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Amazon's Antitrust Paradox

116 点作者 urs超过 8 年前

12 条评论

Booktrope超过 8 年前
This article repeats the canard that Amazon has been selling ebooks at a &quot;loss&quot;, using this as a key example for its thesis. In actuality, Amazon wanted to discount ebooks, but the big publishers wanted no discounts so they could maintain ebook prices higher than paperbacks generally. Take the example in the article, where the publisher set an ebook price at $12.99. The standard publishing contract required a retailer to pay the publishing company about 50% of this amount, or about $6.50. Amazon paid approximately this royalty, and retailed for $9.99, making a gross profit of about $3.49 per unit. This is clearly not selling the item at a loss. The author of the article, claiming to be an expert on business, thinks that any discount from list price is selling at a loss - in other words, the article author, who claims to propose a better way to approach a fundamental part of business law (antitrust) doesn&#x27;t understand the first thing about retail business. Discounts are not selling at a loss, unless the retailer sells for less than its cost.<p>I suppose you could try to make some argument that it cost Amazon more than $3.50 a ebook over and above the cost of the product itself, but the author makes no effort to do so. And Amazon clearly has not been selling its products below cost generally, though in a business of its size, of course its likely that there are some exceptions. Consider, if Amazon really was selling books and other products below its cost, losing money on each transaction, where would the money come from to invest in all the new businesses like AWS, production of films and TV shows, etc, that the article&#x27;s author thinks are such a problem?<p>So here&#x27;s a proposal for a &quot;better&quot; idea for antitrust law based on an article demonstrating lack of understanding of the first thing about business.
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sosuke超过 8 年前
I don&#x27;t understand the argument that they don&#x27;t profit. All of their people get their pay. Instead of sitting on giant piles of cash they use it all to invest in more stuff. That sounds like a great idea!<p>I never understand it when I hear such and such company has billions of dollars of cash just sitting around. If they spent that money wouldn&#x27;t that help themselves and the economy?<p>Truly I am no economist.<p>Edit: I kept reading and I have to stop. I have too many counter arguments to each paragraph and I know I&#x27;m missing some larger picture they want to paint because of it. Without a significant investment of time which they&#x27;ve obviously devoted. I feel like they just really want to have an anti-trust lawsuit and are trying to fit the argument to available companies.
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chx超过 8 年前
Reminder: <a href="http:&#x2F;&#x2F;www.slate.com&#x2F;blogs&#x2F;moneybox&#x2F;2013&#x2F;01&#x2F;29&#x2F;amazon_q4_profits_fall_45_percent.html" rel="nofollow">http:&#x2F;&#x2F;www.slate.com&#x2F;blogs&#x2F;moneybox&#x2F;2013&#x2F;01&#x2F;29&#x2F;amazon_q4_pro...</a><p>&gt; That&#x27;s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don&#x27;t even buy anything from Amazon.
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msandford超过 8 年前
The idea that Amazon isn&#x27;t profitable is laughable at best. Examine what they&#x27;re doing. If they stopped constantly creating new business divisions they&#x27;d be super profitable. They continue to invest in new businesses, though, so on the whole they&#x27;re &quot;unprofitable&quot; on a cashflow basis. On a sales basis though? Immensely profitable.<p>Just because Amazon has ideas about how to reinvest doesn&#x27;t mean they&#x27;re only breaking even on their sales or selling at a loss. Starting new businesses every year costs money. Amazon might not have balance sheet profits but the company continues to grow. How could they do that if they were making a loss on everything? They aren&#x27;t issuing anywhere NEAR enough shares to keep the loss-leader scheme going on investor money: <a href="https:&#x2F;&#x2F;ycharts.com&#x2F;companies&#x2F;AMZN&#x2F;shares_outstanding" rel="nofollow">https:&#x2F;&#x2F;ycharts.com&#x2F;companies&#x2F;AMZN&#x2F;shares_outstanding</a>
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Animats超过 8 年前
Amazon achieved dominant market share more or less legitimately. It wasn&#x27;t done by merger. It was done competing with bigger competitors, including WalMart and Sears. (Sears should have been huge in online commerce. They were once the biggest name in mail order. They blew it.)<p>There&#x27;s no public utility type monopoly with Amazon, compared to Comcast and AT&amp;T, who have wires and poles. It wasn&#x27;t done by selling at a heavy loss, like Uber. Amazon runs close to break-even, while building and operating expensive physical assets.<p>The author is arguing that the old pre-Chicago School antitrust theory should be revived to protect Amazon&#x27;s suppliers. Yet WalMart is much more heavy-handed in that area. They continually squeeze suppliers to cut their prices. Amazon squeezed booksellers hard to get them to provide e-books, but outside of that, Amazon is usually content to let their suppliers set prices and let them compete with each other. Amazon doesn&#x27;t have a shelf space constraint in the way that WalMart does.<p>There&#x27;s a need for stronger antitrust enforcement in communications services and pharmaceuticals. They have real monopoly power. But Amazon? Probably not.
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oli5679超过 8 年前
I think you have to have a really high standard of evidence for predation, because the cost of intervention to adress false positives (efficient firms undercutting incumbents) is so expensive. Think about the short run consumer harm that would be caused by Uber, YouTube, Southwest, Walmart or Amazon being restricted to charging higher prices. You have to be sure that the prevented predation is sufficiently risky. In all cases incumbents have made predation claims. No price hikes have materialised so far in any of the markets.
fiatjaf超过 8 年前
Ok, 20 years of sheer monopoly and yet Amazon can&#x27;t raise its prices or it will be beaten by other, more specific, retailers, Google and Microsoft. The case for antitrust law and State action should fall apart now.<p><a href="https:&#x2F;&#x2F;mises.org&#x2F;library&#x2F;anti-trust-anti-truth" rel="nofollow">https:&#x2F;&#x2F;mises.org&#x2F;library&#x2F;anti-trust-anti-truth</a>
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threepipeproblm超过 8 年前
TLDR: Amazon doesn&#x27;t meet the definition of harm that has always been used in antitrust. Since they clearly need to be punished for their success we should expand the definition of harm to include whatever they are doing.
koga-ninja超过 8 年前
I wonder what Amazon&#x27;s exit plan is. At what sum of Money would they shut their doors.<p>I know they are publically traded, but every successful Company has a mission statement of sorts.
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djyaz1200超过 8 年前
What this really is that Amazon is boot stomping their competitors so hard that they are positioning for the government to step in and break up the fight.
gthtjtkt超过 8 年前
I feel like we&#x27;re already starting to see the effects of Amazon&#x27;s attempts to become profitable.<p>Their customer service has certainly gone down the drain, and their whole website is littered with cheap garbage from Alibaba.<p>To me, it looks like they pulled the typical bait-and-switch we see every day with mobile apps: Offer something great for free. Then, once you&#x27;ve cornered the market, start squeezing every penny out of your users and cutting corners everywhere.
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yeslibertarian超过 8 年前
There&#x27;s no paradox in Amazon. The antitrust law makes no sense. The people will decide collectively and distributedly (= the market, a p2p network) if they like Amazon or not. There is a conceptual error in the idea of needing the government to interfere the market with these antitrust laws.
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