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Feds Open Antitrust Investigation into Major Online Platforms

US Department of Justice
US Department of Justice Opens Antitrust Investigation into Major Online Platforms

The Federal government of the United States has opened an antitrust investigation into online platforms. While not naming names, the Justice Department cited concerns about services related to “search, social media, and some retail services online.”

CNBC, among others, took this as an apparent reference to Alphabet (Google’s parent), Amazon, Facebook, and Apple.

The DOJ wrote that it was “seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others.”

Press release follows:

The Department of Justice announced today that the Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

The Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online. The Department’s Antitrust Division is conferring with and seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others.

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”

The goal of the Department’s review is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want. If violations of law are identified, the Department will proceed appropriately to seek redress.

SOURCE: Justice Department Press Release

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

18 thoughts on “Feds Open Antitrust Investigation into Major Online Platforms”

  1. This is long overdue from the arbitrary nature of placement on marketplaces, to the mysterious money suck that is google ads of “bidding” for placement.

  2. YES !
    Finally !
    It’ll be interesting to see how the Feds tackle Ebay, and Etsy….
    Discriminatory use of PayPal should end as well.
    GO GET ‘EM !

    1. Well about time. I for one cannot wait til Etsy is pegged. Just their last shenanigan about “offer free shipping or else” is in clear violation of the Fair Trade Act and probably this also. Not to mention the thousands of wholesale / resale sites they knowingly ignore. I would be happy to send feds my hundreds and hundreds of copies of reports I save over a 5 yr period. From 20 shops selling same things to copy and trademark violations like Gucci and LV. But god help me if I happen to use a ” Cuban style ” as a listing. They jump on that shit..
      Etsy needs a good spanking. And the Ebay CEO that ruined Ebay and now Etsy really needs to be replaced. He is clueless. I should be running Etsy, at least I have experience in the market they are supposed to be in .
      OH AND YOU HEARD THAT ETSY JUST BOUGHT REVERB FOR LIKE $229 million. They cannot even do Etsy right!
      If I where a share holder I would be worried. LOL

  3. It’s about dang time! At first, I had to wonder if it was the Etsy exec’s comments about “seller churn” and “seller facing launch” that suddenly led to opening an investigation after talking about it for so many years (ever since the EU first started taking on Google). Then I realized that it could be numerous reports are coming in from sellers who are finally fed up and taking action by reporting them to the proper authorities.

    I will certainly be participating in providing information. I’ve been talking about this for a long time now and already started collecting information, but have been gathering more as time permits. I initiated a complaint to my SAG within the past week, but require a lot of information to provide as backup to the complaint, so it might take me a bit of time.

    I recently posted on my own forum about this subject, so this announcement comes at a time when I know I’ve had enough. We were discussing money transmitters (PayPal) and how Etsy and eBay are not money transmitters protected by those same laws. They are simply marketplaces with internal payment systems. Here an excerpt from that post:

    “The thing is that everything is handled electronically, so it shouldn’t take that long to get the funds to their rightful owners. I could see it maybe taking a bit longer on an international transaction, particularly if it involves a country known for fraudulent activity. I could also see it taking a bit longer if the transaction was suspicious and they needed to do their due diligence. We can’t fault them for that.

    The other thing is that the business, their products and their profits do NOT belong to Etsy or these other marketplaces. So they have no right to demand that all payments go through them. We each have access to our own money transmitter that we use (PayPal) as a trusted middleman where we actually have our own money accounts. Why would I want a site known for “accidentally” stealing millions from their customers on more than one occasion having any kind of control over MY money? It should be my full right to choose who handles my money, no matter where I sell.

    The ONLY reason Etsy is doing this is to cushion their own bottom line, as well as give themselves more control to play the games they have been to financially stick it to their customers. If anyone should be earning interest of off our own money, it should be us. So, for them to make interest on money that is not theirs is highly questionable. The attitude these marketplaces are taking really does reflect a mob mentality.

