Senator Klobuchar Advocates Against Amazon, Other Monopolies

From Publishers Weekly:

Minnesota senator Amy Klobuchar continued to make the case for stepping up antitrust actions yesterday, appearing in a webinar sponsored by the American Booksellers Association and Small Business Rising, a coalition of independent businesses advocating against monopolies.

Saying that “we can’t use duct tape and band aids anymore” in dealing with monopolies, Klobuchar noted that she and Senator Chuck Grassley (R-Iowa) had cosponsored a bill, the Merger Filing Fee Modernization Act, that will, among other things, provide $100 million to the Federal Trade Commission and the antitrust division of the Department of Justice to hire more lawyers to ensure enforcement of antitrust laws “to get the job done.”

Klobuchar said she hopes the bill will be approved by the full senate soon, since the government needs more tools in its arsenal to take on Amazon and other conglomerates. “This is all about cracking down on unfettered growth and abuse of market power,” she argued, advocating for a “reboot” of the antitrust movement in the U.S. by updating laws so as break the stranglehold of conglomerates upon the economy.

Klobuchar spoke of the negative impact of Amazon on the economy, describing it as “both a monopoly and a monopsony, because the people who sell things to Amazon don’t sell to anyone else and that is the definition of a monopsony.” She noted that “too much consolidation in concentrated markets” has a disproportionate negative impact upon “the minority community and small businesses within the minority community.”

It’s not just Amazon either, she pointed out, it’s also Facebook and Google and other Big Tech companies. Citing an email written by Facebook founder and CEO Mark Zuckerberg, in which he’d written, “We’d rather buy than compete,” Klobuchar noted, “You buy all your competitors up, you lose that competitive force” in the marketplace.

“We know the stakes are high, the facts are stark, and if we don’t act now, the curse of bigness that Supreme Court Justice Louis Brandeis once warned about will continue to threaten American innovation,” she said. “As Justice Thurgood Marshall once said of our antitrust laws, they are as important to the preservation of our free enterprise system as the Bill of Rights is to the protection of our personal freedom.”

Link to the rest at Publishers Weekly

PG wonders if Sen. Klobuchar cares about what consumers, including those living in Iowa, think about Amazon.

The reason Amazon is so big is that ordinary Americans really, really, really like buying things from Amazon. Do they have a voice in the monopoly/monopsony discussion?

Of course, consumers don’t hire Washington lobbyists and, to the best of PG’s knowledge there is no wealthy Political Action Committee that has been created by consumers that provides large campaign donations to elected officials in Washington or elsewhere.

PG doesn’t like to see any small business have financial problems, but one of the great strengths of the US economy is that it is constantly changing in response to what customers would like to have.

PG has mentioned this before, but he really, really doesn’t want to have to walk into a physical bookstore to buy a book any more. It’s just so much nicer to get what he wants from Amazon. The books are easier to find on Zon and he doesn’t have to worry about whether the store will be open or not.

Additionally, PG won’t say that he is forever swearing off of physical books, but it has been at least a couple of years, probably more, since he has bought or read from a physical book other than a couple of reference works.

PG is very happy to not have to worry about Covid when he walks out of his house these days (unless you live in PG’s neighborhood, your experience might be different), but he has been much more anxious to go to enjoyable restaurants where he and Mrs. PG can have a good conversation than he is to resume shopping trips to any locations other than a couple of grocery stores and Costco (when he needs a pallet-load of Raisin Bran or socket wrenches or some such thing).

Perhaps PG and most others will revert entirely to pre-Covid patterns of behavior, but PG doubts it.

16 thoughts on “Senator Klobuchar Advocates Against Amazon, Other Monopolies”

  1. The key point here is that Klobuchar is not calling for changing the law to the disadvantage of… whomever. The key point is that Klobuchar is calling for enough resources to be provided to the FTC and DoJ to enforce existing law. And antitrust law has been essentially unenforced, with a few rare exceptions against behavior so wrong that even second-year law students could have won the case (e.g., US v. Apple, Inc.), for a couple of decades now. What’s worse is that once there is an enforcement action, there’s no follow-up afterward, or against parallel misconduct.

    Which is a different kind of problem, because lawyers — and especially antitrust lawyers who forget the ideology behind the Chicago School (or, for the young’uns, never knew it; I’m old enough to remember the Saturday Night Massacre, and there’s a direct connection) — are, umm, not adept at understanding either technology, and its implications, or actually explaining to nonlawyers why they should believe the lawyers and not their own lyin’ eyes (and bank accounts).

