The Amazon abuse in question was about counterfeit PopSockets products sold on Amazon. The founder of PopSockets, David Barnett, “testified that ‘Amazon was aware that large quantities’ of counterfeit PopSockets products were selling on its platform, but that Amazon allowed the problem to continue until PopSockets agreed to spend nearly two million dollars on Amazon marketing services.” In a free market economy, Amazon would have readily apologized to PopSockets and got on with cracking down on the illegal products. But when 63 percent of the online searches for products start on Amazon, then PopSockets has to give in to what even Tony Soprano would call extortion. Basically, Bezos’s Amazon wanted a piece of the business if PopSockets wanted the problem to go away.
This, by the way, was not an isolated incident. The subcommittee had found that, in general, Amazon used the counterfeit products on its platform as leverage in order to force businesses to sell on its platform. Internally, those businesses were classified as “holdouts.” Even a large corporation like Nike had to cave in. Wall Street Journal reported that “Nike agreed to start selling some products directly to Amazon in exchange for stricter policing of counterfeits and restrictions on unsanctioned sales, according to a person familiar with the deal.” …
Lina Khan, recently appointed to the Federal Trade Commission, has documented the case of Quidsi, once “one of the world’s fastest growing e-commerce companies.” Quidsi was very successful selling many different products through its subsidiaries, like Diapers.com. Amazon wanted to buy Quidsi back in 2009 but the founders of the company declined. It was then that Amazon used its size, reach, and financial heft to start a price war against Quidsi.
Quidsi executives saw that Amazon’s pricing bots — software “that carefully monitors other companies’ prices and adjusts Amazon’s to match” — were tracking Diapers.com and would immediately slash Amazon’s prices in response to Quidsi’s changes. In September 2010, Amazon rolled out Amazon Mom, a new service that offered a year’s worth of free two-day Prime shipping (which usually cost $79 a year). Customers could also secure an additional 30% discount on diapers by signing up for monthly deliveries as part of a service known as “Subscribe and Save.”
It was not long before Quidsi was sold to Amazon for $545 million.
According to the congressional report, Amazon had identified Quidsi as its “#1 short term competitor” and “was willing to bleed over $200 million in losses in diapers in one month.” Since the acquisition of Quidsi, Amazon has significantly reduced the discounts and the benefits of the Amazon Mom service. …
This month it was the turn of Tile, a company that produces tracking devices, to feel the kill-zone heat from the Big Tech giants. Apple introduced its own tracking device, the AirTag. There was a lot of fanboy-journalism coverage about the new product. On Bloomberg, the CEO of Tile, C.J. Prober, said
If you look at the history between Tile and Apple, we had a very symbiotic relationship. They sold Tile in their stores, we were highlighted at WWDC 2019, and then they launched Find My in 2019, and right when they launched their Find My app, which is effectively a competitor of Tile, they made a number of changes to their OS that made it very difficult for our customers to enable Tile. And then once they got it enabled, they started showing notifications that basically made it seem like Tile was broken.
The Tile devices are not broken. But in the Apple ecosystem the Tile devices need to be broken because that is what Apple decided. …
Give us discounts or else:
Previously, as Amazon was a big client of delivery companies like UPS, it was estimated that it was able to get discounts up to 70 percent “over regular delivery prices. Delivery companies sought to make up for the discounts they gave to Amazon by raising the prices they charged to independent sellers, a phenomenon recently termed the ‘waterbed effect.’” …
Winners take it all:
In the year 2017, Facebook and Google captured “an astounding 99% of revenue growth from digital advertising in the US.” Thus, though astonishing, it is no surprise that, “due to Google and Facebook’s dominance, ‘the average growth rate for every other company in the sector was close to 0’.”
Obviously these are the companies we want in charge of public speech. They are the ones we’ve been waiting for.