    For them to even have their hands on our money at any time if we don’t want them to is wrong…period. It’s my business, my products and my profits. I pay my rent (and always in advance) and that’s that. I would keep $25 in my account that they could earn interest from, but that’s all I chose to put in that account. I have never given them permission to keep more.

    It’s not their money, so they should have absolutely no say in the matter…period. Even if there’s a problem, it’s none of their dern business. I have a money transmitter that HELPS me handle any situation that may arise. They are the ones that I chose to handle my money — outside of that $25 in my Etsy account…period.

    If someone chooses to use Etsy payments, then they are accepting those terms. However, most sellers wouldn’t accept those terms if they were given the choice. Notice how quiet Etsy execs have been since making the latest announcement? I have a pretty strong feeling they’re about to enter that stage eBay did after sticking it to sellers so much…a mass exodus.

    Anywho, whatever current laws are, it doesn’t mean that they’re perfect as is. If a law is leaving a small business open to being taken advantage of, then it needs to be amended. That is the way of the law and lawmakers cannot possibly know everything about everything to make the best decisions on our behalf. So, it’s up to us to inform them because the likes of Etsy and eBay sure as heck won’t do it. LOL

    They’re only fighting the internet sales tax thing because they don’t want to be held responsible for another business’s transactions. Yet, they want full control of the business and that business’s money? You can’t have it both ways. You certainly aren’t entitled to control of another business and its money in the first place, especially not when your only intentions are to play games with that money for personal gain.

    When you really think about it, they truly are a bunch of crooks who need to be put a stop to. Otherwise, our economy is going to get even worse because so many small businesses are failing — and it will continue as long as we let it.

    Sure! We can wait for the next big thing to come along, but who wants to waste their time on that when the process will just start all over again? The company will begin showing its money-making potential that draws in the vultures. Investors will come along under the guise of helping the business grow. Before the owners know it, the investors are controlling their business by holding that money over their heads.

    Then the big dawgs come in and set into motion their plans for a hostile takeover (ousting Kalin and then the second CEO, replacing him with a former eBay exec…suspicious much?). Once the takeover is complete, the site quickly becomes a bigger and bigger strain on a small business and its ability to succeed — even highly successful ones that helped put Etsy on the map according to what I’ve seen in their forums. How can any of that be legal?

    All while sites like eCrater refuse to let such things happen and are so obviously held back by the big dawgs like Google and all their high-paying cronies. Why do my perfectly well-optimized eCrater listings never do well in a Google search? They never have. There was one point when my listings started to appear under my custom domain, but they soon disappeared.

    When I do a highly-specific (but not too specific) test search and see the results given, there’s no reason my listing shouldn’t be on the first or second page. I got my Etsy listings at the top of the first page with the exact same titles and descriptions, no problem, despite having been first listed on eCrater, and that was with a more general search query — at least until Etsy started hijacking them. After reporting them to Google, I think Etsy quit submitting my listings to Google at all because they disappeared. I was even seeing my eCrater listings ranking much higher in Google Shopping, if I saw my Etsy listings at all.

    Anywho, there’s just so much going on behind the scenes and it’s being done by a small group of people with highly selfish and even evil interests. It’s not some sort of conspiracy theory, either. I’ve been doing some research, which I plan to share in my complaint to my SAG.”

    Read more: http://esellerscafe.boards.net/thread/1051/sales-doing-on-marketplace-shops?page=38#ixzz5ucxwPm56

  4. @The End, I’m not sure what sort of issues you’ve had with PayPal, but I’ve had a business account with them since the first year after they opened for business and have never had any problems. They have always displayed professionalism and a genuine interest in protecting my account.

    I would certainly trust PayPal over Etsy or any of these other marketplaces to handle my money any day. PayPal has never withheld my funds or “accidentally” stole millions from their customers on more than one occasion. Nor have they done anything whatsoever to stand in the way of my business’s success.