  2. Whenever the talk of monopoly in relation to books comes up I fail to see the name “Bowker” anywhere in the conversation.

    ISBN’s are free or very cheap in every other country on earth, yet here in the USA we are charged over a hundred dollars for a single number, one that is produced with a click of a mouse. We can argue about Amazon all day, but surely Bowker fits the definition of a monopoly, does it not?

    Why is that?

    • A stupid long-term contract signed under dubious circumstances.

      Technically, Bowker is not an example of a market-based monopoly; it is a government delegation of a purported “natural monopoly,” similar to the way “distribution of fresh water” gets delegated to a public-utility company in most of the country. Or the way that “cable TV” used to be, which should by itself give one pause regarding a “mere” public allocation and application of unique identifiers.

      One might well ask questions such as cui bono? regarding the long-term contract, and how it has been isolated from further inquiry. One might also ponder the buggywhip problem, and whether the ISBN constitutes a legal protection for buggywhip manufacturers.

  3. You’d think a senator would know the meaning of ‘monopoly.’

    Amazon isn’t perfect – but we get most of our purchases from there because they make it easy.

    Period.

    End of story.

    Everything else is harder. By a lot.

    Disclaimer: one of my children works for Amazon (that doesn’t help in any way, nor alter my opinion, and he’s not on the retail side).

    • To slightly defend Senator Klobuchar, she’s fighting against a century of the press being unable to spell “oligopoly” and not understanding the distinction between “monopoly” and “monopsony” (interestingly, there isn’t really any use of “oligopsony” in the scholarly literature). If one is feeling particularly cynical on Monday morning, one might wonder whether the media barons of old — or of today — found/find it in their best interests to evade the entire question of “oligopoly.”

      One big problem is that pointing just at “Amazon” is incomplete, whether on the “retail side” or not. One of my children used to work for Amazon on non-retail matters, and Amazon is up against monopolies/oligopolies in other services; just consider getting communications lines and equipment into the warehouses so orders can be filled… As Terry Pratchett might have said, “It’s monopolies all the way down,” because the truly local retail business became a creature of mythology (and hand-waving rhetorical distraction) by around 1925. Even before Hawley and Smoot made people aware of it.

  4. I bought a microphone from Amazon this morning. Where the hell else was I supposed to buy it for the price I paid and the convenience of not having to drive an hour round trip.

  5. Ignoring the monopoly issues, I am attracted to PG’s idea of avoiding brick and mortar bookstores. I’m in Canada, and we have Chapters/Indigo as our main “big bookstore”, Coles was absorbed by them long ago, a few others, and then local bookstores facing the same issues of location, overhead and sales as every other retailer on the planet.

    But I also have a 12yo son. Last year, after the first wave had abated, and stores were allowed to re-open, we asked him what he was missing, and his first response was the ability to go…wait for it…to a restaurant. He is a voracious reader, we go to bookstores to get stuff all the time, we get Amazon deliveries, he consumes series all over the place. Our greatest pride as parents is we “raised a reader”. Yet he doesn’t generally care if he goes back to a store, he just cares if he gets the book somehow. If it’s #2 in the series, and he just finished #1 and decided he wants to continue, then he cares. Amazon takes 2d (or longer right now in Canada), the store is 2h.

    However, the classic example of what a bookstore offers was what we embraced last June after Wave 1. Yes, he got his restaurant outing on a patio, but we also went to Chapters, went into the teen section, and was asked by a sales associate if we wanted any help. Generally, we’re like, “no, go away” (albeit more politely, we are Canadian after all). My wife even said, “No, thank you, I think we’re good….” before I jumped in.

    I said, “Actually, maybe this time you can help us.” I then turned it into a full production of telling them that we were looking for new books and asking for suggestions. Jacob told them what he liked currently, which series he had tried, etc., and he gave us numerous suggestions. He then pulled in another associate who was about 19 (he was about 30), who was a true expert on the age group and what was appropriate for the pre-teen set (an important consideration when someone online suggests a certain popular series is like Harry Potter-lite with more dating angst, until the characters have oral sex in Chapter Two of the book…not exactly HP, me thinks). So she was up on all the danger areas to watch for, totally worked with him to get some ideas of types of things to try. It was about a 30-minute “we need to talk to PEOPLE other than each other” outing that allowed us to tap into a full conversation with people working in that section who knew the books. I can’t do that directly at Amazon. I can use GoodReads, lots of online fora, etc., but not the “I have cash in hand ready to spend, I need you to tell which books to buy” experience.

