of IP. It's ownership is still in debate. Some recent legislation attempts to give us a certain level of theoretical "ownership" of "our personal data," but ultimately... data isn't really data unless it's aggregated. What it is, and how useful it is depends on having lots of it.
Being "intellectual" property essentially means that it's ethereal property. It isn't exclusive by nature, only by law. If a court finds that Amazon using its extensive market data to monopolistic advantage... What's the fix? Could it be make data public? That's an interesting discussion to start having in the context of a competition investigation.
Say we put privacy questions aside for a start... what's the public downside to making such data public by default... over a certain magnitude.
I think Data is too vague of a term. It's probably more a combination of proprietary metadata + personal/targeted demographic data.
Does a store (online or B&M) have exclusive license of your aggregate heatmap while you walk/browse through the store? - I think many would argue that's probably valid.
Does it have the right to link that to your demographics/psychology to optimize the store? They probably do ... but for your benefit? Sounds like "personalization" - a bit murky. How about if it's for their benefit (personal price segmentation)? That sounds bad/unethical. How about if it's to only serve the "right people"? That's clearly on the edge of legality.
The remedy is to have cyberethics on how personal/private data is controlled and aggregated. It's not about "opening things up" but using Amazon as a case study as to how to draw borders/distinctions on proprietary vs. personal data. GDPR++
I suppose we'll see. I think it's more likely that we see some limitations on us of your aggregate data, if it's decided on privacy. To me, this sounds unattractive. This doesn't make it "our data" in a meaningful way. We can't get the value from it.
Monopoly, oth, is all about aggregation and that's what's being discussed here.
Well I imagine the immediate downside is having companies that you dont care for trying to influence you with data you never gave them possibly quite on purpose.
In the end that's just a privacy concern again. I think the problem is always the scale. Knowing one persons data isn't to harmful to society. But knowing so many and having real incentive to use and abuse it has always been the problem. That type of data lead to Trumps election and Brexit both from the same person. So data can definitely move nations. I think the best option is to break the big tech companies up. On smaller scales they are less harmful.
When we say "break up" in the context of Google... what do we mean? Geographically? By "vertical" like Gmail & stuff, YouTube and search, advertising & making money, waymo and other loss making operations..?
I'm not sure what the solutions to all the issues are. But, apart from the issues around privacy (and I'm not sure the conventions we're aiming for are great on privacy anyway), we just can't "physically" own our data individually. That's not how data works. The data from lots of cars driving around can become a self driving car program. The data from you driving around cannot (never say never though). It's data's qualities at scale that are being discussed here.
Amazon knows what and how and how much who buys, at scale. If an allegation/indictment is made, it will/may allege that at Amazon scale, this is monopolistic.
You don't have any evidence that "data" is the reason why Trump or Brexit won.
Recall:
- Trump was not an experienced campaigner, had no real campaign database and spent half as much as Clinton.
- Leaving the EU was represented by two different campaigns which hated each other, none of which had any meaningful amounts of data, and were up against a vastly well funded and organised campaign by the government, literally, the organisation that has the most data on everyone.
Trump won because Clinton was a terrible candidate who had a policy of starting a war with Russia (her no-fly zone over Syria) and Leave won because Remain ran a terrible campaign that boiled down to "we can't leave because the EU will punish us severely if we do and we are weak". You don't have to be a campaigning genius to understand that people don't like these things - vague allusions to 'data' aren't necessary.
This is a lot along the lines of questioning to large tech firm representatives yesterday in the senate- if these large tech companies are monopolizing due to having all these separate products and bolstering each product over other equivalent products.
But when criticized, each company defended itself by trying to say that each of their individual components had hot competition, even though they also defended the tight integration of their own product suites(arguably over other individual products) as for the client. Google's representative even claimed that google can be entirely avoided if a customer desired.
Hah, that's rich. Good luck avoiding google ads, recaptcha, or google analytics. Those aren't products we're direct users of, but they definitely aggregate our data. I guess you can avoid them by simply not going on any website.
recaptcha in particular is extremely vicious: you can't avoid it without giving up access to the website - even though that website isn't Google's property. With cloudflare forcing recaptcha if they don't like you, this effectively blocks an extremely large portion of the internet out.
Antitrust isn't actually about monopolies. It's about anti-comptitive business practices. While market share usually matters, there are a number of antitrust violations where market share is irrelevant.
Great quote. Do you have a salient point or should we all just assume that you're doing the highbrow version of "these EU bitches just jelly, look at all my fat Amazon stacks!!!!"?