    It would seem that the majority who complain about PayPal are eBay (or former eBay) sellers. You should be blaming eBay and the fact that they perpetuate fraud. PayPal has been forced to protect itself from eBay’s many shenanigans and there’s certainly no love lost between PayPal and eBay. PayPal has always hated eBay and, unfortunately, those who chose to sell on eBay were treated according to how PayPal felt about what eBay was allowing. You can’t really fault them for that.

    I have never sold on eBay and, therefore, have a perfect record with PayPal. I am always treated with respect by customer service and any issues are quickly resolved. So, by selling on eBay, one is exposing themselves to the many fraudsters on the site as well as the site’s seeming intentions to allow the fraud. That will have a negative impact on your “reputation” with PayPal.

    So, you just have to be careful about who you choose to do business with. Even then, there’s always the chance that things will go wrong. For example, when I started selling online in 2009, I refused to do eBay or Amazon because they’re publicly owned and I know what happens when shareholders are involved. It becomes about the site making money instead of the site providing the services they once did to help small businesses grow.

    So I did a search for an alternative and came across Bonanza — privately owned at the time, which meant that my business was actually growing. It wasn’t long before angel investors came along and ruined everything. I eventually gave in to Etsy’s upfront listing fees so I could grow my business on a privately-owned company. Unfortunately, it wasn’t long before they went public and things quickly started going downhill there, too.

    So, no matter how careful you are, the current climate of eCommerce contains pollutants called greedy investors. Even if the next big thing came along and started off as a great alternative, the process would start all over again if the site began showing any money-making potential. The smell of money always draws in the vultures and, if the owners fall for their scheme, you can rest assured the site will no longer be the tool you need to grow your business.

    My point is that, as business owners, we sometimes have to make hard decisions. If we find that we’ve aligned ourselves with a “partner” that doesn’t have our best interests at heart, then it’s time to dissolve that partnership, no matter how successful we previously were or currently are. If you remain aligned with that partner, then you run the risk of ruining your relationships with your other partners.

    Etsy has always been my best producer of sales, but I can no longer align myself with a company that’s only concerned with appeasing its greedy investors. Especially not after what they’ve already done to my business and even me personally. It was like deja vu after having left Bonanza for the very same reasons.

    So, if I want to build a viable business, I obviously cannot do it on a marketplace — at least not in the current eCommerce climate that needs to be cleaned up. Even if a site is privately owned, the site will either be held back by the big dawgs for not giving into their ulterior motives (eCrater) or the site will quickly become a bigger and bigger strain on my business simply because it’s all about investors now (eBay, Amazon, Etsy, Bonanza…).

  5. Okay, I’m not sure what happened to my previous post (#2866). It’s not displaying as unapproved, but my second post is. I think I submitted it 2-3 times, but it never displayed as unapproved awaiting moderation.

  6. The media of course didn’t even mention eBay as being included in the investigation. No surprise as it seems like there’s an edict against eBay being mentioned in anything negative. Or it’s possible eBay is considered irrelevant and not worthy of mention. But if those mentioned companies are included, then eBay damn well better be included as well.

    1. While not naming names, the Justice Department cited concerns about services related to “search, social media, and some retail services online.”

      The JD didn’t mention names, themselves, so the media is only speculating. What’s important is that the JD DOES mention everything that’s broken. Of course, they’re not going to publicly announce their list of suspects as the investigation has just begun and is ongoing.

      You can rest assured that the marketplaces will be included at the very least for unfairly manipulating search. Etsy is certainly going to have some ‘splainin to do after erroneously taking millions from customers earlier this year — and it’s not the first time it’s happened.

      If we small business owners inform them of all the problems we’re having, then they’ll know who to investigate, why and what to look for. I’m sure some fear of losing the platform they’re selling on, but the JD isn’t going to let that happen, especially if you make them aware that you don’t want to.

