That would be like showing up for the battle of Kursk with an M18 battalion. Might go well at first, you might score some big flashy wins, but....ugh... things are gonna get worse as the party goes on and it's generally an ill advised strategy.
Rico as written and enforced walks right up to the limit of constitutionality in a dozen ways. It's built for speed. It's never really been thrown into a knock down drag out legal action between titans on equal footing (i.e. a bigco legal team, potentially helped by other bigcos). It might survive nominally but it probably won't come out the other end in serviceable condition. You might win a few but eventually an appeal will find its target and end your day.
I say go for it. Heads I win. Tails you get RICO reform.
It's odd that this is a request for a preliminary injunction considering that the case is almost four years old. Both the 2022 and the new filing are heavily censored[1][2], so I can't know for sure, but I didn't notice any revelation in the latest filing. Amazon requires that anyone selling through their platform not offer lower prices elsewhere online. If a seller does so, they'll be relegated to the "New & pre-owned" offers section below the "Add to cart" & "Buy it now" buttons. This has been the case since at least 2019. (This also means that if you're shopping on Amazon and want a better deal, you should check the other offers section for a cheaper price.)
Lots of retailers (both physical & online) have similar requirements, and many manufacturers have similar requirements for minimum advertised prices (such as Apple). I think the California AG's plan is to argue that the pricing rules combined with Amazon's large market share merit a judgement against them, but it's going to be an uphill battle to single out one company for practices that are common to the industry.
> Lots of retailers (both physical & online) have similar requirements
My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary.
> many manufacturers have similar requirements
That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.
Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?
In the long run it is bad for consumers. If you sell widgets on amazon for $10, and amazon charges $2 or whatever, you pocket $8. Maybe you also want to sell your widgets on your own site where your overhead is only $1. The "most favored customer" clause prevents you from passing that savings on to the customer and charging $9 on your site (or any marketplace where you might prefer to sell things compared to amazon). It promotes stasis or growth of large sellers and prevents new ones from offering price competition.
> Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price
The original wording was
>Amazon requires that anyone selling through their platform not offer lower prices elsewhere online.
which means if the seller offers to sell something on amazon for $x, but has a shopify site selling it for < $x, then that seller will get deranked. That's not the same thing as the lowest price, because it's possible that other sellers sell for higher prices, and some people might not find whatever obscure shopify site that has the lowest price.
The wording is admittedly ambiguous, but the fact that there are totally overpriced items available on amazon suggests amazon isn't deranking people just because it's not the best price on the internet.
If you've ever seen those "Click To Reveal Price" or "Price Only Revealed At Checkout" products online, this here is one reason why. They help businesses keep discounted prices hidden from Amazon's crawlers.
This can also be true if the manufacturer of the product requires that retailers not offer a price below a certain amount. This is called the minimum advertised price (MAP) and is common for big brands like Apple. Another way to get around the minimum advertised price is to bundle the product with some other product or service, such as is done with cell phone contracts.
And what's really stupid about this is that done openly there probably wouldn't be an issue. Insurance companies can demand providers charge them the lowest rate they charge anyone. Would there have been any issue if Amazon had simply said that to get those features you must match any deals you give anyone else?
If Amazon punishes sellers for having lower prices elsewhere, isn’t it the sellers choice whether to lower their price on Amazon OR raise their price for other sellers?
I didn’t see anything in the article suggesting Amazon ask for the 2nd option, just examples of sellers who did the 2nd one.
We need all new antitrust laws. The size of these companies is itself a problem. They have so much power that there is no possibility for fair competition. Maybe we can start by taxing companies that are worth more than 1 trillion at an extremely high rate.
Luckily, Lina Khan has just announced The Center for Law and the Economy at Columbia University, which is going to be training the next generation of antitrust lawyers for the US. If we are lucky, she will also be working on much bigger things than that at the same time. If we are doubly lucky, she will be training hundreds of new lawyers as good as she is.
I wonder who would prosecute them. What about an AG who, when confronted about doing a bad job, deflects by pointing out that Nasdaq is "smashing records?"
I'd be in favor of giving Lina Khan a lifetime appointment to heading the FTC along with 10x their current budget to tackle exactly this problem.
A major part of the problem isn't even that we don't have laws on the books, it's that funding to the enforcement agencies has been gutted to the point where they can mostly just go after extreme egregious violations or very easy to win cases. The IRS is in exactly the same boat.
That would be great, but I think even her job needs new laws. Otherwise, one of the problems is even hardcore enforcement takes years and huge amounts of taxpayer expense. We need to make it simple, cheap, and quick to improve competition.
