back to article Amazon accused of being a monopolist in FTC lawsuit

The FTC - and 17 state attorneys general - have come out swinging at Amazon with a lawsuit accusing the ecommerce giant of being a monopolist.  Amazon, the FTC alleges, engages in anticompetitive conduct in two markets: online ecommerce and also the market for marketplace services used by sellers. The tactics used by Amazon to …

  1. Anonymous Coward
    Anonymous Coward

    It's true

    The overwhelming majority of regulation is constructed around "old world" problems, market structures, and business models. I'm (now) a regulator, and in my employer's particular niche the poor behaviour of dominant online players is a big problem that we're trying to address with new legislation - that IMHO doesn't go near far enough to regulate online marketplaces (OMP).

    The attitude of the OMPs is to play ball a tiny, tiny bit, but fundamentally to assert that they're compliant with the old rules, and to use their considerable lobbying resource and well funded lawyers to resist change, and fight enforcement actions. Good luck to the FTC, but I think their chances are low - Amazon will simply wheel out their purchased congressmen (reportedly $21m of US lobbying costs in 2022) and the FTC will find that their plans to make Amazon play by the rules will just get bogged down in the awful state of US government.

    1. Anonymous Coward
      Anonymous Coward

      Re: It's true

      The best democracy you can buy. I'm waiting for the Amazon Basics version of it.

    2. jmch Silver badge
      Thumb Up

      Re: It's true

      "It's true"

      Anyone who has had to deal with Amazon from the backend rather than just as a consumer knows they are an awful monopolist, not sure why it could be surprising to anyone. If there's a surprise it's the time it took to get an antitrust suit againt them going (probbaly related to their lobbying $millions and armies of lawyers)

  2. Steve Davies 3 Silver badge

    I can't wait

    For MAGA to claim that this is a result of the weaponisation of the FTC/DOJ/uncle tom cobbley and all in DC.

    Personally, this is long overdue but IANAL and do not play one on TV so what do I know eh?

    Amazon are fast becoming just as evil as the likes of Google, Facebook, MS and all the other usual suspects.

    They will be hoping that Trumpo gets re-elected because if the Dems take control of both houses and the White House then there may well be many more efforts to get Amazon unionized and with the feds behind them, their anti-union stance may well have to change and fast.

    1. Anonymous Coward
      Anonymous Coward

      The Adventures of Skeevy B

      > Amazon are fast becoming just as evil as the likes of Google, Facebook, MS and all the other usual suspects.

      Fast? They didn't become like this overnight, it just got to a point where it was bad enough for you to notice.

      As I noted just a few days ago, Amazon's descent has been going on for well over a decade by now, the cumulative result of a slow-but-sure decline and of drip-drip corrosive cynicism. Someone noted several years ago that "you can feel the skeeviness creeping in".

      Well, the skeeviness crept in long ago, made itself at home, and has now pretty much taken over the house.

  3. Tron Silver badge

    Ebay exists.

    Therefore Amazon cannot be called a monopoly.

    Case dismissed.

    1. ArrZarr Silver badge
      Facepalm

      Re: Ebay exists.

      Bing exists therefore Google cannot be called a monopoly.

      Except that according to statcounter, Google's market share in organic search has held steady at 92-93% for 14 years.

      A monopoly isn't an absence of competitors, it's an absence of relevant competitors.

      1. Criminny Rickets

        Re: Ebay exists.

        There's also Yahoo Search, DuckDuckGo and a few others. How is Google monopolistic if people decide to use them for doing their searches? Do they send squads out and force people to not use other search engines? It's peoples freedom of choice which search engine they use, so why should a company such as Google be penalized for people utilizing their own freedom of choice?

        1. ArrZarr Silver badge

          Re: Ebay exists.

          Let us consider the 2016 EU antitrust against Google around Google Shopping.

          The specifics of the ruling were that Google was using its dominance in the Organic Search space to muscle in on the Paid Shopping/Shopping Comparison space by putting Google Shopping results at the top of its search pages and not allowing any other companies to take part in the auction process for those shopping ads.

          This was killing competition in the Paid Shopping/Shopping Comparison space since it was so much easier for customers to use the Google Shopping results. The solution eventually arrived at was to force Google to let other companies bid on an equal footing for space in the Shopping results at the top of their search pages.*

          While you might be being picky about the definition of a monopoly being "There is no competition" vs "There is no relevant competition", Google's search engine is indisputably the dominant search engine in the majority of the world, with the notable exceptions of Russia and China. They don't need to send squads out, basically everybody uses google.com anyway.

          I actually tried switching to ecosia (which is powered by Bing) a couple of years back but found that the results I was getting for specific technical searches was of noticeably lower quality than when I gave in and headed over to Google for that search.

