Amazon accused of anti-competitive practices

From The Bookseller:

Amazon has been accused of anti-competitive practices in a scathing report into US tech giants by Democratic politicians. The online retailer has rebutted the claims, saying “the presumption that success can only be the result of anti-competitive behavior is simply wrong”.

The 450-page report written by Democrats on the House Judiciary Subcommittee on Antitrust, released on 7th October, comes after a 16-month probe into whether Amazon, Facebook, Google and Apple abuse their power. Republicans on the committee have refused to sign the report and are releasing a series of their own instead.

The report, which calls for US antitrust rules to be overhauled, said the companies were running marketplaces they also competed in, allowing them to “write one set of rules for others, while they play by another”.

Book publishers told the committee Amazon uses retaliation “to coerce publishers to accept contractual terms that impose substantial penalties for promoting competition” with its rivals. One publisher claimed the platform’s retaliatory conduct shows “Amazon’s ability and willingness to leverage its market power to prevent publishers from working effectively with rival e-book retailers and, thereby, maintain and enhance its dominance in e-book distribution.”

Retaliation included Amazon removing the “buy” and “pre-order” button from products, or showing titles as out of stock or with delayed shipping times, it was claimed.

The report states: “According to credible reports, Amazon used these tactics in its public battle with Hachette Book Group in 2014 over e-book pricing, and has used them or threatened to use them in more recent negotiations. Publishers, authors, and booksellers have ‘significant fear’ because of Amazon’s dominance.”

. . . .

According to the report, Amazon hosts 2.3 million third-party sellers from around the globe, with around 37% of them, or more than 850,000, relying on the site as their sole income source.

However, the report claims Amazon uses sales and product data from its marketplace to identify and replicate popular, profitable items offered by third-party sellers. It will then create a competing product, or identify and source the product directly from the manufacturer “to free ride off the seller’s efforts, and then cut that seller out of the equation”, it is claimed. Amazon says that it has no incentive to abuse sellers’ trust because third-party sales make up nearly 60% of its sales, a claim the committee cast doubt on.

Link to the rest at The Bookseller

A reminder that PG doesn’t always agree with everything he posts on The Passive Voice.

18 thoughts on “Amazon accused of anti-competitive practices”

  1. I have an Amazon toaster. It’s not bad. The price was reasonable. It sure works better than the old toaster did. That sucker is in toaster heaven (or, considering how it used to refuse to let go of pop-tarts, toaster hell.)

    This highlights a problem that other sellers have when competing against Amazon ON – Amazon has very high positive ratings from consumers. Thus, when they see “Amazon Toaster” they think, “hey – Amazon is a good company, I like them, their toaster is probably pretty good, they’ll stand behind it – and it’s cheap too” and they buy it.

    Competing brands are just at a severe reputational disadvantage.

    • Competing brands are at a competitive disadvantage against CRAFTMAN.
      Against COCA COLA.
      Against F-150.
      Against TESLA, SPACEX, MERCEDES, pretty much every segment leader.

      Some folks are so interested in equality of outcome they forget that competition favors excellence, not ideology.

      As for Amazon merchant services, is there anybody outside kindergarden that doesn’t know Amazon collects and uses data on everything in their ecosystem? You’d have to be pretty clueless not to understand they’re not a public utility.

      It’s not as if Amazon isn’t a known quantity, what with all the ongoing whining.
      Or that eBay, Rakuten, WalMart, and even Kroger aren’t competing with Amazon with their online marketplaces.
      The first three are even doing it successfuly, just not as well as Amazon.
      Use them accepting what they are or not at all.

      Not that rationality factors into politician posturing.
      They’ll do their worse anyway.

  2. Amazon has been accused of anti-competitive practices in a scathing report into US tech giants by Democratic politicians.

    Democrats? I think Bezos may have stepped in it. He has dems coming after Amazon on anti-trust, and republicans coming after Amazon for the Washington Post. (The truly astute can avoid instructing us on WaPo actual ownership. In this fight nobody cares.)

      • Sure. But Bezos didn’t bring that on Amazon by entering the political arena. Amazon now has problems on left and right. Bezos did that.

        • Right.
          It’s not political at all.
          It’s about being succesful without unionization, greasing palms, or kissing rings.

          • I doubt the right gives a hoot about Amazon. Bezos is their target, and they are going to hit him through Amazon.

            • The congressional whine is from the left and they’ve been after Amazon all century. And it’s just whining and posturing because they’re not actually *doing* anything. And that’s because they know there’s nothing they can do.

              The right may think whatever about Bezos himself but they understand Amazon by now goes well beyond Bezos, just as Microsoft goes beyond Gates, and Apple beyond Jobs.

              The whole focus on figurehead bilionaires is just silly; they might set policy but the day to day successes and activist irritants are structural and outside the span of control of the flag bearers.

              There are exceptions here and there (Musk, who doubles as Chief of Engineering and CEO of *privately held* SPACEX) but by and large the big tech corps are big because their corporate culture, products, and IP make them successful. Complaining about their size is complaining about tbeir competence. Which is futile and non-actionable.

              • Of course Amazon goes way beyond Bezos. Republicans know that. So what? The way to hit Bezos is to hit Amazon.