That's fascinating. Bork was denied being on the supreme court but his ideas shaped current antitrust laws. It feels a bit like the old Standard Oil argument: It's ok to have a huge market share so long as pricing for goods gets cheaper even if it hurts competition overall. *edited* for grammar.
Yeah. Heather Cox Richardson was arguing about this today, saying that historically the job of the government was to decide that cheaper but gutting a local economy, or cheaper but taking enough market share to be able to heavily raise prices in the future was bad. But due to Bork that capacity of the government to actually help drive good outcomes for the bulk of the population has been gutted.
How is this not a complete violation of anti-trust laws? If the federal government won't pursue it (questionable in this environment), surely there's more than enough to go after it state-by-state.
And can't we do a class-action lawsuit against Amazon at this point?
The entire use case of dynamic pricing is to raise prices.
Airlines were really the first to do this but there it kinda makes sense. You have a plane. It's going anyway. You want to fill it.
At the other extreme is RealPage, which is explicitly designed to raise rents and it's used by enough people that you can view it as the last frontier of anti-trust, anticompetitive behavior and price-fixing. It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it.
That's another aspect to this: collusion doesn't happen in dark smoke-filled rooms anymore. It can be as simple as all "competitors" simply using the same software, which tells them all to do the same thing.
Another commenter had it right: this is beyond antitrust or competition law. It's a RICO issue.
There's no real structural reason for inflation since the pandemic. The pandemic simply broke the seal on raising prices and now everybody is in on it.
At this point, Antitrust law is no longer the right statute for prosecution.
RICO is.
https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
Seems like that's just for protesters.
clears throat
Radical leftist lunatic antifa terrorists that want to see this country DESTROYED!!
Antitrust = Antifa = Communism
As opposed to Most Favored Monopoly contracts, which are glorious Capitalism.
Know the difference!
>Under the law, the meaning of racketeering activity is set out at 18 U.S.C. § 1961. As currently amended, it includes:
It lists plenty of crimes, but anti-trust violations isn't one of them.
Also, obligatory https://web.archive.org/web/20170301062028/https://www.popeh...
See specifically sections "Wait. Isn't the defendant the enterprise?" and "So what's "racketeering activity"?"
"It's never RICO"--Popehat
That would be like showing up for the battle of Kursk with an M18 battalion. Might go well at first, you might score some big flashy wins, but....ugh... things are gonna get worse as the party goes on and it's generally an ill advised strategy.
Rico as written and enforced walks right up to the limit of constitutionality in a dozen ways. It's built for speed. It's never really been thrown into a knock down drag out legal action between titans on equal footing (i.e. a bigco legal team, potentially helped by other bigcos). It might survive nominally but it probably won't come out the other end in serviceable condition. You might win a few but eventually an appeal will find its target and end your day.
I say go for it. Heads I win. Tails you get RICO reform.
I’d be ok with civil asset forfeiture for corporate officers
Anything trying to protect consumer rights at the federal level risks getting shut down during a future Republican administration.
It's odd that this is a request for a preliminary injunction considering that the case is almost four years old. Both the 2022 and the new filing are heavily censored[1][2], so I can't know for sure, but I didn't notice any revelation in the latest filing. Amazon requires that anyone selling through their platform not offer lower prices elsewhere online. If a seller does so, they'll be relegated to the "New & pre-owned" offers section below the "Add to cart" & "Buy it now" buttons. This has been the case since at least 2019. (This also means that if you're shopping on Amazon and want a better deal, you should check the other offers section for a cheaper price.)
Lots of retailers (both physical & online) have similar requirements, and many manufacturers have similar requirements for minimum advertised prices (such as Apple). I think the California AG's plan is to argue that the pricing rules combined with Amazon's large market share merit a judgement against them, but it's going to be an uphill battle to single out one company for practices that are common to the industry.
1. https://oag.ca.gov/system/files/attachments/press-docs/2022-...
2. https://oag.ca.gov/system/files/attachments/press-docs/REDAC...
> Lots of retailers (both physical & online) have similar requirements
My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary.
> many manufacturers have similar requirements
That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.
Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?
In the long run it is bad for consumers. If you sell widgets on amazon for $10, and amazon charges $2 or whatever, you pocket $8. Maybe you also want to sell your widgets on your own site where your overhead is only $1. The "most favored customer" clause prevents you from passing that savings on to the customer and charging $9 on your site (or any marketplace where you might prefer to sell things compared to amazon). It promotes stasis or growth of large sellers and prevents new ones from offering price competition.
> Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price
The original wording was
>Amazon requires that anyone selling through their platform not offer lower prices elsewhere online.
which means if the seller offers to sell something on amazon for $x, but has a shopify site selling it for < $x, then that seller will get deranked. That's not the same thing as the lowest price, because it's possible that other sellers sell for higher prices, and some people might not find whatever obscure shopify site that has the lowest price.
