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Sun Mar 10 2019 00:13:36

Senator Wants to Protect Small Businesses from Amazon

By: Ina Steiner

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How big is too big in ecommerce? A lawmaker in the US echoed the concerns growing in Europe that a small number of high-tech firms, including Amazon, are wielding too much power, and on Friday, the Senator called for legislation to break up those companies.

The concern is not new, and as recently as December, Germany's competition watchdog opened an investigation into Amazon to examine whether it was abusing its market position to the detriment of sellers active on its marketplace.

What does Amazon CEO Jeff Bezos think? As antitrust pressure was heating up last year, he was asked by a German journalist about speculation that President Trump might call for a breakup of Amazon. Bezos said he welcomed scrutiny from the media and government.

"I think all large institutions should be scrutinized and examined. It's reasonable," he said.

He noted that Amazon has only recently grown so large, growing from 30,000 employees (2010) to 560,000 employees in 8 years. "When you look at the large tech companies, they have gotten large enough that they need, they're going to be "inspected."" You can watch the video here via YouTube (owned by Google!).

In its early history, eBay ruled ecommerce, making it a like-it-or-leave-it marketplace for small sellers who found few viable alternatives. Some sellers and retailers may feel the same about Amazon's market power today.

Senator Warren unveiled a plan on Friday to rein in power wielded by Amazon, Google, and Facebook. She said nearly half of ecommerce goes through Amazon, and over 70% of all Internet traffic goes through sites owned or operated by Google or Facebook. She accused the companies of using their resources and control to squash small businesses and stifle innovation. 

"To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it's time to break up our biggest tech companies," she said.

Here is the part of her plan that might have Bezos squirming:

"Using Proprietary Marketplaces to Limit Competition. Many big tech companies own a marketplace - where buyers and sellers transact - while also participating on the marketplace. This can create a conflict of interest that undermines competition. 

"Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp."

Many sellers and those in ecommerce would agree with the characterization that Amazon "crushes" small businesses - we've reported on concerns and claims that Amazon uses seller sales data to turn around and compete with those sellers.

Successful entrepreneur and consultant Scott Galloway, now a marketing professor at NYU, laid out a case for breaking up Amazon, Apple, Facebook and Google in the landmark article in Esquire, "Silicon Valley's Tax-Avoiding, Job-Killing, Soul-Sucking Machine."

We're betting Senator Warren is familiar with his work. 

She advocates legislation that would make large tech platforms "platform utilities" that would be prohibited from owning both the platform and the platform participants. And she advocates unwinding what she called anti-competitive mergers, including Amazon's acquisitions of Whole Foods and Zappos.

"You'll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days," she explained.

But here's what would change, she wrote: "Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business."

As sellers, what do you think of Amazon competing with the sellers that sell on its platform? And if you think it's a problem, what do you think can and should be done about it?



Comments (20) | Permalink

Readers Comments

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: Dellthorpe This user has validated their user name.

Sun Mar 10 01:42:18 2019

Jeff Bozo is a slime ball. He scams and steals from the sellers that made him filthy rich. Bozo has no business morals and would sell his mother if someone offered to buy her. Elizabeth Warren is just a old wind bag - all bark and no bite. She just wants some media attention for her next failed run for POTUS. Both Bozo and Warrrn r kindred spirits. Bozo is a carbon copy of Sam Walton.

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

This user has validated their user name. by: toolguy

Sun Mar 10 03:00:47 2019

Amazon, the Ma Bell of the 21st century!

Break it up, Break it down, Make Bezos move it around. . .

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: sasikat9 This user has validated their user name.

Sun Mar 10 06:28:15 2019

Go ahead and do it. Like Walmart all Amazon will do is lower the prices of something. Small sellers do not get the best price for anything from manufacturers. Amazon can buy in huge quantities and thus get a really better price. This won't help the sellers as they will still have to lower their prices and lower their profit. If the government really wanted to investigate these sorry companies they need to come up with a better idea. So this is just another hot air waste of taxpayers money scam.

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

This user has validated their user name. by: Rexford

Sun Mar 10 08:14:06 2019

"Like Walmart all Amazon will do is lower the prices of something."

I don't know if you have ever checked out a clearance rack at Walmart but Walmart is clearly not the low price leader.

Until you see the granular details of a plan after an investigation how do you know what the effect will be.  One line of Ina's article states " investigation into Amazon to examine whether it was abusing its market position to the detriment of sellers active on its marketplace".

For me personally, one area where Amazon could stop taking advantage of sellers is the unrealistic shipping that they allow sellers to charge for heavy items.

It's all about small sellers having a fair shot.  Look at how eBay hides small sellers.  

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by: plcombs This user has validated their user name.