    We bought about 8 books I think? And 4 of them were starts of series that we went back and filled in the rest of the series over time. Their prices are often a bit higher than Amazon, AND I have to go in person, but their website is improving. Sometimes their price is lower, but they aren’t always as forthcoming on shipping as they don’t offer a Prime-like membership option.

    I rarely lament the closing of a bookstore other than it was a place I used to go. I don’t ascribe to the theory that Amazon is magical, but I do like who they hire (a lot more diverse workforce in their warehouses than other places) and I love their embracement of always trying to make their purchases super simple.

    Yet when we had need of an outing, the bricks and mortar bookstore was where we went for our retail therapy. We could have just as easily got the 16-yo associate who says, “I don’t know dude, I just stock the books, I don’t read them”, but instead, we had that throwback experience. Knowledgeable helpful people selling us what we needed, not just what we asked for.

    I wonder if I can buy them an Amazon gift card to thank them…

    Paul

    • Paul – Children are a definite exception to my avoid-physical-bookstores behavioral habits.

      When one or more of the younger of my offspring is visiting, a trip to a physical bookstore is a likely happening. As with many other things, bookstores are still pretty new to children. Children are also more likely to value something tangible instead of electronic words on a screen. And, invariably, they walk out of the bookstore with one or more physical objects in their hand, courtesy of me or the other person of a certain age with whom I happily reside.

      Even for me, looking at children’s books is more interesting than looking at adult books (other than those devoted to showing illustrations of photography or art).

      • Oddly enough, I also tend to order from bricks and mortar more if it’s a gift. We have a standard “purchase” for new parents, Sandra Boynton books, a small collection of 4 or 8 books that we and our son loved long ago. We’ll never part with ours, so we find a bundle to give. I wonder if, like with your wee ones visiting, if it seems less “transactional” and therefore more likely to be an outing to remember.

        I should have also noted though that I try NOT to do too many paper anymore, I just don’t have the space. 🙂

        P.

  6. Politicians posturing. Nothing more.
    Yes, enforcing existing comptition laws would help…some.

    But it isn’t antitrust law that is inadequate to the 21st century business environment, it is the whole antitrust mindset from its founding principles up. The entire concept is based on tbe view of consumers as uninformed drones with no agency over tbeir choices. Antitrust has no way to deal with network effects and consumer “stampedes” towards excellence. None is on the horizon.

    Now, specific instances of anti-competitive behavior can be singled out and dealt with (the Agency conspiracy, for example) but tbose aren’t the things the pos are posturing about. They are handwringing about “gigantism”, about companies being too successful, about entrenched campaign contributors not being able to keep up with smart and nimble players. They are focusing on the wrong things for the wrong reasons.

    Yes, all four of the so-called “big tech” companies should be called on the carpet but it should be for things that hurt consumers not for being smarter than the average bear.

    Right now the worst thing that could happen in for these IdiotPoliticians™ actually succeeding in “reining in” big companies for being big. Just consider the proposal to ban the purchase of “competitors”:

    First, most companies being picked up are wannabes and struggling, to start with. Otherwise, if they were truly competing successfully they wouldn’t sell out. (Look at Microsoft buying NUANCE but failing to buy DISCORD. 15 years ago they tried to buy NETFLIX while they were primarily a DVD by mail operation. No amount of money got the job done.)

    Second, most purchases are startups, build around a nascent product, service, or feature. Dirty secret of startups: a plurality of startups, especially in tbe tech sector, are founded with an eye to selling out to start with. It’s the path to maximizing the return on an idea or innovation. Another big group of them are only funded by the venture capitalists because selling out is an exit strategy if the startup doesn’t set the world on fire. (A lot is made of Amazon buying Diapers.com but not enough that it was burning investor cash faster than it grew its customer base. It was a failing so they sold out and failed even with Amazon behind it. No mention is made of the declining fertility rate of millennials.)

    Third, no mention is made tbat all the big companies and deep pocket billionaires have venture capital arms as side bets and new business incubators. Which is where the bulk of the purchases come from.

    Now how is antitrust industrial era thinking going to deal with that?
    Or the wave of megabusiness ($20-30B+ a year) are emerging with no meaningful competition possible? (A whole big story right there: a couple of monopolies, maybe a duopoly or oligopoly or two.)
    Forbidding people to be smart and entrepreneurial?

