Antitrust Issues? Amazon Pressured Sellers Offering Cheaper Prices on Walmart.com (bloomberg.com) 45
"Amazon's determination to offer shoppers the best deals is prompting merchants selling products on its marketplace to raise their prices on competing websites," reports Bloomberg:
Amazon constantly scans rivals' prices to see if they're lower. When it discovers a product is cheaper on, say, Walmart.com, Amazon alerts the company selling the item and then makes the product harder to find and buy on its own marketplace -- effectively penalizing the merchant. In many cases, the merchant opts to raise the price on the rival site rather than risk losing sales on Amazon.
Pricing alerts reviewed by Bloomberg show Amazon doesn't explicitly tell sellers to raise prices on other sites, and the goal may be to push them to lower their prices on Amazon. But in interviews, merchants say they're so hemmed in by rising costs levied by Amazon and reliant on sales on its marketplace, that they're more likely to raise their prices elsewhere.
Antitrust experts say the Amazon policy is likely to attract scrutiny from Congress and the Federal Trade Commission, which recently took over jurisdiction of the Seattle-based company.
An analyst specializing in antitrust litigation tells Bloomberg that the policy "could end up being considered illegal conduct because people who prefer to shop on Walmart end up having to pay a higher price."
Pricing alerts reviewed by Bloomberg show Amazon doesn't explicitly tell sellers to raise prices on other sites, and the goal may be to push them to lower their prices on Amazon. But in interviews, merchants say they're so hemmed in by rising costs levied by Amazon and reliant on sales on its marketplace, that they're more likely to raise their prices elsewhere.
Antitrust experts say the Amazon policy is likely to attract scrutiny from Congress and the Federal Trade Commission, which recently took over jurisdiction of the Seattle-based company.
An analyst specializing in antitrust litigation tells Bloomberg that the policy "could end up being considered illegal conduct because people who prefer to shop on Walmart end up having to pay a higher price."
Then they are like me (Score:2)
"Amazon constantly scans rivals' prices to see if they're lower. "
At all the shops claiming that they will beat any price by their competitors, I check those prices and get them to match them.
It's the most perfect thing to do.
Otherwise, people would run all over the place to get their stuff.
Re:Then they are like me (Score:4, Insightful)
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It was the best of analogies, It was the worst of analogies.
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Re: Then they are like me (Score:2)
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Seller-fulfilled offers on Amazon (Score:2)
The mall does not ship and receive product stores
Many sellers on Amazon do their own fulfillment instead of using FBA, particularly those that don't offer Prime. Yet the price parity policy applies to self-fulfilled sellers as well.
Amazon is the store. They sell the product. They guarantee the product.
Amazon is still a platform. It just happens to be a platform that processes payment and enforces a return policy on sellers, both of which PayPal also does. The biggest difference is that Amazon also organizes multiple sellers' offers for the same product. But then eBay, which used to own PayPal, also organizes listings for a p
Re: Seller-fulfilled offers on Amazon (Score:2)
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I acknowledge that Amazon's brick-and-mortar retail presence exists. That doesn't make it quite as relevant as some may think.
The difference is that Walmart is more famous for its brick-and-mortar locations than for its web store, whereas vice versa for Amazon. Whole Foods Market, Amazon's grocery chain, has 500 locations in the USA and Britain (source [wholefoodsmarket.com]), whereas Walmart and Sam's Club have 5,300 in the USA alone. So I'm pretty sure that a far larger fraction of the United States population is within cycling
Re: Seller-fulfilled offers on Amazon (Score:1)
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It doesn't look like antitrust though.
* Walmart has has similar price demands forever
* Amazon is very far from a monopoly - they're smaller than Walmart, with around 7% of retail
* There's no allegation of collusion between Amazon and Walmart
Laws about price fixing apply when a manufacturer or distributor forces all retailers of a product to keep a minimum price (and even then, you can get away with a lot legally, it's only special cases), eliminating competition. Here there's still competition between Walm
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You don't need to be a monopoly to abuse monopolistic powers
You must be very close to 100% of the market, whether you call someone with 97% market share a "monopoly" or not. Or, you have to collude with other sellers to fix prices, which is a different area of law than monopolies.