Some people have legitimate problems with Amazon, the way it treats its workforce, the effect is has on the global marketplace. This isn't just because Bezos is extremely wealthy and Amazon valued so highly.
Readit News
I'd love to see how this applies to store brands and shelf placement in retail stores as well.
I've noticed this comment constantly pop up on Amazon antitrust discussions. It's not the same thing.
Retail stores buy the products they put on their shelves, at wholesale prices. They then mark up the prices to a retail price charged to the end buyer when they resell the products to the end buyer.
For store brands, the store still pays for the goods up front, but they're usually just buying white-label products from suppliers that don't need to make up for marketing expenses, and so the wholesale prices are cheaper.
There is no competitive concerns here because the product maker has already been paid for their goods.
Amazon isn't being investigated for the products it buys from its suppliers. It pays for those and so it can do whatever it wants. It's being investigated for the products it doesn't, i.e., the "Marketplace" of third-party sellers where Amazon is using its internal data gathered from the third-party sellers to compete with them. There is a competitive concern here because Amazon controls the marketplace and is using its market position to compete against these third party sellers.
There is no comparable analog to the physical/retail world because such an arrangement doesn't exist in the retail world.
Contrast to ebay or etsy, which are all third-party sellers. No competitive concerns there, because they aren't trying to compete with their own sellers.
2. I am aware of how store brands work, thanks. Amazon does this with Amazon Basics brand, which is a point of contention in the monopoly. It is identical to a store brand.
If a retailer buys whole-sale white labeled products to compete against yours at a competitive rate, that is competition. Please try again at hand-waving that away.
3. Walmart, Kroger, Trader Joe's, Whole foods, all use data they have gathered from selling products to determine which white label brands it wants to create and compete with other products. There is a competitive concern here because these retailers control shelf space and promotional material and uses their physical retail space and sales data to compete against brands. Walmart more-so than all the others.
I think I am building a pretty good comparison here.
Why is this difference salient? This process of selling, reselling and markup recurs for years. Economically the outcome is the same as the store charging a fee like Amazon, just with the payments split up and time shifted. If you doubt that the same power imbalances exist in brick-and-mortar, read about how Walmart squeezes suppliers.
Not necessary. And often you have clauses saying suppliers will buy back unsold inventory.
Literally every merchant large enough for store brands uses their own sales data to gain an advantage! They know they get a good deal of sales so they can reduce expenses by vertical intergrating commodities.
Amazon presents itself as a marketplace, and gets a few advantages from that (such as being able to shift responsabilities for some issues to the "real" seller), and as such they must act like one on other aspects too.
Other French exemples of marketplaces with such rules to follow would be cdiscount for exemple (2nd after amazon in volume).
What may have started as a simple analysis to evaluate share of shelf, easily could turn to "what if we sold these"?
The main difference vs Amazon is the Reviews data (that's worth what's worth with all of the fake reviews), and you can't buy on Amazon without using your account so every sale is bound to an specific person. In that regard no retailer has this data.
Even those who have loyalty programs that end up being a tracking card, people can still buy without using cards.
Retail stores are not in the business of offering a marketplace for companies to buy shelf placement. When I go to a retail store and buy something, the seller is always the store. In terms of the laws, insurance, etc ... It changes a lot.
Marketplaces have protections, but those protection come from their independance from one vendor or another. Same principle that made us force all of our national ISP to separate their fiber/network business from their actual ISP business, or why the national train companies were cut and separated from the rail lines companies ...
It is known as a "slotting fee" and manufacturers pay it for limited shelf space in grocery stores for example. It is particularly important for the distribution of new products as stores would prefer not to take risks on an item that may or may not sell very well.
Further reading:
https://en.wikipedia.org/wiki/Slotting_fee
https://www.vox.com/2016/11/22/13707022/grocery-store-slotti...
What you said is mostly correct in EU, so I am not sure why you are getting downvoted. They do sell shelf placement ( in different stature ), however the marketplace and Retails protection is still in place.
Also, i realize the article is not legally informed but the opening question seems like a slam dunk against AMZN
>to investigate whether the company is using sales data to gain an unfair advantage over smaller sellers on the Marketplace platform
I suppose the question is not whether they have an advantage, but whether its unfair or not.
The article mentions that Amazon just made some changes because of a similar accusation from Germany, so there is no huge fine first and then you fix your stuff, from what I seen so far the big scare that EU is trying to milk US companies with huge fines for small issues without warring is just FUD.
