The core case is that Amazon causes prices to be too high, which is perhaps the most absurd allegation I have heard in a long time. Conlon says the FTC does perhaps have a case on the part where charging a lower price elsewhere leads to a demotion in Amazon’s rankings, although as he notes what would be the remedy there? Also how exactly is the consumer harmed by that?
I am not an expert, but it seems to me that you are not even trying to be charitable here. While it is possible for people to be mistaken, we should also explore the alternatives.
You mention that Amazon has hidden fees for sellers, in form of ads they have to buy in a zero-sum competition. But they are not allowed to add these hidden fees to their costs on Amazon, without simultaneously increasing their costs everywhere else. That does sound to me like Amazon causing prices to be high. Perhaps I (and apparently many others) have made a mistake here, but if that is the case, I would appreciate an explanation instead of just calling it absurd.
As a toy model, let’s imagine that my production costs of something are $100. Outside of Amazon I already sold the thing for $150, where $45 was the fee of the traditional shops, and $5 was my profit.
I want to reach more customers by selling via Amazon, but all the official and unofficial fees combined are let’s say $65. So if I want to keep the $5 profit, I need to sell for $170 now. Even if I decide that my profit per piece can be lower now that I am selling more pieces, still, even with $1 profit, the cost at Amazon is $166. And according to the rules, I also have to increase the costs everywhere else to $166. (Or not sell at Amazon.)
We can argue that the loss of my previous customers, who now pay $166 instead of $150 is more than compensated by the new customers who previously couldn’t buy my product at all, and now they can. But that is not the same as saying that the allegation of increasing the prices is absurd.
I am not an expert, but it seems to me that you are not even trying to be charitable here. While it is possible for people to be mistaken, we should also explore the alternatives.
You mention that Amazon has hidden fees for sellers, in form of ads they have to buy in a zero-sum competition. But they are not allowed to add these hidden fees to their costs on Amazon, without simultaneously increasing their costs everywhere else. That does sound to me like Amazon causing prices to be high. Perhaps I (and apparently many others) have made a mistake here, but if that is the case, I would appreciate an explanation instead of just calling it absurd.
As a toy model, let’s imagine that my production costs of something are $100. Outside of Amazon I already sold the thing for $150, where $45 was the fee of the traditional shops, and $5 was my profit.
I want to reach more customers by selling via Amazon, but all the official and unofficial fees combined are let’s say $65. So if I want to keep the $5 profit, I need to sell for $170 now. Even if I decide that my profit per piece can be lower now that I am selling more pieces, still, even with $1 profit, the cost at Amazon is $166. And according to the rules, I also have to increase the costs everywhere else to $166. (Or not sell at Amazon.)
We can argue that the loss of my previous customers, who now pay $166 instead of $150 is more than compensated by the new customers who previously couldn’t buy my product at all, and now they can. But that is not the same as saying that the allegation of increasing the prices is absurd.