Lots of retailers (both physical & online) have similar requirements, and many manufacturers have similar requirements for minimum advertised prices (such as Apple). I think the California AG's plan is to argue that the pricing rules combined with Amazon's large market share merit a judgement against them, but it's going to be an uphill battle to single out one company for practices that are common to the industry.
1. https://oag.ca.gov/system/files/attachments/press-docs/2022-...
2. https://oag.ca.gov/system/files/attachments/press-docs/REDAC...
My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary.
> many manufacturers have similar requirements
That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.
The original wording was
>Amazon requires that anyone selling through their platform not offer lower prices elsewhere online.
which means if the seller offers to sell something on amazon for $x, but has a shopify site selling it for < $x, then that seller will get deranked. That's not the same thing as the lowest price, because it's possible that other sellers sell for higher prices, and some people might not find whatever obscure shopify site that has the lowest price.
The wording is admittedly ambiguous, but the fact that there are totally overpriced items available on amazon suggests amazon isn't deranking people just because it's not the best price on the internet.
This kind of thing is ultimately bad for customers because it reduces competition between sales outlets, by making it very difficult for smaller players to compete on price.
Basically different distribution channels (speciality shops, big box marketplaces, and ecom stores) have very different levels of overhead, so if each channel was allowed to set their own price, you'd end up with brick and mortar stores doing a lot of showrooming and then online stores gaining the bulk of sales because they're cheaper (because their overhead is low).
This pretty much happened in the early 2000s-2010s so over time brands became VERY particular about enforcing MAP.
This is what I see happen in Poland with clothes and electronics stores, but I don't exactly understand what MAP is supposed to be solving here, given that the brick&mortar and on-line stores are literally the same entity/brand, and in case of clothing, they're also the manufacturer brand?
Manufacturer does not want that, because then it will lose most of it's distributors in Germany.
NB: Though I am not debating if it's right, fair or best for consumer. Just mentioning, what I've experienced.
If I know I can go online and it'll be some % cheaper, I'll wait and order it online, defer my gratification for a few days, and end up with a cheaper product.
Not sure about Poland, but most B&M brick and mortar stores in the US are distributors/resellers of the brand, they buy for $4 and sell for $10, and their rent/labor/etc costs $3 and they profit $3. Another distributor let's say is an e-commerce website, they can setup a warehouse in a rural area with cheap labor so it costs them $1 and they profit $5... so they can afford to discount it to $7 and make $2... which the B&M store can't do because they won't profit at all.
Um... and? That's quite literally "the market working as intended" and while I am not a free-market apologist by any stretch, that seems to be a rather benign effect.
What makes MAP especially suspicious in my eyes is that it's the manufacturers that seem to be overly concerned over well-being of one specific kind of their downstream buyers/distributors/resellers, not those distributors/resellers themselves. I understand that if B&M stores would try to impose that, then the FTC would (hopefully) smack it down pretty quickly but apparently when a manufacturer mandates the price to the resellers, it's perfectly fine? Somehow? Isn't there collusion somewhere in there, probably?
Historically, you only paid for that service when you bought something, since most stores can't convince you to pay an entrance fee. When you go to the store to select products and then buy online, you're leeching on that service and putting the entire business model at risk. If everyone did that, brick-and-mortars would go out of business and you wouldn't have access to that service, which sucks for everyone.
That is obviously not a reason why, considering the place where I've seen those listings is Amazon.
1. Amazon is a search engine for product
2. It values being the cheapest destination for products (MFN most favored nation clause to sell on their website), and basically will suppress your listings from search if they can find you selling it cheaper elsewhere.
3. Amazon is def one of the more expensive ecom channels to sell, BUT they've got a huge audience as well due to decades of consumer-first policies, so sellers still go there because even if they have loyal customers with strong brand loyalty, you still end up with at least 30% of customers going to Amazon first after seeing your ads elsewhere + the lure of NTB new-to-brand customers you can acquire there.
So the crux of the case is dependent on whether they can do #2 with impunity -- which Amazon considers "consumer friendly" (but obviously it's win-win for them too).
Yes, I understand the price fixing is why they aren't selling for less on their own site, but Amazon's superpower is logistics, not years of goodwill and brand loyalty.
Amazon is hugely anti-competitive, but their moat can be surprisingly shallow in some areas.
What Amazon has shown the rest of the industry is that shipping matters. Others are learning, at their own pace.
Once FBA started failing during COVID due to warehouse restrictions + sellers and 3PL third party logistics centers really stepped up did FBM even become a thing (and Amazon smartly gave access to Prime badges for FBM sellers who could deal with stringent shipping times).
IMHO the other big superpower Amazon has is to force sellers to eat returns and provide retroactive refunds when a product gets recalled.