So, EU fighting back doesn't suprise me !
https://en.wikipedia.org/wiki/Alstom#Acquisition_by_General_...
A good source but in french: https://www.youtube.com/watch?v=dejeVuL9-7c
You know, if those US companies would pay the tax they should, similarly to the small companies, these may not be necessary.
Deleted Comment
EU commission press release [PDF]: https://ec.europa.eu/commission/presscorner/api/files/docume...
On another thread about Google's search monopoly, the consensus (or whatever the nearest HN-equivalent is) opinion that data (past searches and user behaviour) is a major moat for Google.
In a lot of senses, data is a new type of capital, a new type of IP. It's ownership is still in debate. Some recent legislation attempts to give us a certain level of theoretical "ownership" of "our personal data," but ultimately... data isn't really data unless it's aggregated. What it is, and how useful it is depends on having lots of it.
Being "intellectual" property essentially means that it's ethereal property. It isn't exclusive by nature, only by law. If a court finds that Amazon using its extensive market data to monopolistic advantage... What's the fix? Could it be make data public? That's an interesting discussion to start having in the context of a competition investigation.
Say we put privacy questions aside for a start... what's the public downside to making such data public by default... over a certain magnitude.
Does a store (online or B&M) have exclusive license of your aggregate heatmap while you walk/browse through the store? - I think many would argue that's probably valid.
Does it have the right to link that to your demographics/psychology to optimize the store? They probably do ... but for your benefit? Sounds like "personalization" - a bit murky. How about if it's for their benefit (personal price segmentation)? That sounds bad/unethical. How about if it's to only serve the "right people"? That's clearly on the edge of legality.
The remedy is to have cyberethics on how personal/private data is controlled and aggregated. It's not about "opening things up" but using Amazon as a case study as to how to draw borders/distinctions on proprietary vs. personal data. GDPR++
Monopoly, oth, is all about aggregation and that's what's being discussed here.
In the end that's just a privacy concern again. I think the problem is always the scale. Knowing one persons data isn't to harmful to society. But knowing so many and having real incentive to use and abuse it has always been the problem. That type of data lead to Trumps election and Brexit both from the same person. So data can definitely move nations. I think the best option is to break the big tech companies up. On smaller scales they are less harmful.
When we say "break up" in the context of Google... what do we mean? Geographically? By "vertical" like Gmail & stuff, YouTube and search, advertising & making money, waymo and other loss making operations..?
I'm not sure what the solutions to all the issues are. But, apart from the issues around privacy (and I'm not sure the conventions we're aiming for are great on privacy anyway), we just can't "physically" own our data individually. That's not how data works. The data from lots of cars driving around can become a self driving car program. The data from you driving around cannot (never say never though). It's data's qualities at scale that are being discussed here.
Amazon knows what and how and how much who buys, at scale. If an allegation/indictment is made, it will/may allege that at Amazon scale, this is monopolistic.
Recall:
- Trump was not an experienced campaigner, had no real campaign database and spent half as much as Clinton.
- Leaving the EU was represented by two different campaigns which hated each other, none of which had any meaningful amounts of data, and were up against a vastly well funded and organised campaign by the government, literally, the organisation that has the most data on everyone.
Trump won because Clinton was a terrible candidate who had a policy of starting a war with Russia (her no-fly zone over Syria) and Leave won because Remain ran a terrible campaign that boiled down to "we can't leave because the EU will punish us severely if we do and we are weak". You don't have to be a campaigning genius to understand that people don't like these things - vague allusions to 'data' aren't necessary.
But when criticized, each company defended itself by trying to say that each of their individual components had hot competition, even though they also defended the tight integration of their own product suites(arguably over other individual products) as for the client. Google's representative even claimed that google can be entirely avoided if a customer desired.
recaptcha in particular is extremely vicious: you can't avoid it without giving up access to the website - even though that website isn't Google's property. With cloudflare forcing recaptcha if they don't like you, this effectively blocks an extremely large portion of the internet out.
I'd be much more happy if they were investigated for predatory pricing. That's the real issue with Amazon imoh.
You might find https://www.newyorker.com/business/adam-davidson/teddy-roose... interesting.
Not into "monopoly" by the "antitrust", the title is misleading.
Some people have legitimate problems with Amazon, the way it treats its workforce, the effect is has on the global marketplace. This isn't just because Bezos is extremely wealthy and Amazon valued so highly.