          Long story short, Google having a de facto monopoly on Organic Search does not let them use that Organic Search clout to push Chrome or a Google only holiday planner that is given special treatment on search pages, etc.

          *This is far from a perfect solution and I'm simplifying considerably to focus on the topic at hand

    2. Michael Strorm Silver badge

      Re: Ebay exists.

      I didn't know they made "My First Courtroom" playsets for preschool children!

  4. martinusher Silver badge

    Private Jets, that's the problem

    Obviously nobody connected with this suit has traveled inside the US by domestic airline, they all must use private jets or something. Airlines are dominated by four carriers who compete with each other for who can provide passengers with the worst service for the most money.** (They're not particularly employee friendly, either.) This situation didn't happen by accident, it was a process of mergers and systemic stifling of competition that got us here, and its a great situation to be in because between Federal regulation of passenger behavior and the threat of no-fly lists they can pretty much do what they like without any risk of the customers complaining. They're not unique in their behavior -- pick any large US business and you'll find monopolistic behavior geared to delivering the least for the most, be it in railroads, pharmaceuticals, vehicles -- you name it, we'll get screwed by it.

    Compared to the norm Amazon is a paragon of competitive probity. (They do have competition as well, believe it or not.) I suspect this is really about wannabe competitors wanting a piece of their action -- split the thing up Bell System style so there's bound to be plenty of spoils to squabble over. Ultimately it comes down to the relative cost of lawyers compared to getting off one's duff and actually doing some work.

    (Guess who's now automatically disqualified from any trial jury involving Amazon.......)

    (**A recent article in the business press described them as "Banks that also happen to fly planes. Sometimes" due to the relative profit they make running points schemes and arbitraging those points compared to actually flying planes. Its actually a metaphor for what's wrong with US business as a whole.)

    1. Sora2566 Bronze badge

      Re: Private Jets, that's the problem

      "Someone else is worse" is the argument of somebody who knows full well that the entity being discussed cannot be defended otherwise.

      1. martinusher Silver badge

        Re: Private Jets, that's the problem

        >"Someone else is worse" is the argument of somebody who knows full well that the entity being discussed cannot be defended otherwise

        I didn't say that -- read the comment. What I said is that this is SOP for American business and as businesses go Amazon is actually pretty benign. Its also SOP in the UK. Some companies are honest and call it "surge pricing" or "demand pricing". Most are not.

        I don't like the practice but its the way things are. Singling out Amazon is just a) making a lot of noise and b) going after the money --- its not going to change business practice one bit, in fact its likely to make things worse.

        1. jmch Silver badge

          Re: Private Jets, that's the problem

          "What I said is that this is SOP for American business and as businesses go Amazon is actually pretty benign. Its also SOP in the UK. Some companies are honest and call it "surge pricing" or "demand pricing"."

          If you RTFA you would realise it has nothing to do with surge pricing. There's many things going on here, but 2 specific ones mentioned in the article: (1) Amazon partners cannot sell an item at a lower price than Amazon itself and (2) Amazon Prime customers can't be offered free shipping by partners unless it's Amazon itself who fulfil the order.

          In both cases, Amazon is acting as both the owner of the marketplace AND as a player in the marketplace competing against all the other players, and using one of it's 'branches' to give another of it's 'branches' an unfair competitive advantage. It's no different to MS directing Windows users to use IE/Bing vs any other browser or search engine, or Google rigging ad auctions - It's textbook antitrust behaviour.

        2. Sora2566 Bronze badge

          Re: Private Jets, that's the problem

          So police should only ever go after small offenders, as going after major offenders is just going to "make a lot of noise" and "make things worse"?

          Yes, other people do this. It's illegal, and should be stopped.

          Amazon being a major player who does this makes this *more* important to stop, as it's committing the *actual, literal crime* at a massive scale. If people look at Amazon as normal, why should they not do the same thing? Commit the same crimes?

    2. jmch Silver badge

      Re: Private Jets, that's the problem

      Yes, US airlines have, indeed, evolved into banks that also happen to fly planes and pretty much all their value is now tied into their frequent flyer schemes. This has absolutely nothing to do with monopolistic behaviour or antitrust. Each of the 'big 4' has between 15 and 17% market share (https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-airlines/).

      Amazon, on the other hand, have close to 40% of the "online sales" market (https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-commerce/), with the next closest at just over 6%. Most of the other major "online" vendors are actually online portals of physical shops (Walmart, Target, Costco....) or consolidated verticals (Apple), with the next platform (eBay) having less than a tenth of "online sales". If the category were "online sales platforms", Amazon would probably be around the 70-80% mark.

      It's not even remotely comparable.