I took a trip to Tampa not so long ago for a few days to hang out with an old friend who I don't see very often, and also to help him with a long list of technical stuff around his house. I flew down in cattle class with no luggage, which meant that I didn't get to bring anything in terms of tools or materials. That left me a bit out-of-sorts -- I'm used to having a work truck with me that is full of the tools and stuff that I find useful.
And we got into all kinds of projects. We got a lot actually-finished, and we had a great time doing that stuff together.
But there was a recurring theme: We'd need to buy some widget or other to move forward. So I'd fire up my pocket supercomputer and start looking to see if Home Depot or Best Buy or Wal-Mart or whoever had it locally, and then start to figure out some ideal factor of best price and travel time.
Because that's just what I know how to do. In my life, when I want to get things done today and doing that requires more widgets, then I have to get in the car and drive to the store to get them -- ideally, with a good plan in place first.
And he wasn't having any of that. Over and over again, he'd shut me down and say "No, look. Just order it on Amazon. They'll probably bring it over today."
And over and over again, I'd look on Amazon and: Sure enough. They brought it over today. Sometimes, with 3 different deliveries in a single day as projects progressed and our need for widgets changed shape. Sometimes, late at night.
I don't think we drove anywhere at all while I was down there except to tool around the neighborhood to find some yard sales one morning, and another trip to pick up more liquor and some Chilean sea bass from Costco.
I value free and easy returns above lowest price, especially in this day and age of rampant mis and disinformation. Which basically means I almost always buy from the big box stores (including Amazon).
Rico as written and enforced walks right up to the limit of constitutionality in a dozen ways. It's built for speed. It's never really been thrown into a knock down drag out legal action between titans on equal footing (i.e. a bigco legal team, potentially helped by other bigcos). It might survive nominally but it probably won't come out the other end in serviceable condition. You might win a few but eventually an appeal will find its target and end your day.
I say go for it. Heads I win. Tails you get RICO reform.
"I'd be ok with civil asset forfeiture for drug traffickers/dealers"
-The 1980s equivalent of you
Please don't fulminate...
Eschew flamebait. Avoid generic tangents. Omit internet tropes.
Please don't use Hacker News for political or ideological battle. It tramples curiosity.
https://news.ycombinator.com/newsguidelines.html
It would make all the difference if the comment included some commentary on why Antitrust law is inadequate in this case and how RICO would be likely to enable a better outcome.
But everyone was making tons of money due to ZIRP trickle down no one cared then
It lists plenty of crimes, but anti-trust violations isn't one of them.
Also, obligatory https://web.archive.org/web/20170301062028/https://www.popeh...
See specifically sections "Wait. Isn't the defendant the enterprise?" and "So what's "racketeering activity"?"
- they take a huge cut, making them more expensive. I've heard some folks give 50% to amazon to sell stuff
- they destroy or drive away brands, so you cannot shop for quality
- "customers" are bombarded by ads. I think sponsored links seem to be close to 100% of results until you scroll down a few pages.
Did Amazon think they were too big to convict?
I wonder if they will meet the fate of Standard Oil, back in the day.
https://www.theamericanconservative.com/robert-borks-america...
(BTW that source is right-wing and can hardly be said to be biased against Bork).
And can't we do a class-action lawsuit against Amazon at this point?
A major part of the problem isn't even that we don't have laws on the books, it's that funding to the enforcement agencies has been gutted to the point where they can mostly just go after extreme egregious violations or very easy to win cases. The IRS is in exactly the same boat.
I didn’t see anything in the article suggesting Amazon ask for the 2nd option, just examples of sellers who did the 2nd one.
Amazon's behavior is still anti-competitive. They are the big boys. The drive lots of volume, and have high fees. This policy makes it impractical for most vendors to support Amazon's competitors or compete with Amazon themselves. And it robs customers of a meaningful choice that would cut out an expensive middleman.
Without this policy, you might see lots of products on Amazon that are $19.99 with Amazon's 30% cut, and maybe $13.99 (30% less) on the vendor's own website. The consumer loses twice with Amazon's policy: once because they couldn't get the item at a cheaper price, and again because they didn't support any innovation or competition in the market, which would also lower prices.
Airlines were really the first to do this but there it kinda makes sense. You have a plane. It's going anyway. You want to fill it.
At the other extreme is RealPage, which is explicitly designed to raise rents and it's used by enough people that you can view it as the last frontier of anti-trust, anticompetitive behavior and price-fixing. It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it.
That's another aspect to this: collusion doesn't happen in dark smoke-filled rooms anymore. It can be as simple as all "competitors" simply using the same software, which tells them all to do the same thing.
Another commenter had it right: this is beyond antitrust or competition law. It's a RICO issue.
There's no real structural reason for inflation since the pandemic. The pandemic simply broke the seal on raising prices and now everybody is in on it.
Explain "violence", please.
