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Amazon Watchers Say the Company Has Accelerated Its Efforts To Sell Its Own Products -- and That's Worrying Regulators Around the World (businessinsider.com) 95

Posted by msmash from the aggressive-expansion dept.
By selling more products of its own, Amazon is becoming a competitor to the outside manufacturers it hosts on its platform -- and that's worrying regulators around the world. From a report: Governments have rarely tried to rein in Amazon's ambitions, allowing it to avoid most of the recent scrutiny directed at other large tech platforms. But the increased focus on Amazon's house-brand offerings suggests it may now be Amazon's turn. Driving the news: Amazon built a robust business as a participant in its own marketplace when it saw growth stall in stateside e-commerce, which is why holiday shoppers might have seen Amazon-owned brands like Happy Belly for food or Solimo for household goods when they browsed the site last year. It created more "private label" products, from its AmazonBasics line to brands for fashion and furniture, that are in-house versions of things others sell on the site. It struck deals with outside manufacturers to sell their products exclusively. Critics say Amazon uses its sales data to find fruitful areas where it can produce generic versions of already-popular products.
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Amazon Watchers Say the Company Has Accelerated Its Efforts To Sell Its Own Products -- and That's Worrying Regulators Around th More

Amazon Watchers Say the Company Has Accelerated Its Efforts To Sell Its Own Products -- and That's Worrying Regulators Around th

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  • How is this different... (Score:5, Insightful)

    by williamyf ( 227051 ) on Thursday January 10, 2019 @04:59PM (#57940026)

    ...from house/white brands that you find in supermarkets and stores around the world?

    Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"

    All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand...

    So? what's different in this case?

    • Re:How is this different... (Score:4, Insightful)

      by XxtraLarGe ( 551297 ) on Thursday January 10, 2019 @05:07PM (#57940098) Journal

      So? what's different in this case?

      Stop using common sense, regulators need to regulate. The argument you're going to see is "Consumers are too stupid to make their own decisions. What could be worse for consumers than being able to buy a quality Amazon item at a lower price than a brand name item? It's unfair that Amazon can make comparable items at lower prices AND also sell them on their own site! Abusing market position, monopoly power, other scary words to justify our existence!!!"

      • Re:How is this different... (Score:4, Informative)

        by serviscope_minor ( 664417 ) on Thursday January 10, 2019 @05:42PM (#57940354) Journal

        Stop using common sense

        Well clearly you're following you'e own advice.

        Abusing market position, monopoly power, other scary words to justify our existence!!!

        Yes that is a thing. And it's bad and histoy is replete with examples. Amazon has well over a 90% share in some sectors. What's reasonable for most companies is not reasonable for a company with a 90% market share.

        Except instead of using common sense you're just "hurr derrr gubbmint is teh evul!!11!11oneelevenONE11!11"

        plonker.

        • Re:How is this different... (Score:4, Insightful)

          by XxtraLarGe ( 551297 ) on Thursday January 10, 2019 @05:52PM (#57940406) Journal

          Yes that is a thing. And it's bad and histoy is replete with examples. Amazon has well over a 90% share in some sectors. What's reasonable for most companies is not reasonable for a company with a 90% market share.

          How about an 89% share? An 88% share? An 87% share? At what level is it reasonable, and how exactly do you determine that?

          Except instead of using common sense you're just "hurr derrr gubbmint is teh evul!!11!11oneelevenONE11!11"

          Common sense is allowing consenting adults to make their own decisions. Without interference from an obtrusive third party. Yes, that is a thing. And it's bad and history is replete with examples.

          • Re: (Score:3, Informative)

            by serviscope_minor ( 664417 )

            How about an 89% share? An 88% share? An 87% share? At what level is it reasonable,

            What are you 12 or something? Have you really only just discovered that there can an entire continuum between something OK and something not OK? Clearly though you haven't realised that just because thee are unclear cases does not mean that some cases are not clear.

            and how exactly do you determine that?

            A court. That is literally their job.

            Seriously? How do you not know that?

            Common sense is allowing consenting adults to make

            • How about an 89% share? An 88% share? An 87% share? At what level is it reasonable, and how exactly do you determine that?

              It varies from market to market. The test is whether you can behave as if you had 100%. For example, if you put up your prices, do you lose market share? There are a number of tests that regulators perform to determine whether your market share is distorting the market. In a market with no barriers to entry and high visibility for new entrants, even a 99% market share would not be likely to need regulating. A market with strong network effects and high barriers to entry may start to see distortion as s

          • Just as an example, in the UK, none of the big supermarkets are allowed to have more than about a 30% share. It goes down to planning and commercials, so (say) Tesco can't own all of the big out-of-town supermarkets around a town (or even within a general region). They also can't buy up one of the other smaller supermarkets as that would tip them over the 30% commercially.