Of course, this is all in the US. In the EU none of this matters: Amazon is a large non-EU company, so reasons will be found to find the billions no matter what they do. This is as good an excuse as any.
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*to fine them billions
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You are mistaken. You don't even need to be a majority in market share to abuse monopolistic powers.
You have to be a monopoly to abuse a monopoly. (Score:3, Interesting)
You don't need to be a monopoly to abuse monopolistic powers
That statement is a non-sequitur. You cannot abuse a monopoly without actually being a monopoly or at least an oligopoly.
Amazon definitely is the 800lb gorilla of online retail. Nobody else is even close but even there they aren't a monopoly - they have something like 40-50% market share at best. Impressive to be sure but hard to argue that is a monopoly in any sense. They are not even close to that status in the overall retail market - they are a single digit percent of retail. Walmart is 3-4X the siz
Re: You have to be a monopoly to abuse a monopoly. (Score:3)
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Harder to find? (Score:1)
Walmart ain't exactly up for sainthood. (Score:5, Insightful)
Walmart is just getting a bit of payback from Bezos and Co. Everyone seems to forget that it is outfits like Walmart that are causing more damage to American manufacture than the manufacturers themselves. One thing for certain, Walmart has cost more blue collar manufacture jobs in the US than it has created. Walmart has degraded more standards of production and lessened the value of labor and innovation more than any other corporation in history with their anti competitive tactics. Bezos is just giving them sauce for the goose with the way Amazon has excelled at online sales. Something Walmart sucks at because it is an outdated brick and mortar organization and has very high costs for all the prime store locations they require to maintain their obscene purchasing power and retail store dominance.
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It's circle of life. Except that not really, it's actually cancer-capitalism and it's extremely damaging to society. There's a point where capitalism starts feeding on the consumers who are supposed to regulate the market.
Re:Walmart ain't exactly up for sainthood. (Score:5, Insightful)
Right, it's like when a shark eats all the little fish and then you feel sorry for the little fish. But then a bigger shark comes along and eats the smaller shark and now all of a sudden you have to feel sorry for the little shark. It's circle of life. Except that not really, it's actually cancer-capitalism and it's extremely damaging to society. There's a point where capitalism starts feeding on the consumers who are supposed to regulate the market.
I am not saying that Amazon is any more sainted than Walmart. Especially when the Chinese are dragging kids out of school to fill orders for Alexa based devices. The point is that the move to unrestrained predatory capitalism is destroying any possible sense of value in the market place. The rabid consumerism played upon by unrestrained predatory capitalism is reeking havoc with much more than the blue collar work force. It is using up planetary resources at an ever increasing rate with no thought whatsoever for the long term future of our children. There is no real intelligence in the way we engage in commerce as a species. Dealing with humans as nothing more than consumers that must consume at an increased rate to have continuous "economic growth" is systemically fundamentally flawed and eventually doomed to failure for obvious reasons. Anyone with half a brain can see this, certainly predatory capitalists do, they rule because we are fundamentally screwed in the brain by the neurotic consumerism of today.
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2. Capitalism isn't the c
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It's circle of life. Except that not really, it's actually cancer-capitalism and it's extremely damaging to society. There's a point where capitalism starts feeding on the consumers who are supposed to regulate the market.
Yes, yes, prices low enough to be affordable to the bottom tier of society are cancer. Must be nice there in your middle-class enclave, looking down across the poor unfortunates. Don't they know they should pay more!
Re: Walmart ain't exactly up for sainthood. (Score:2)
Prosperity is not the same thing as, or implied by, slightly lower consumer prices.
Globalization - in which Walmart was among the vanguard - has meant trading the decimation and oftentimes complete eradication of whole sectors of the economy, for temporary slightly lower prices on consumer goods. Many people have now realized that was a very bad deal.
Re: Walmart ain't exactly up for sainthood. (Score:2)
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What a happy story these are for all of us customers.
As a result of all this competition and putting the squeeze on suppliers to reduce prices, we all win with more wealth from purchasing the stuff we need and want for less.
Come on, what a joke (Score:4, Interesting)
This article is driven by lawyers who want to sue Amazon. These researchers don't give a rats ass about Walmart, who has been doing the exact same thing, better give us the lowest price or you can get sold elsewhere, for decades.