The wording is admittedly ambiguous, but the fact that there are totally overpriced items available on amazon suggests amazon isn't deranking people just because it's not the best price on the internet.
It would expose distributors who are getting better deals than others when they can undercut the competition.
If you've ever seen those "Click To Reveal Price" or "Price Only Revealed At Checkout" products online, this here is one reason why. They help businesses keep discounted prices hidden from Amazon's crawlers.
This can also be true if the manufacturer of the product requires that retailers not offer a price below a certain amount. This is called the minimum advertised price (MAP) and is common for big brands like Apple. Another way to get around the minimum advertised price is to bundle the product with some other product or service, such as is done with cell phone contracts.
Blame the manufacturer for this, not the reseller.
Is it effective, like, at all?
And what's really stupid about this is that done openly there probably wouldn't be an issue. Insurance companies can demand providers charge them the lowest rate they charge anyone. Would there have been any issue if Amazon had simply said that to get those features you must match any deals you give anyone else?
Amazon would be smart to settle with no admission of wrongdoing and an agreement to seal documents lest every other state end up following suit.
The documents can be subpoenaed for a new proceeding from the source.
If Amazon punishes sellers for having lower prices elsewhere, isn’t it the sellers choice whether to lower their price on Amazon OR raise their price for other sellers?
I didn’t see anything in the article suggesting Amazon ask for the 2nd option, just examples of sellers who did the 2nd one.
We need all new antitrust laws. The size of these companies is itself a problem. They have so much power that there is no possibility for fair competition. Maybe we can start by taxing companies that are worth more than 1 trillion at an extremely high rate.
Luckily, Lina Khan has just announced The Center for Law and the Economy at Columbia University, which is going to be training the next generation of antitrust lawyers for the US. If we are lucky, she will also be working on much bigger things than that at the same time. If we are doubly lucky, she will be training hundreds of new lawyers as good as she is.
I wonder who would prosecute them. What about an AG who, when confronted about doing a bad job, deflects by pointing out that Nasdaq is "smashing records?"
I'd be in favor of giving Lina Khan a lifetime appointment to heading the FTC along with 10x their current budget to tackle exactly this problem.
A major part of the problem isn't even that we don't have laws on the books, it's that funding to the enforcement agencies has been gutted to the point where they can mostly just go after extreme egregious violations or very easy to win cases. The IRS is in exactly the same boat.
That would be great, but I think even her job needs new laws. Otherwise, one of the problems is even hardcore enforcement takes years and huge amounts of taxpayer expense. We need to make it simple, cheap, and quick to improve competition.
I don't disagree. I think she's about the perfect person to be involved in writing those new laws in some fashion.
Unsurprising
Did Amazon think they were too big to convict?
I wonder if they will meet the fate of Standard Oil, back in the day.
No, Antitrust law was effectively neutered by the Chicago School and their agent Robert Bork.
https://www.theamericanconservative.com/robert-borks-america...
(BTW that source is right-wing and can hardly be said to be biased against Bork).
That's fascinating. Bork was denied being on the supreme court but his ideas shaped current antitrust laws. It feels a bit like the old Standard Oil argument: It's ok to have a huge market share so long as pricing for goods gets cheaper even if it hurts competition overall. *edited* for grammar.
Yeah. Heather Cox Richardson was arguing about this today, saying that historically the job of the government was to decide that cheaper but gutting a local economy, or cheaper but taking enough market share to be able to heavily raise prices in the future was bad. But due to Bork that capacity of the government to actually help drive good outcomes for the bulk of the population has been gutted.
How is this not a complete violation of anti-trust laws? If the federal government won't pursue it (questionable in this environment), surely there's more than enough to go after it state-by-state.
And can't we do a class-action lawsuit against Amazon at this point?
The entire use case of dynamic pricing is to raise prices.
Airlines were really the first to do this but there it kinda makes sense. You have a plane. It's going anyway. You want to fill it.
At the other extreme is RealPage, which is explicitly designed to raise rents and it's used by enough people that you can view it as the last frontier of anti-trust, anticompetitive behavior and price-fixing. It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it.
That's another aspect to this: collusion doesn't happen in dark smoke-filled rooms anymore. It can be as simple as all "competitors" simply using the same software, which tells them all to do the same thing.
Another commenter had it right: this is beyond antitrust or competition law. It's a RICO issue.
There's no real structural reason for inflation since the pandemic. The pandemic simply broke the seal on raising prices and now everybody is in on it.
> It's also state-sanctioned violence because your price-fixing scheme has the threat of you being homeless attached to it.
Explain "violence", please.