            The idea is that we, the consumer get to make decisions. Without this sort of regulation, there'd be bits of the country where you can on

          • At what level is it reasonable, and how exactly do you determine that?

            Ask a jury.

      • I have seen this before
        a parent company starts competing with it's venders
        Everybody bails out and leaves the parent to themselves

    • Re: (Score:2, Funny)

      by neo-mkrey ( 948389 )
      Now it's "On the Internet..."
      but that's about the only difference

    • Re:How is this different... (Score:5, Interesting)

      by Registered Coward v2 ( 447531 ) on Thursday January 10, 2019 @05:09PM (#57940114)

      ...from house/white brands that you find in supermarkets and stores around the world?

      Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"

      All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand...

      So? what's different in this case?

      It's the depth and breadth of Amazon data that's different. Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly. Finally, they also can look at the consumer buying habits to price discriminate. All of that is not avaiable to those on the marketplace, as far as I know. Sellers could follow Amazon's lead but smaller ones may not be able to match Amazon and stay in business.

      • Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly.

        And other businesses can't do this? Really? Hint: every business does this to the greatest extent possible. And computers have made "greatest extent possible" a lot broader than 40 years ago. Or made it faster, at l

        • Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly.

          And other businesses can't do this? Really? Hint: every business does this to the greatest extent possible. And computers have made "greatest extent possible" a lot broader than 40 years ago. Or made it faster, at least....

          As I said, it's the scope and breadth of the data they have that makes them different. It spans product lines, regions, geographies, customer demographics, etc. they have far more information than most businesses. I agree most do that but Amazon's scope and reach is much larger. Walmart may come close but it is primarily US Centric and doesn't have nearly the customer specific data of Amazon. For example, if you start shipping to a new address and stop at the old Amazon can surmise you've probably moved.

        • Re:How is this different... (Score:5, Informative)

          by epine ( 68316 ) on Thursday January 10, 2019 @05:58PM (#57940444)

          Hint: every business does this to the greatest extent possible.

          And that's exactly why regulation exists: because business finds itself congenitally incapable of standing down before it crosses over some critical line that actually holds the system together.

          Just imagine if the banks had said to themselves, "you know, 0% down and picture of the person's dog isn't actually a viable credit check" before melting down the global economy in 2008. We wouldn't have had the meltdown, no-one would be talking about "too big to fail", and none of the terrible new regulations would have been required in the first place. But they can't and they didn't.

          Before that we got the Sarbanes–Oxley Act entirely from Enron, thank you very much. Greatest extent possible, thy name was Enron.

          And then we got Bernie Madoff because people somehow convinced the government that the regulations we actually had were too onerous to fully enforce, so when they got the letter "hey, the consistency of this guy's portfolio is mathematically improbable to an extreme level" (complete with twenty pages of detailed calculations) they did nothing much to investigate.

          The sad, appalling truth is that the root cause of regulation is failure to regulate, because there's always some goddamn megalith that takes the "greatest extent possible" to its logical, local conclusion — which turns out to be its concomitant global demise.

          Amazon is a corporation in the sumo sasquatch weight division. Once Amazon fully activates "maximum extent possible" in its business methods, it's going to leave a giant crater that was formerly a competitive, consumer economy. Jeff Bezos is widely regarded as an alpha-male apex predator, as thoroughly documented in The Everything Store: Jeff Bezos and the Age of Amazon (2013) to name just one.

          Behold the Apex Predator: "The Everything Store: Jeff Bezos and the Age of Amazon" Review [businessinsider.com] — 12 November 2013

          In the book — and I don't mean this as a criticism — Bezos comes off as the lead character in an Ayn Rand novel: a real world John Galt or Hank Rearden, with an e-commerce twist.

          Correct me if I'm wrong, but I think the book is out that Rand rarely portrayed innate forbearance.

          • EVERYBODY invested with Madoff knew he was a criminal. They just thought he was _their_criminal_ and was eventually going to take the insider trading hit for them.

            Madoff's clients were some of the highest net worth people in the USA. Fuck those chumps, they got what they had coming.

            I saved the list of Madoff clients as a prospect list of suckers. Their greed should be getting the better of them again, right about now. Letting them keep their money would be an immoral and unethical act.

