One big antitrust issue with Amazon is that they require vendors to use their fulfillment services in order to get the best terms on being listed on Amazon: prime shipping, etc.
That deal for shipping/fulfillment itself isn’t too bad, even if they charge a pretty high price to sellers for the service, because the seller is actually getting something valuable in return, and it’s hard for Amazon to promise fast shipping not in their control.
But the FTC lawsuit a while back alleged that Amazon does more than that. They downgrade the search results of anyone who isn’t a paying advertiser, so they’re squeezing sellers in more ways than one. And worse, part of the contract for fulfillment is a prohibition on competing with Amazon’s listed price.
So if you’re selling something that you need $30 to earn a profit, and it costs you 40% to list on Amazon, you’ll need to list it at $50 on Amazon in order to make your profit, and you’ve hamstrung yourself from selling that same thing for $30 on your own site and turning the same profit by cutting Amazon out. That’s what’s anticompetitive and harms the consumer, even when that consumer intentionally avoids Amazon and goes straight to the seller’s own site.
One big antitrust issue with Amazon is that they require vendors to use their fulfillment services in order to get the best terms on being listed on Amazon: prime shipping, etc.
That deal for shipping/fulfillment itself isn’t too bad, even if they charge a pretty high price to sellers for the service, because the seller is actually getting something valuable in return, and it’s hard for Amazon to promise fast shipping not in their control.
But the FTC lawsuit a while back alleged that Amazon does more than that. They downgrade the search results of anyone who isn’t a paying advertiser, so they’re squeezing sellers in more ways than one. And worse, part of the contract for fulfillment is a prohibition on competing with Amazon’s listed price.
So if you’re selling something that you need $30 to earn a profit, and it costs you 40% to list on Amazon, you’ll need to list it at $50 on Amazon in order to make your profit, and you’ve hamstrung yourself from selling that same thing for $30 on your own site and turning the same profit by cutting Amazon out. That’s what’s anticompetitive and harms the consumer, even when that consumer intentionally avoids Amazon and goes straight to the seller’s own site.