Re:Come on, what a joke (Score:5, Insightful)
Yep, and Walmart continually forced vendors to lower their prices, providing templates to outsource to China to lower manufacturing costs, and exacerbated the race to the bottom.
Amazon is just a variation on their theme. Fundamentally, they both suck, and both are mostly unavoidable in the US in 2019.
Bullying (Score:4, Informative)
At first this seemed dubious. But if one digs through the article, at least to answer this question:
Amazon alerts the company selling the item and then makes the product harder to find and buy on its own marketplace -- effectively penalizing the merchant.
I was curious precisely how Amazon goes about penalizing the merchant. Turns out:
In plain English, that means merchants lose the prominent “buy now” button that simplifies shopping on Amazon. With that icon missing, shoppers can still buy the products, but it’s a more tedious and unfamiliar process, which can hurt sales. The lost purchases cascade through algorithms determining which products shoppers see, resulting in the items getting buried on the site, according to several merchants.
Now that is just shady and quite frankly, a very dick move. And this sort of seals it up as a 100% dick move:
The alerts show the product, the price on Amazon and the price found elsewhere on the web. They don’t name the competing site with a lower price; the merchants must find that themselves.
But I suppose I'm still mildly surprised it's taken this long for one of these big retailers to turn to bullying. This article will definitely be in the back of my mind the next time I consider Amazon for a purchase.
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Re: Bullying (Score:3, Interesting)
Why not consider this from a customer view point?
Amazon is helping me avoid a higher price. If Amazon allowed it, can you consider the cost to goodwill I would have of them and of the returns process or of the call-in support for a match when I find the cheaper price else where?
By doing this, Amazon is helping me save time and money at their own cost. It seems the merchant is trying to fleece me based on what door I come to them from.
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"Why not consider this from a customer view point?"
Exactly! As a consumer, I don't give a shit.
They all want us to spend more, to get on our knees or reach high up to get the cheap stuff while the expensive crap is at an eye-height.
So no sympathy here.
Re: Bullying (Score:2)
If you only look at the consumer side of the equation, you end up with a hollowed out economy.
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You came to the wrong conclusion.
Amazon is helping to prevent a lower price.
Re: Bullying (Score:2)
Not really.
If the vendors were different for the same product, I will get it for a lower price, whether from Amazon (available) or other retail (unavailable at Amazon).
In this case, the vendor is the same and I as an Amazon customer get the same price as before. The other vendors' customers come over to Amazon. Over time the other retail stops carrying the higher priced unselling product anyway.
In all scenarios, each party (vendors, retails, & customers) does what is best for them. The vendors can ch
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I'm really not familiar with legalities around this, but I found this funny.
Amazon is trying to hurt the vendor for selling at a lower price elsewhere.
They could lower their search ranking directly. I suspect though Amazon fears this would be seen as anti competitive. Maybe from a legal perspective it is, but to me this would be like Walmart moving the item to a different aisle or something. I'm sure that's common business practice when dealing with a vendor you have a disagreement with.
It looks like they w
Retail too (Score:3, Interesting)
Um, what? (Score:2)
"could end up being considered illegal conduct because people who prefer to shop on Walmart end up having to pay a higher price."
Um ... people who prefer to shop at tony department stores end up having to pay a higher price too. So what? It's called different markets, competition, market segmentation, etc.
The irony here hurts. Walmart is the king of pressuring suppliers to lower prices for themselves.
Re: Um, what? (Score:2)
What's also irony is that in the market of markets, regulations went way the other way. Exchanges for futures and stocks were forced to open up and review each other's list of open orders and offers.
If you put a request in to buy a security in CBOT, they actually have to process your request at the exchange that has the best price; even if isn't their own!
That's like going into Publix and getting cereal and soft drinks. Then at check out it tells you that they charged you Kroger's price for the cereal beca
Re: Um, what? (Score:1)
Is this not what should happen? (Score:2)
If something is cheaper (lets say a drill) somewhere else then people will buy it there. So it seems reasonable to me they should deemphesize (the listing for that make and model of drill) and emphasize what they have the advantage on (possibly other drills of different makes and models they have a price advantage on.)
no win (Score:2)
walmart pressures sellers to sell at a lower price and amazon pressures sellers to sell at a higher price at walmart. what is a seller to do?
Amazon Product Lisitng (Score:1)