          • Just imagine if the banks had said to themselves, "you know, 0% down and picture of the person's dog isn't actually a viable credit check"

            Then the Justice Department would have started investigating them for violations of civil rights and the CRA, because doing a real credit check discriminates against poor people. They would have had groups like ACORN and PUSH breathing down their necks for racism. Barney Frank and Chris Dodd would have gotten up on the floor of Congress and started ranting about the awful rich bastards who run the banks keeping their jackboots on the necks of the poor and keeping them from achieving the American dream of ho

      • Re: (Score:2)

        by Hadlock ( 143607 )

        Costco has big record-sized optical disks hanging in their halls proudly showing off that they had 1TB of customer data way back in .... 1997? maybe 1996 it was a long time ago. Costco has been playing this game far longer and Walmart is able to extract weird facts like people buy more strawberry flavored wafer thins than chocolate ones durring hurricanes. That last fact surfaced back in ~2006 so it's not like this is recent. The reason you have to plug in your phone number or rewards card for your rewards

        • Costco has big record-sized optical disks hanging in their halls proudly showing off that they had 1TB of customer data way back in .... 1997? maybe 1996 it was a long time ago. Costco has been playing this game far longer and Walmart is able to extract weird facts like people buy more strawberry flavored wafer thins than chocolate ones durring hurricanes. That last fact surfaced back in ~2006 so it's not like this is recent. The reason you have to plug in your phone number or rewards card for your rewards savings is that they need at least one piece of customer data to legally track your purchase... everyone does this and if your card number or phone number has not changed in a decade or more they likely have most all the same data as Amazon.

          All true, however their are some differences in each which I think are fundamental:

          1. Costco has a lot of data but only on their consumers. That gives them insight on their buyers but not the broader market.

          2. Walmart has data on what is bought and when and is able to analyze that and has for a long time. They don't necessarily have as much data on the specifics of who is buying since there is no good way to identify who paid cash, which means some percentage of their data is not as granular. More to the po

    • Re:How is this different... (Score:5, Informative)

      by Actually, I do RTFA ( 1058596 ) on Thursday January 10, 2019 @05:16PM (#57940164)

      There are several differences. One is that foodstuffs are a very branded experience already, in ways many things sold on Amazon are not. Coke vs. Pepsi is a real brand war, and store-brand competes in that space. Or Chlorox wipes vs Lysol wipes vs Winn-Dixie wipes. Many things on Amazon just aren't. So, they'll either totally dominate that market or they'll force tons of advertising by companies building brands there (yay, more advertising!)

      Another is that Amazon's market share is significantly higher than most purveyors of white goods. Changes in scale are changes in substance.

      Yet another is that white labels in stores tend to be evergreen products. Amazon is in a position to move faster on new products with higher R&D costs. That means that smaller companies have less time to recoup their costs, meaning less innovation (assuming that they cannot afford the patent process).

      Lastly, there's visibility. It's far easier to see all the options on a store shelf then in a search result. We all know being the #1 Google result is worth a lot more than being #2, and being on the second page is a huge hit. Amazon is not only selling, but is ordering the search results. Meanwhile, at stores, they tend to put the white label good right next to the brand name good, because they're trying to sell it as an alternative. So, little things like say USB cords, fill with a bunch of Amazon Basics offerings of different sizes before you go to the next page. Meanwhile, in stores, there's say a 10oz box of name brand cereal next to a 10oz box of white label, and then there's the 20oz box of name brand next to the 20oz box of white label.

    • Re: (Score:3)

      by tlhIngan ( 30335 )

      ...from house/white brands that you find in supermarkets and stores around the world?

      Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"

      All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand

    • What's amusing is that the data mining Amazon does to better guess customers' preferences that TFA is complaining about, is exactly what websites like the one that published TFA do with viewer clicks to try to show them ads more likely to get click-throughs. Classic pot calling the kettle black.

    • ...from house/white brands that you find in supermarkets and stores around the world?

      It's not, if those supermarkets are in an antitrust position. and if they get there they'll have the same scrutiny.

      Seiously why is the most basic point of antitrust so hard for people here to understand?

    • ...from house/white brands that you find in supermarkets and stores around the world?

      It's not. Regulators carefully watch this space and regularly crack down on abuse from companies about this process too.

