Amazon Is the Target of Small-Business Antitrust Campaign

From The Wall Street Journal:

Merchant groups are forming a national coalition to campaign for stricter antitrust laws, including measures they hope could force Amazon.com Inc. to spin off some of its business lines.

The effort is being launched Tuesday by trade groups that represent small hardware stores, office suppliers, booksellers, grocers and others, along with business groups from 12 cities, organizers say. Merchants plan to push their congressional representatives for stricter antitrust laws and tougher enforcement of existing ones.

The groups, which collectively represent thousands of businesses, want federal legislation that would prevent the owner of a dominant online marketplace from selling its own products in competition with other sellers, a policy that could effectively separate Amazon’s retail product business from its online marketplace.

Members of the House Antitrust Subcommittee are considering legislation along those lines as they weigh changes to U.S. antitrust law, though no bill has yet been introduced.

The merchant groups also want tougher enforcement of competition laws and legal changes that would make it easier for the government to win antitrust lawsuits against big companies.

In a statement, an Amazon spokesperson said the company’s critics “are suggesting misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience.”

“Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers,” the spokesperson added.

Members of the coalition, dubbed Small Business Rising, include the National Grocers Association, the American Booksellers Association and the Alliance for Pharmacy Compounding.

They aim to capitalize on local business owners’ connections to their hometowns by meeting with members of Congress and staff, writing letters, seeking coverage in local media, and other efforts.

“Those stories are powerful and are motivating for lawmakers,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy group that has previously partnered with unions and others to oppose what it views as excessive corporate power and spearheaded the campaign. “It’s a real business that is really going to go under with a real community that is going to suffer as a result.”

. . . .

The business owners come from different industries, but competition from Amazon is a common thread.

Doug Mrdeza, a Michigan-based merchant on Amazon’s marketplace, said he laid off close to 40 employees in late 2019 after Amazon raised his fees and struck deals with some of his suppliers to sell products itself, cutting him out of the supply chain.

David Guernsey, chief executive of Virginia-based office supplier Guernsey Inc., says government agencies are buying more on Amazon’s site, but he is wary of selling there because it would mean giving Amazon access to data on his prices, transactions and customers.

“I’ve never had a competitor that had that kind of insight to my business,” he said.

. . . .

Allison Hill, chief executive of the American Booksellers Association, said some of the group’s roughly 1,800 independent bookstores have started “sleeping with the enemy”—selling on Amazon’s marketplace—to survive.

“If a company was operating that marketplace and was not your competitor, they would be offering very different support and services,” she said.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

So what does the American Booksellers Association want its members to do – survive or die? Trying to force someone to come to your store by denying them their preferred way of purchasing books is a loser’s game.

Clamp down on Amazon, force its book prices up and you’ll see a zillion mini-Amazons springing up online, following the same recipe that made Jeff Bezos rich.

Every day, those who purchase books and everything else vote for their favorite way of purchasing goods and services. There is no standard method consumers use in making this decision that can be captured by a single style of retailer.

If PG runs out of milk at 10:00 AM, he’ll probably put together a list of other things Mrs. PG tells him he should purchase and make a grocery run at a convenient time (which he selects based on his own personal calculations and preferences and what’s happening that day) and pick up milk and a number of other items.

If PG runs out of milk at 10:00 PM, he’ll think about waiting til morning, but he’ll probably take a trip to the closest place to buy milk, purchase that and whatever candy catches his eye at the checkout counter, and get home a few minutes after he left.

Is PG going to buy milk from Amazon? He might if 1. the price was good, 2. He could get it delivered within a reasonable period of time and 3. Amazon provided some means of keeping 8 gallons of milk cold until PG used it all because there is not enough room in PG’s fridge to hold that much milk.

PG doubts that Amazon is going to try to sell him milk any time soon.

Amazon is succeeding because consumers are voting with their dollars. PG suspects that 99.9% of those who purchase books through Amazon know that there is such a thing as a physical bookstore, so knowledge of alternative ways to purchase books is widespread. They still choose Amazon.

