Comment by burnte

5 days ago

> Amazon literally uses the marketplace data to determine which products to make Amazon Basic versions of.

So does BestBuy, Kroger, WalMart, drug manufacturers, and literally ever single other industry where there are generics, private brands, and copycat products/services of all types.

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burnte

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klabb3  5 days ago

Which is a problem there as well. The way I see it, just empirically, is that the marketplace needs separation from an actor on said marketplace, on a strict no-collusion basis. It’s two naturally opposing roles with a conflict of interest (by design - it can be a force for good). Every time I see this inbreeding, sure enough there’s corruption, laziness, perverse incentives, and at the end of it, high prices and poor consumer experience.

It can be train operators and rail, fiber owners and ISPs, insurance companies and pharma, or an App Store and apps, social media and ad delivery.

US antitrust law doesn’t cover this, but I believe in EU there’s stricter pro-competition enforcement (I don’t know enough to pinpoint the exact laws behind, but some markets really work here. Writing this post from a 10GBit symmetric residential line for €24/mo). At least you don’t see as much of this kind of false choice and nefarious market makers.

Sorry I can’t explain it better.

  • burnte  5 days ago

    You're explaining it ok, it's just not a workable idea. You're talking about taking away a fundamental aspect of economics, which if even if it were possible would be a huge blow to efficiency of markets. It's like saying you don't like that people die at different ages so you're going to legally mandate everyone gets to live for 1000 years. It can't be done, and the ramifications if you could are earth shattering.

    First, it's not possible because to do this you'd have to outlaw sales analytics. You'd have to ban companies from making decision on what to sell and what to price things at based on what is happening in the market. Even if you pass a law that says that, you'll never be able to prove a company did or didn't make a decision based on sales data. Imagine going to a grocery store in November in the USA and seeing 18,000 cases of sardines but no breadcrumbs or stuffing boxes because the ordering guy isn't allowed to know what is selling well and what is selling poorly. That's insanity.

    Second, market efficiency. The cornerstone of the economics of trade is that goods should be produced by the most efficient producer and sold by the most efficient seller to a market where they get a good return. By blocking companies from doing this, you're saying pricing should be made blindly, and you can't change based on what other actors do, what the market does, what customer want, because that would be "unfair". In the 90s I was part of a small business that built and sold PCs. Dell's volume ability absolutely destroyed the small-business PC maker industry, including mine. That wasn't unfair, that's economics.

    • klabb3  5 days ago

      Huh? I am talking here about EU regulations that are in effect today, and giving examples of healthy markets. This isn’t some hypothetical thing, they do it different than (post-Reagan) US but it’s not like the US has no rules, so free market vs equal-outcome-tyranny is a completely false dichotomy here.

      On topic, it seems like the US is focused on competitors ie preventing horizontal collusion and preferential agreements. At least after reading up a bit, that’s where EU is different, which considers vertical ones equally, such as supplier and distributors. In any case, that’s where antitrust seems to fall apart in practice – that depending on how you slice and dice the “market segments” you can craft a narrative where it’s impossible to prove even obvious perverse markets like health insurance - pharma.

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