                The focus isn’t on the head of Amazon. It’s on the owner and publisher of the Washington Post. This isn’t an Oxford debate. No rules.

    • Part of the irony in this story is that I am virtually certain that the large majority of Amazon employees in the home office are very reliable supporters of the Democrats, both with votes and with political contributions.

      According to some quick and dirty Wikipedia research, the last Republican mayor of Seattle left office in 1969.

      • That didn’t help Microsoft.
        They were officially apolitical, maintaining only one part-time lawyer in their Congressional Affairs office at the time. MS employees and managers were collectively among the top Dem donors whioe the company formallyonly donated token amounts, the legal maximum, to both parties. Republicans took note of the former, dems the latter. And since the Netscape CEO was the top bundler for the Clinton campaign in California… All it took was a note to the effect.

        MS learned and now operate one of the largest lobbying operations in DC with hundreds of lawyers and IT techs providing hardware, software, and fech support to all politiciajx in range.

        Note that of the big successful tech companies, MS is the one not targeted by either party.
        No need to elaborate, right?

        They got the message and the pols got their free perks.

        After all, they are cheap to buy:

        Here’s the breakdown of Big Tech lobbying spend in the second quarter:

        Facebook: $4.8 million, down 8% from last quarter
        Amazon: $4.4 million, up 1%
        Microsoft: $2.9 million, up 22%
        Google: $1.7 million, down 6%
        Apple: $1.5 million, down 31%
        Combined lobbying spending for the five tech giants fell 4% to $15.3 million.

        Of course, that doesn’t include political contributions and brown bags.

  3. Sigh.
    The congressional report was concerned with a great deal more than Amazon’s predatory practices in their store; although it does serve as a good example of what’s happening in American business.

    For those interested, I suggest reading Matt Stoller’s work. He published a book titled ‘Goliath’ which is a revelation in and of itself- as powerful as Taibbi’s media critique in ‘Hate Inc’.

    You can see some of his work here:

    • What’s happening is the old ways are giving way to new, technology-driven ways.
      And its not just about Amazon. It’s been going on for three decades and the more the whiners fail, the shriller they get.
      And they still refuse to adapt to the new reality.
      Just watch the handwringing as the mall apocalypse is followed by the office space glut:
      (Don’t forget the comments. Espe ially the one about commutrs.)

      The underlying problem is the old elites are out of touch, the old ways are being superceded, and the companies that understand it are rewarded by the masses.

      Post-industrial is real but the successor to the industrial age isn’t what the whiners want. They might as well be fighting gravity, the tide, or trying to redefine pi as exactly 3.14.

      The future is here and it’s not theirs.

      • Just watch the handwringing as the mall apocalypse is followed by the office space glut:

        Watch the gnashing of teeth as cities no longer collect an earnings tax from the vacant desks in those downtown office buildings. Sales tax from lunches, parking garages, shopping? Parking meters? We don’t know how many branches the falling dominoes will take. But we can be confident city managers will see only one domino at a time. Then we can talk about debt service and property taxes on the vacant buildings.

        • You can’t see the future (or even the present) if all you think about is the past.

          Applies to publishing, bookselling, cars, software, gaming consoles, movie studios, internet access, manufacturing, and corporate real estate. All those and many more are being disrupted as we type and in each case the old school types trying to hold to the old says are torpedoing themselves out of short-sightedness.

          And all that ignores the looming war.
          Or even the one going on right now in the caucasus where third rate powers are fighting an entirely new kind of combat built around swarms of cheap drones, not carriers or ICBMs.

          It’s the 21st Century out there, not the 1960’s.

          It’s no longer about changing the world to suit your (dated) tastes but *surviving* the changes that have already happened and are still happening. As with the pandemic, those aware of the changes will survive and even prosper, the clueless will flounder.

          All it takes is being willing to take a half step back and looking dispasionately at what is going on in the bigger world.

          Which is something Indies have been doing for years, now, and most tradpubbers have been avoiding. Which they may no longer be able to do. The world outside has its own emergent agenda.

          Adapt or flounder.

          • I’d say the publishers have indeed looked at the bigger world of fiction. They see they have no place in it, and have chosen managed and profitable decline rather than sudden floundering. Think any of them are counting on a dramatic turn around by Barnes and Noble? Or maybe they will cut their own throats by slashing eBook prices?

            We have to remember, they set their own goals and objectives for themselves. They have no obligation to pursue some objectives presumed by the folks in the bleachers.

  4. “to coerce publishers to accept contractual terms that impose substantial penalties for promoting competition”

    So the zon making demands covering how things are sold on their virtual shelves is evil? Amazon is a store. period. The store owner gets to set the rules by which they will sell. If Hatchet and the others want things THEIR way, they should have created their own outlet to sell via.

    I actually own my own small retail store. If someone wants me to sell something in MY store, I sure as hell set the rules covering how I get to price it. It’s my product to sell once I get it into my store. I don’t care if the vendor want me to price it at $50, if I want to sell it for $25 that’s my business, not theirs so long as I’ve paid their requested price to obtain it. Amazon gets to do the same, they’re just bigger.

    • Don’t forget the obligation we all have to sacrifice for the welfare of authors who have a right to have their voices heard.

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