    They wring their hands but have no meaningful options other than another wave of “windfall profits taxes” that will get passed on to customers. Just a bit extra inflation to the wave already coming with Stagflation 2.0.

    Don’t forget all these big companies have armies of lobbyists and bought legislators.
    They’re not going to let that investment go unused.
    Amazon in particular is golden after four years of the WP fighting the previous administration. Friends of the party get…consideration:

    SpaceX won NASA’s new lunar lander contract by being way better, further along in development, and cheaper (because tbey’re alreading developing a similar vehicle so they can eat half the cost). Within an hour Bezos picked up a phone, issued a contract protest, freezing the lunar initiative, and “suprisingly” the senator from Boeing submitted a budget amendment, commiting NASA to gIve $10B to the almost winners (but not allocating any extra funding to pay for the mandate). It already passed the senate.

    https://marketrealist.com/p/did-jeff-bezos-get-bailout-money/

    The pols will posture and yell but come voting time…nothing.
    Nothing meaningful will happen.

    At most, Amazon will get a “tough scolding” and Facebook a slap on the wrist fine. Apple as a three time offender might face a meaningful fine. Only Google faces “meaningful” regulation because they helped China with AI but refused to provide the same tech to the DOD. No amount of lobbying will help hide tbeir China ties. But even then tbey’ll roll merrily along. (As lobg as a shooting war doesn’t break out.)

  7. Here’s the view from a very *progressive* tech site, listing the bills and what they pretend to achieve if they ever were to pass:

    https://www.cnet.com/news/what-proposed-antitrust-legislation-could-mean-for-big-tech-and-you/

    Note tbat nowhere do they say “Amazon-only” or “Apple” only.

    As presented the same attacks would hit Walmart, Target, BestBuy, the ghost of Sears and KMart, even Home Depot and, say, Krogers. Sony, Nintendo, Netflix, and even Disney. Everybody with a house brand and proprietary products and Walled Gardens. And all of SiliValley.

    A better name would be the “lobbyist full employment act”.

    • Snort! cnet? progressive? Felix, you’re using that word, but I don’t think it means what you think it does. If cnet was progressive, its idea of a “budget” laptop, as epitomized in a review published today, would not have a list price of $870 (marked down to $680), with specs above those actually stocked at any Walmart. If cnet was progressive, it wouldn’t censor my comments every time I complain that reviewers are assuming that anyone who “works with/in technology” can afford to upgrade to the best and shiniest stuff every nine months.

      Don’t assume that “based in San Francisco” means “progressive/liberal leaning” — it’s one of the most establishment-leaning cities I’ve lived in (including London), it’s just that the definition of “establishment” is slightly warped.

      • The editorial staff toes the woke party line: that’s “progressive” enough for me.
        They only cover certain things that meet their bias and ignore the rest, things like Apple’s antitrust failings, which they still defend as necessary to “stand up to Amazon”.

        You do know they were sold off last year, at which point the tech content went down and the “cultural” and PR went up? They were part of tbe ongoing VIACOMCBS triage.

        https://techcrunch.com/2020/09/14/red-ventures-acquires-cnet-media-group-from-viacomcbs-for-500m/#:~:text=CBS%2C%20prior%20to%20being%20combined%20with%20Viacom%2C%20originally,to%20create%20much%20more%20reach%20into%20online%20media.

        They no longer censor comments; they recently shut them down because techies were pushing back against the official party line. If it walks like a duck…
        (shrug)

        • Felix, they censored one of those comments from me less than a month ago. So “they no longer censor comments” (and censorship is not a progressive value, however often some people who are otherwise labelled “progressives” screw up and do it) isn’t accurate.

          Ownership by Red Ventures doesn’t exactly give this progressive warm fuzzies. No organization with that many buzzwords and that little actual content in its self-description qualifies as “progressive.” Then there’s the reading-between-the-lines of top management’s bios, which screams “establishmentRus” (example: you don’t get to be a partner at King & Spalding, or associate counsel at Qualcomm, otherwise). And when your CEO sues over ‘defective’ doors and windows in a $16M mansion (at North Carolina prices), I can only conclude that the “red” refers to “Red State” and not commie pinko.

          And this is more than far enough off topic, so I’ll leave it here: Calling CNET “progressive” is not accurate.

          • They don’t censor because they don’t allow comments on anything mraningful.
            You can’t censor what can’t be submitted.
            Details, right?

            But yes, off topic.
            My bad.

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