      They understand that there’s a problem in the eCommerce realm that is hurting small businesses. Their job is to improve what needs improving by investigating, holding guilty parties accountable, making judgments that become law, and ensuring that the consumers relying on the guilty parties will be better treated in the name of fair trade.

      So, for anyone feeling anxious about it, don’t. This is what it’s going to take to get back our tools for building our small businesses — not bleeding us dry while we get nowhere fast for our efforts. This is a good thing. We didn’t lose our Microsoft products or the use of them when they were found guilty of antitrust laws. So set your minds at ease. =)

    2. I think eBay is considered generally to be of not enough importance to include in such things.

      When your GMV id declining 5% per year, and Jeff Bezos (Amazon’s Genghis Khan) has run roughshod all over you, you tend to get a bit more sympathy from the media.

  7. PayPal is NOT licensed to operate in My state and a few others.
    Few people know this.
    Alot of people just don’t care and gloss over it.
    PayPal has RUINED many, many businesses.
    I have been the recipient of several phishing emails generated from WITHIN PayPal,
    as proven by the content only PayPal has access to.

    1. I’m sure at least many of those many businesses are eBay businesses, which leads me back to my point about being careful when choosing who you partner yourself with. I bet if those many businesses weren’t selling on eBay, they would have an excellent PayPal reputation just as this seller who refused to do eBay. I do feel for those who’ve had troubles with PayPal, but I’m sure it could have been avoided by selling elsewhere.

      As for licensing, I doubt very seriously that PayPal would be operating in a state that doesn’t want them to. Maybe your state doesn’t have laws pertaining to money transmitters and/or doesn’t require licensing. Just like when I was doing business in Kansas, they don’t require registration of a DBA like they do in Texas. You can just start using your DBA without registering your business.

    1. I’ve heard many horror stories over the past 10 years and it almost always involved an eBay seller. So I’m sure there’s nothing new to see.

  8. The few times I’ve dealt with Paypal they’ve been very professional and courteous – I’ve been selling on eBay since 2001 and the incidents have all been with eBay sales save for one which was a goof Paypal made over their credit program. I doubt seriously that there is any animosity against eBay from Paypal – they’re just a payment processor with eBay as one of their many clients.

    I do agree with what happens when sites go public. Poshmark is due to go public in the fall and I’m selling as hard as I can there now because I know there will be a downturn if they sell themselves out to the shareholders rather than maintaining the business practices that made them successful to begin with.

  9. I’ve been perusing the ECB site for years now and it never ceases to amaze me how long comment threads get when sellers get to complaining about something, yet how positive articles such as this one struggle to get beyond the first page of comments. We’re finally getting help from the government and the government is asking for pertinent information from us to help them in their investigation, yet where are all the whiners now?

    Everyone wants to complain, but very few seem to be willing to do anything about the problems in eCommerce…other than whine. When are Americans going to learn the ways of their recent ancestors? Just 40-50 years ago, people were fighting for their rights and they involved some pretty hefty ones (civil rights, women’s lib, etc.).

    Now? Everybody just sits there and lets all the wrongs happen while they waste their time and breath complaining about it all. Why don’t you put that time and breath to use and complain to those who can actually do something about it? Things aren’t going to improve if you don’t actually do what is necessary to help them improve; otherwise, you’re just polluting the airwaves with your negativity.

    Don’t get me wrong. I completely agree that we all have good reason to complain. I just wish more would be willing to actually do something about it. United we stand. Divided we fall.

  10. PickyChicky :o)

    My guess is : The ones who fall silent over ratting out Ebay, Etsy, et al to the Feds, are the Cheerleaders and employees of these sham corporations.
    They’re “Stuffing” the Opinion Pages here.

    1. I feel so sorry for misguided cheerleaders. I used to be one of them for both Bonanza and Etsy. Of course, they still deserved the kudos back when they were still private — or until 2015 in Etsy’s case.

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