  • Amazon Has Clearly Jumped the Shark (Score:5, Insightful)

    by organgtool ( 966989 ) on Thursday January 10, 2019 @05:02PM (#57940054)
    Just search for "pillows" on Amazon and here is what you will see: full-page section of sponsored ads, large section of "Top Rated from Our Brands", two results from your actual search, large section of "Expert Recommendations", one result from your actual search, large section of "Amazon's Choice", and finally the bulk of your actual fucking search results. Google became the most popular search engine because they provided a clean and consistent interface that kept all of the ads clearly separated from the content. Amazon, on the other hand, can't seem to pack enough ads onto their site which makes it more difficult for you to do what you came to do which is pay them money to buy shit (not look at ads). Of course, this doesn't matter because they're so big that no one can possibly compete with them on the combination of price and shipping speed, so everyone will likely continue to put up with their shit despite how terrible they've gotten. My only form of reasonable protest is refusing to buy any products that show up in the ads, no matter how good its reviews are.
    • Amazon seems to be more interested in advertising everything under the sun, then actually selling you a product. Makes it hard to find something specific and the details of it.

    • I have a prime account that I use (or used to use) frequently.

      When I know exactly what I want I often have a annoying time finding because what I'm looking for gets push behind the sponsored and recommended products. Essentially I have to "search" my search results to find the exact item. Since I've paid their membership, I feel I am entitled to an ad free UI. I know brick and mortar stores often move their stock around to force you to wander the aisle, hoping you'll buy additional products that you didn

      • "Since I've paid their membership, I feel I am entitled to an ad free UI. "

        Feel?
        Read your contract. You're entitled to free shipping and free movies and TV series.
        That's about it for a handful of bucks.

    • It's actually worse than this. When Amazon is selling competing products to popular items, Amazon will sometimes hide the search results containing the main competing items. You may have to frame the search several different ways, follow a chain of similar items bought, or back out to a browser like google to actually find competing results.

      • Searching Amazon is like Googling.

        You can't just look at the first page of results or use a single search.

        Google, in particular, loves to push any company not paying them off the first page of results.

        • I mean the competing products don't appear in the search results they are keywords of on any page. They literally hide competing products.
  • This is often the case with large companies who don't produce what they sell. Step 1: Sell other peoples products Step 2: Build a large audience doing so Step 3: Create your own products Step 4: Slowly remove other peoples products Step 5: ??? Step 6: Profit

  • how is this any different from the big retailers like kroger and walmart? and some of them even allow third party sellers on their website.

  • If nothing else concerns regulators about Amazon (Score:3)

    by mysidia ( 191772 ) on Friday January 11, 2019 @02:40AM (#57942278)

    This should not "bother" regulators..... This is equivalent to what many large retailers do: even Walmart has their own "generic" brand of product.

    This is providing a generic unbranded version against higher price named brand products. Sure it is competition against the name brand, but it is also an option that is friendly to customers' wallets ---- the public is better WITH this type of competition than not having this type of competition.

    Competition is a good thing. What should bother regulators is not introducing and marketing their own alternatives, but complete exclusion.

    For example: You can no longer purchase a Google Home from Amazon's store. Even if you explicitly search for the product -- it is simply no longer listed for sale, nor will they stock their store with it, nor fulfill, nor offer a sale.
    The product is in high demand, but is excluded from being stocked and offered, solely because Amazon has their own horse in the game and wants retail customers to Not buy into Google's smart speaker platform.
    That's not competition in Amazon's store though; thats excluding the competition from accessing Amazon's retail customers for no good reason other than they're competition.

    Tell the regulators to worry about that --- Amazon marketing PREMIUM products and excluding competitors from being sold in their store; not "Generics" competition like AmazonBasics AA Batteries, and such.

    • "You can no longer purchase a Google Home from Amazon's store."

      I'm fairly sure you can't buy a new Dodge, Honda, VW or Ford from a Chevrolet dealership, nor go to MacDonalds and ask for a Whopper and expect to get one.

      Excluding the competition from accessing your customers - in your own store - is quite standard, I understand?

      • Re: (Score:3)

        by mysidia ( 191772 )

        I'm fairly sure you can't buy a new Dodge, Honda, VW or Ford from a Chevrolet dealership

        Amazon is not a manufacturer's car dealership franchise.

        nor go to MacDonalds and ask for a Whopper and expect to get one.

        Amazon is not a restaurant that sells food they prepare.

        Excluding the competition from accessing your customers - in your own store - is quite standard, I understand?

        Not for general retailers it is not. Amazon has made their business as a general retailer,
        and in that regard they have captured

  • I wonder if this happens, then would be happened to my business? https://www.urtasker.com/ [urtasker.com]

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