  5. Nate Amsden

    last time I ordered from Amazon

    March 2011(checked email archives to confirm). Just a truly ruthless company(took me a while to realize how bad), much like Walmart(whom I never really ever bought from but learned of their business practices in the mid-late 90s I think and certainly not given them business since). I lived in the Seattle area from 2000 until 2011. A big part of moving away from that area was ex-Amazon folks infecting companies all over the area in misguided attempts to instill amazon culture/practices in those companies. In the early 2000s it was a lot of ex Microsoft folks, but at the two startups I worked at(back to back) founded by ex-MS people (and the employees in general) I never got bad vibes like I did from ex-Amazon. In fact both of those startups from ex-MS started out with Windows and switched to Linux(I joined after the transition was well underway in both cases).

    One of my last straws was an interview in 2011 at a then pretty well known tech startup(in that area at least). The only interview I've ever had where I was just a hair away from standing up and walking out because I saw the blaring red flags(my ears at time literally felt hot). But I needed a new gig at the time, so I told the "tech leader" what he wanted to hear, his approach to computing wasn't a bad idea in concept(he basically wanted to build their own "amazon cloud" using the same techniques he claims he learned at amazon, meanwhile his linkedin profile implied he was nothing more than a low-mid level tech), it was just a horrible idea for that and many other companies who don't have the resources to do it properly. My approach is pretty much polar opposite of that. I knew they would fail. They gave me the job offer, less $ than I expected, they said it was because I didn't have as much experience(HAHAHA) as they wanted. Ok whatever, I declined and went to work at another company in California my former boss was trying to talk me into going for a few months, ended up staying at that company for just about 11 years. That was after leaving another tiny startup run by tons of ex Amazon folks. My last manager at that small company was a 12 year veteran of Amazon, he was a real cool guy I liked him a lot. He resigned the day after I did, and later tried to recruit me to join Oracle cloud. Having my boss quit immediately after me happened at two different companies in a row.

    I have a friend who was a vendor for that company that interviewed me and he had close contacts with them for years, at one point their entire network team walked out. Eventually, maybe 18 to 24 months later(after I declined their offer not after the network team quit) I forget exactly when but that guy was fired and escorted out of the building. The company had to pay above market rates to try to recruit new folks as their reputation had been soiled.

    I have many friends who work/worked at Amazon, some of them really liked it there(not in close contact with them these days), others I know did not(I'm told it all comes down to the manager). I had one co worker in early 2000s that came from Amazon who everyone thought he had a mental disorder (like Tourette syndrome) as he would openly attack people's ideas very bluntly leaving everyone in the room pretty speechless. It wasn't until several years later the New York Times published an in depth article on Amazon culture in 2015 and after reading that I realized that guy was just raised that way early in his career at amazon, wasn't a metal disorder.

    And that's not even counting all of stressful situations I've dealt with over the past almost 14 years with seemingly countless executives who are sold on the "cloud" and just can't believe the cost numbers when they actually see them. It's practically never ending. Seeing new low/mid-level system admin types hype up on the cloud for the same reasons(and can't accept the truth of costs) not realizing the actual costs/complexity is annoying as well though at least with those people I never have to deal with them (outside of forums). Certainly there are situations where public cloud is a great idea, but they are a small minority of workloads(saying that as someone who has hosted their own email/web/dns since 1997).

    If you haven't seen that NYT article, check it out, it's pretty interesting(and sad).

    I still feel dirty when innocently ordering stuff from Ebay and Newegg and maybe 3% of the time it comes from Amazon.

    so yeah, I'm not a fan of amazon haha.

    1. Anonymous Coward
      Anonymous Coward

      Re: last time I ordered from Amazon

      Amazon has moved from "a convenient way to shop stuff (even for us not in the US)" to "vendor of last resort"[1]. I generally refer to them as Big River of Labour Violations, just to make sure I do not forget.

      [1] US seller: selling abroad? Of course, just add $78 to your $11 purchase for courier shipping (+ expect to pay sales tax on the entire $89 when it reaches you).

      UK reseller: sorry, but since we started using a ball a rusty barbed wire dipped in Tabasco as a buttplug it is too complex to sell to EU customers, so we won't. even try[2]

      [2] Some of them handle it very nicely and transparebntly

  6. jmch Silver badge
    Headmaster

    Royal??

    " ...an Amazon *reigned* in by the FTC..."

    That should be "reined in"

  7. Criminny Rickets

    I do quite a bit of shopping on Amazon myself. The biggest reasons I do so is that a number of the things I am looking for I am unable to find locally, or I can get a much better price for it on Amazon. I would rather pay an Amazon reseller $100.00 for something than pay a local company $500.00 for the same item.

    Usually though, If I can get it locally at a decent price, I will buy local first.

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