Sun Mar 10 10:15:46 2019

Market efficiency and competition tend to create monopolies through good timing, and consolidation followed by more growth as they absorb competitors trying to remain viable under pressure.

How you go about breaking up Google is a tough one. I suspect legal remedies to prevent rigged search results is a more plausible solution.

As for Face Book and Amazon they each pose their own unique set of challenges, is breaking them up a solution?  

They tried it in the oil industry years ago and in the end did nothing to help consumers or limit growth. THey broke up the phone company and rates came down. So it can make things better in some cases, and have no impact in another.

Aren't we all lucky to have such "First World Problems"...



 

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This user has validated their user name. by: toolguy

Sun Mar 10 11:17:30 2019

@Rexford

Maybe you're looking at the wrong CLEARANCE RACK!

https://finance.yahoo.com/news/this-millennials-company-m
akes-millions-buying-from-walmart-and-reselling-on-amazon-151213013.html

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

This user has validated their user name. by: Ina

Sun Mar 10 11:24:28 2019

@sasikat9 "Like Walmart all Amazon will do is lower the prices of something. Small sellers do not get the best price for anything from manufacturers. Amazon can buy in huge quantities and thus get a really better price. This won't help the sellers as they will still have to lower their prices and lower their profit"

Sorry I didn't explain it well, I linked to her post. I believe what the senator is saying is that Amazon would have to spin off its Marketplaces business so it would *not* be competing with third-party sellers, period.

Do you think marketplaces like Amazon should be allowed to compete with sellers?

And perhaps lawmakers considering such antitrust legislation should examine eBay, which in theory doesn't compete with sellers, but through partnerships and deals, favors some over others - including not just helping Chinese companies as they might with any other seller, but working closely with them to succeed on its marketplace.

If Amazon were barred from competing directly with sellers, it would still look to find ways to ensure its M/P had a broad selection of low-priced goods. (Just look at the news coming out last week about Amazon's treatment of its vendors to show the many ways a marketplace wields power.)

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by: sasikat9 This user has validated their user name.

Sun Mar 10 12:32:53 2019

@Rexford.

Do you really think that the clearance racks at Walmart is a lost for them.....Think not. If that was so all Walmart would do is donate the junk to some welfare outfit and take the donation on their income tax. Walmart pays pennies on the dollar for most of their junk. Unless you buy thousands of the same item you might if your lucky pay half of Retail. Which in itself is no real deal

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: Vigilant Eye On eBay This user has validated their user name.

Sun Mar 10 17:04:03 2019

Re: ''And perhaps lawmakers considering such antitrust legislation should examine eBay,...''

Although such legislation might fall along the lines of vertical integration (i.e., as opposed to the establishment of a monopoly), unlike a District Court's landmark ruling (which was affirmed by the Supreme Court) in the Paramount Consent Decrees  (United States v. Paramount Pictures, Inc., 334 U.S. 131 1948), neither Amazon, eBay, Google, or Facebook are vertically integrated in the traditional sense, because the Internet is still evolving and the aforementioned companies are involved in a lot of other business activities that are not directly linked to ecommerce, social media, web content, and/or web browsing.

Unbeknown to many, a substantial portion of Amazon's revenue is generated from the firm's booming cloud computing services division (Amazon Web Services), which provides on-demand cloud computing platforms to individuals, companies, and governments, on a paid subscription basis.

Simply acquiring other enterprises (startup or otherwise) is not considered to be antitrust unless such acquisitions wind up lessening competition, or restraining trade.

While I abhor the business practices of Amazon, eBay, Facebook, and Goggle, unless our ancient antitrust laws are updated to reflect present-day concerns, it is highly unlikely that these huge companies will be reeled in anytime soon.

With so much money at stake (i.e., through highly paid lobbyists). Congress simply does not have the stomach for enacting any meaningful legislation.

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: 1st Armored Division 1971-1973 This user has validated their user name.

Mon Mar 11 00:40:40 2019

Should a few companies have a stranglehold over the US economy. I think not and like all monopolies they should be "regulated for the good of the country", not just their shareholders.

How you do that is what the debate is going to be about.

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: Barbbie This user has validated their user name.

Mon Mar 11 01:07:06 2019

This is just a request for a larger check from Jeff, nothing more, nothing will come of it.  As soon as he coughs up enough money she will shut up about it.

Amazon doesn't have to buy anything to compete with you and see if they want to sell your item.  2 Years ago they stole one of my holiday items, they did this by "transferring" it to other warehouses, it did not show up at any warehouse until after the holiday was over (about 2 months). That was the only year that Amazon competed on that listing, never did before and never since....of course, I do not send them in to FBA anymore either and a lot of the people who had this item don't either. I have a feeling they had to do a lot of BS to make up for those items they sold but didn't actually own. I had sent them 150 that year as I had every other year. This year sent them nothing and sold over 500 myself. No more FBA for me.