Action to impair Amazon’s ability to sell books the way it does so successfully impacts people across the country, including:

  1. Those who live twenty miles (or more, sometimes much more) away from the nearest bookstore.
  2. Those for whom the closest bookstore is a hellhole that’s run by a nasty old man who smells like cheap cigars and doesn’t stock any books for women other than Harlequin Romances (nothing specifically against Harlequin – some intelligent people who read a lot like Harlequin, but others don’t.). The old man leers at women who buy romances (or anything else) as they wait for him to count out their change. Some women use a disposable wipe to clean their hands and their change after they get out of the store.
  3. Those who like to buy and read hardcopy books, but are on a limited budget.
  4. Those readers whose interests Barnes & Noble and its New York purchasing department don’t understand.
  5. Those who like to read books by indie authors and indie presses.
  6. Those who prefer ebooks and barfed the last time they picked up a Nook.
  7. Those who really enjoy Amazon’s ability to suggest other books they might like to read. (PS: Amazon is much, much, much better at this than any bookstore clerk anywhere with whom PG has held a conversation about book recommendations. Traditional bookstores and their low-paid employees (regardless of how pleasant they may be) are quite crude tools for book discovery compared to the Zon. The farther your tastes stray from the NYT bestseller list, the worse they are.)

6 thoughts on “Amazon Is the Target of Small-Business Antitrust Campaign”

  1. Merchant listing on Amazon.com isn’t a god given right. Or even congressionally mandated.

    If Amazon is as evil as they claim, they’ll just take names and delist their detractors.
    We’ll see soon enough just how evil they are. No need to speculate; by tbeir deeds we’ll know them.

    Reply
  2. It’s about market definition again.

    Many small businesses are monopolists — or oligopolists — in sufficiently narrow markets. Consider a community somewhere in the Midwest, where cornfields alternate with soybeans next to the highway and it’s over 100 miles to any community with more than 100,000 people… and over 40 miles to a mall that is more than 40% occupied, and even that is there only because there used to be a big corn-syrup processing center there (hint: what was the original name of the Chicago Bears?).

    Now consider the small-town pharmacy; the next-nearest one is at that mall. Care to guess how often there were actual, meaningful “sales” at that pharmacy… before Amazon started offering aspirin for home delivery, and so on?

    My point is just that it’s not “Small local business good, out-of-towners bad” here.

    Reply
    • The real point is always “change is bad for us, we need to turn back the clock”.
      Never mind that it is good for everybody.

      Reply
      • Whether change is “good for everybody” is both uncertain and irrelevant. The key is that change is going to happen, and tying everything to the “rational expectations of the parties” and “dead-hand control” starts to get into questions of whether the dowager Countess of Dunny-in-the-Woad’s fortune is fully, partially, or not entailed…

        In short, it’s about varieties of entitlement again. The very existence of the Rule in Shelley’s Case, the Rule Against Perpetuities, and the concept of “entailment” — even as they seem to fade into the past — demonstrate that.

        Reply
  3. Also, even if the booksellers managed to get Amazon out of the way, there are still websites like Abebooks (which, at least for hardcopy, has offerings as broad as and not infrequently cheaper than Amazon does.)

    Reply
  4. Amazon has EARNED most of our shopping dollars.

    I’m seriously disabled and have zero energy, and the husband doesn’t really like shopping. He DOES like doing research, reading the reviews (not just on Amazon), and then buying by price and delivery.

    We are just one of the older couples in this nation Amazon SERVES.

    It’s not perfect. I’ve gone to a retailer’s expensive site because I wanted to make sure I didn’t get a counterfeit from Amazon (no experience getting any, but I’ve heard stories… I should stop worrying). I’m not convinced it will be a place I get the right size – and I have still not managed to get, from ANYONE, socks that don’t squeeze the life out of my feet and legs, leaving marks, no matter what the ads and reviews say.

    But I can’t imagine life without Amazon any more – and no one matches their customer service, always being refined for MY convenience including returns.

    So go away, all you little stores I can’t even get into!

    Reply

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