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Sat Mar 19 2022 22:43:55

Scrutiny of Amazon Pricing Practices Continues

By: Ina Steiner

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A federal judge in Seattle denied part of Amazon's motion to dismiss a class action antitrust lawsuit filed 2 years ago by third-party sellers, Protocol reported on Tuesday.

But on Friday, a DC Superior Court Judge threw out an antitrust lawsuit against Amazon filed last year by DC's Attorney General, according to the New York Times (via the Verge).

Amazon sellers face enormous pressure to offer low prices thanks to the Buy Box - some excerpts from the Seattle lawsuit underscore its importance, including the following (via CourtListener.com):

- "Accepting FBA services also greatly increases the likelihood that the seller's product will be selected for the coveted Amazon Buy Box. Meanwhile, sellers' enrollment in FBA is a win for Amazon, who never takes title to the third party seller's inventory, yet enjoys a steady revenue from its sellers, who do all the merchandising and take on the inventory risk."

- "... the "fair pricing" rule penalizes merchants who sell their products at a higher price on the Amazon.com platform by removing the product from the Buy Box, suspending shipping options, and terminating selling privileges."

- "When users click the "Add to Cart" button on the Amazon.com platform, they are buying from one merchant and one merchant only - the Buy Box winner. Similarly, when a user opts for the "Buy Now" button, that will also lead to the Buy Box owner. Over 90% of sales occur using the Buy Box. Eligibility depends on a number of factors, including the seller's reputation, price, efficiency, and whether the seller is selling its product for a lower price through competing retail e-commerce channels."

The complaint also discusses what factors go into "winning" the Buy Box. But can regulators like the DC Attorney General truly regulate tech companies like Amazon (and eBay, and Google) without knowing the algorithms they use?

The Food and Drug Administration (FDA) is responsible for assuring that foods sold in the United States are "safe, wholesome and properly labeled," and companies must list ingredients of their products. Should Amazon and Google similarly be required to list the factors ("ingredients") that go into their algorithms? 

Because of the immense pressure to offer low prices in a cutthroat environment, some sellers are tempted to work together to maintain prices - a strategy that the government also frowns upon.

In July, a Tennessee seller was charged in an alleged conspiracy to "suppress and eliminate competition by fixing prices of DVDs and Blu-Ray Disks sold through Amazon." In January, the government charged 3 more Amazon sellers with price-fixing DVDs.

This week, the Feds charged yet 2 more Amazon sellers with alleged price-fixing of DVDs.



Comments (6) | Permalink

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This user has validated their user name. by: COVID-19

Sun Mar 20 01:32:17 2022

A race to the bottom!

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This user has validated their user name. by: The End

Sun Mar 20 14:50:24 2022

Apparently, being involved in online small business means taking a vow of poverty.
I say,  B.S.
Get Everybody off our backs.
Let us Fly, and realize healthy profits and a good life for our labor.
Healthy Businesses, Healthy Country.

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by: MichaelP This user has validated their user name.

Mon Mar 21 04:48:06 2022

Great post above from The End.

"But can regulators like the DC Attorney General truly regulate tech companies like Amazon (and eBay, and Google) without knowing the algorithms they use?
...Should Amazon and Google similarly be required to list the factors ("ingredients") that go into their algorithms?"

I was thinking about this exact topic recently, regarding the algorithms. eBay needs some governmental intervention because they manipulate visibility and sales to such a degree that it is unfair to the sellers and should be illegal. But how can you regulate that?  

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This user has validated their user name. by: The End

Mon Mar 21 07:31:39 2022

"how can you regulate that?  "
Put it out of business if it is found to be doing what Amazon is doing and hold up Amazon, Ebay, Etsy and any other "Venue - turned- small business buttininski"  as examples.
IT'S YOUR BUSINESS WE'RE TALKING ABOUT HERE !
Put these corporate ripoffs in their place at the bottom of Davy Jone's Locker.
Snuff 'em out. Let Real mom & pop small businesses grow and thrive here in America on LEGITIMATE Venues. It will be GREAT !

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by: BurglePork This user has validated their user name.

Mon Mar 21 14:48:12 2022

Amazon's ''fair pricing'' policy seems especially egregious to me. They've suppressed several of my used books for being priced too high, according to their (undisclosed) standards. It seems wrong to me that they can tell me how to price. But what's even worse is that it's not applied to everyone equally - mine may be suppressed while other copies are available at prices even higher than mine!! WTF??! Either the price is too high or it's not, they certainly can't claim to be protecting buyers with this policy, and why should other sellers be allowed to do what I'm not? That DEFINITELY seems like a kind of market manipulation that should be illegal, if it isn't already.

And in every case, these are scarce out-of-print books, so list price or any ''objective'' value is irrelevant - the price is what the market will bear, and I use market data from Keepa and bookselling sites to determine my own prices so they are in line with historical sales and current offers.

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by: Snapped This user has validated their user name.

Tue Mar 22 14:11:23 2022

“.. how can you regulate that?”

Great question and challenging on many levels.  Foremost is to drag interstate commerce law into the 21st century.  There are many differences between eCommerce and ‘traditional’ trade.  Until more specifically applicable precedents are established, anything else is piecemeal.

Then there needs to be a legally established set of ethical and operational limitations, as such might apply for so many facets of both eCom and use of a ‘venues’ for such.  That will take an uncountable number of committee meetings attended by government (law), capital, industry, tech, and end-user stakeholders.  ‘Sellers’ will need to organize and represent.  If they started tomorrow, our great-grandchildren will be cy-blogging about it.

Then someone just needs to enforce it all.  And hold the ‘guilty’ meaningfully accountable  And that last is the ‘easy’ part.

For this particular topic, one approach would start by outlawing ALL marketplace manipulation by venues or mega retailers.  This would coincidentally render moot many other field-tilting issues too numerous to itemize here.

Meanwhile, let supply and demand, price, and search return be organic and (legally) self regulating.  First come first serve listing order as default, only the buyer with full control over search filters.  Sellers with full choice in their own ‘exposure’ limitations and pricing/fulfillment services.

Get rid of anything that permits the ‘venues’ to establish any kind of ‘visibility advantage’ based on anything except transparently advertised and globally available ad buys if that’s their thing.  Limit their placements to specifically relevant items only - provide a choice box for the buyer to decide if they want to see ‘accessories and suggestions’.  Let the buyer decide whether the seller’s ‘reputation’ is worthy via any display of ‘metrics’.  

Routine Federal oversight and audit funded by fee profit collected on tax payments processed by the venue.  

Thanks.  Fun to dream.







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