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: Chicago48 This user has validated their user name.

Mon Mar 11 04:46:23 2019

AMZ is also opening up grocery stores.  In that case, corporations like Kroger should file an anti-monopoly lawsuit.

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This user has validated their user name. by: thehosst
Web Site

Mon Mar 11 05:17:30 2019

The MOST IMPORTANT argument she has is the one mentioned in SIMPLE terms: "You'll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days," she explained.
Breaking up Amazopoly, does not mean they will stop it from selling. I kind of got tired about trying to sound the alarm of the side business FRAUDULENT Amazon bottom-feeder, penny scratcher employees have working inside amazopoly. Amazon policy is a big issue, but most people never talk about the money made by crooked rats working inside Amazon to benefit their cousins and friends selling crap and fake stuff at a penny profit. The WSJ documentary about how Amazon crooked employees work to kill American businesses is quite interesting, in case anyone cares to know more about it: https://www.youtube.com/watch?v=vOj-tRTbFfY

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by: Chicago48 This user has validated their user name.

Mon Mar 11 05:19:46 2019

Google split off into two companies, and I've asserted that AMZ should do the same.  There should be Marketplace; then AWS; then Prime Streaming.

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by: epuise This user has validated their user name.

Mon Mar 11 09:51:48 2019

ALL of these Companies that get too big cannibalize on the flesh of the small people who built them... eBay sells data to the Chinese on old, vintage, antique so they can create fakes... What else is new ?

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

This user has validated their user name. by: FEEbay

Mon Mar 11 11:49:42 2019

I do think that Amazon should NOT be allowed to compete directly with 3rd party sellers, heck-- even the slimeballs at EBAY havent gone that far!!

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by: mcposty This user has validated their user name.

Mon Mar 11 11:55:36 2019

When Amazon gets special corporate treatment from state and federal governments, there is no longer a free market and their unfair advantage ensures their market dominance.

Amazon would have went out of business long ago, as it was bleeding billions of dollars. In comes usps to save the day giving them dirt cheap shipping and shipping on Sundays..something no other businesses got.

Now, they prance around demanding states to bid for them and give them zero tax liability, all the while lesser businesses get destroyed by taxes and regulations.

I believe, since Amazon is a corporate status, they should be open to heavy handed jurisdiction and maintained for the benefit of the general economy.

If they don't like it, they can relinquish their corporate status, special treatments and pay the piper as everyone else..but then theyd go out of business in a few years.

I am fully behind any government action against Amazon, Ebay, and really any conglomerate that benefits from Government aide.

All of these companies are seriously over stepping ther bounds. Look at Paypal, censoring conservatives, taking politial stances, and trying to dictate the direction of the nations political environment. They also would be sued into the ground for their horrible practices i it wasn't for the fact that the government protects them now from continuous lawsuits!

In the end, our founding fathers were against corporate power and spoke out against them amassing power, and chided them for trying to dictate government policy.

I say, break up Amazon's monopoly which they DIDN'T earn themselves, and stop allowing them to buy every business they feel like.





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This user has validated their user name. by: toolguy

Mon Mar 11 12:08:39 2019

If Amazon is forced to be broken up the retail side will suffer and have to raise prices!

Amazon makes most of their money on Amazon Web Services.

eBay would prosper from a Amazon break up. . .

Perminate Link for Senator Wants to Protect Small Businesses from Amazon   Senator Wants to Protect Small Businesses from Amazon

by: mcposty This user has validated their user name.

Mon Mar 11 13:43:05 2019

Broken up doesn't mean shut down. It means they should have to seperate from many of their practices, such as this Senator saying seperate Amazon selling its own stuff along side other people's stuff. That is a step in the right direction. The next step is to fine and limit Amazon from demanding people's suppliers so that Amazon can go to those same suppliers and get better deals.

Amazon NEEDS to be investigated and monitored, as well as Ebay, because they are clearly manipulating things to their favor with full disregard for the honest sellers who utilize their services.

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by: Fahrenheit451 This user has validated their user name.

Mon Mar 11 15:17:03 2019

"such as this Senator saying seperate Amazon selling its own stuff along side other people's stuff."

I think prohibiting Amazon from selling identical products with its own brand should do the trick. I am still reeling from the news that a wholesaler of spaghetti machines lost his business when Amazon decided to source from the manufacturer and compete. Amazon is supposed to be offering a free marketplace and promoting healthy competition, not selling things to undercut its users. I think that breaking it up to ensure it does not create a monopoly should be accompanied with legislation which prevents a market site from competing with its membership. Criticizing Warren for her effort to protect small businesses is proof that the Amazon puppets are succeeding at their goal. Just don't sell through Amazon and you will be more successful at breaking it up on your own. There have been several boycotts already.



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