Amazon seller/distributor/agency here; I've been in the space for over a decade.

The title is a little clickbait-y. As far as I understand it:

1. Think of Amazon as a search engine for products. 2. Amazon wants its site to be the lowest-price destination for products. 3. If Amazon finds your product on another website for lower than its own website, it'll just hide your listing from the search -- this is meant to be pro-consumer (when you go to Amazon you'll get the lowest price).

This is where it gets a bit more complicated: 4. Amazon sells ~40% of its goods under its own purchasing arm, known to sellers as Vendor Central. (These are items shipped and sold by Amazon.com). This purchasing arm wants X% margins from *brands, based on whatever their internal targets. From what I've experienced personally -- their terms are generally better than their competitors (Walmart/Target/Costco/Sams), so it's generally a no-brainer to sell directly to them when I can instead of selling direct.

So when 4 has a conflict of interest with #1-3, you get the systemic effect that in order for the sellers to get their **sweet purchase orders from Amazon, they now need to raise prices elsewhere so the purchasing arm gets their cut. The sellers don't HAVE to sell to Amazon, but then they'd miss out on giant POs from Amazon at good terms.

Designing a system to incentivize sellers to have their lowest prices on Amazon... I'm not sure if calling it a "widespread scheme to inflate prices" is the fairest thing.

*edit: Historically, Amazon VC basically ran at near break-even under Jeff, "your margin is my opportunity" and all that. Since Andy took over there's been a reshuffling of chairs and the different business units have different margin requirements now.

**edit2: the price inflation mostly affects big brands that sell 8+ figs/yr on Amazon, because smaller sellers don't get POs from VC (too small to bother).

Two things jumped out at me.

1. Average American spends THREE THOUSAND DOLLAR year at Amazon. That’s staggering.

2. As of now the trial is not scheduled to begin until January 2027 (although the discussed injunction is meant to address that). I believe the length of time required to get a decision in court is the single biggest impediment to justice being served. It usually waters down the final judgment, makes costs prohibitive for plaintiffs, and allows perpetrators to continue benefiting from illegal behavior indefinitely. In some cases, the defendant can be elected President in the interim eliminating any chance of facing a court decision.

It is a well-documented fact that Amazon forces it's sellers to "fix" their prices to match the Amazon price. If you sell on Amazon, you're not allowed to sell the same item for less ANYWHERE. This- coupled with Amazon's insane fees- should be a huge red flag to the Consumer Financial Protection Bureau, and maybe a Attorney General can get them to do their damn job and crack down on it... I wouldn't hold my breath though.

> sued Amazon for prohibiting vendors that sold on its website from offering discounts outside of Amazon... to make sure that sellers can’t sell through a different store or even through their own site with a lower price...

First, this is not new. It's been stated policy for years.

Second, manufacturers get around it in a clever way. They always list their items on their own site at the same price as at Amazon... but then magically almost always seem to have a 20% or 25%-off sitewide coupon available, whether it's for first-time customers, or "spinning the wheel" that pops up, etc.

So I don't know how much this is really raising actual prices in the end.

Otherwise, I'm not sure how to feel about it, because pricing contracts are common on both ends. Manufacturers frequently only sell to retailers who promise they won't charge less than the MSRP, and large retailers similarly often require "most-favored-nation" pricing, so they can always claim they have the lowest prices. If you want to end these practices, then it's only fair to have a law prohibiting it across the board, rather than singling out Amazon.

Cancelled my Prime subscription last month after the past year of worsening experiences with Amazon:

Received several orders that were returned items, with broken open packaging and sometimes the item was something else entirely, purely put there for weight by whoever returned it.

When I went to return some things at a major Amazon distribution center, the return area was closed for the week for some sort of construction or renovation, with no indication of that anywhere on the site. The only messaging was a piece of paper in the window once you got there.

At another separate major distribution center, the return area was a small room with pieces of paper taped to a door with an arrow pointing to the Amazon lockers where the returns are accepted.

Orders are now often so delayed that it makes the Prime subscription pointless. Have had multiple orders over the past year that didn't ship for 3 or 4 days.

Amazon listings are almost half Sponsored listings now, and there are unrelated ads on the side of listings.

Half of the listings are some random made-up brand name, like XIJGNU, which is just a Chinese seller selling low-quality products, and when the reviews get bad enough, they re-list the product under another made-up brand name.

Fake reviews were already rampant before LLMs, but now reviews are effectively useless because they are so easy to fake.

On the one hand, this is good to see. On the other hand, like basically every such thing, it's too late and way, way, too little. It is pointless to try to chip away at Amazon by saying "oh you did this, oh you did that, oh you harmed people this way, oh you cheated this other way". It's like if a house is on fire and you try to stop it from spreading to nearby houses by catching each flying ember individually. You need to put the fire out.

Companies with as much market power as Amazon simply cannot be allowed to exist. It was a mistake to ever allow it and every response that is not aimed at a total shattering of the company is another mistake. No retail business of any kind can ever be safe when companies like Amazon exist. (And although this article is about Amazon, the same is true of many other companies as well, like Walmart.)

The article cites Amazon prohibiting sellers from selling their products for less on other platforms as anticompetitive behavior. I don’t doubt that this is happening, nor that it’s anticompetitive.

That being said, anyone who’s operated a two-sided marketplace knows that one of the biggest problems is consumers using your site as an index, and then seeking to dodge your fee by meeting with the seller on another platform, where they don’t have to pay it. This was a big problem for my startup.

This is a negative externality, because they’re extracting value from your platform (the list of sellers, products, prices, ratings, etc.), without paying for that value. If left unchecked, this could make running the platform financially unviable. One way to prevent this is to paywall your platform, but not every consumer wants to pay a subscription.

I think it’d be fair for Amazon to prohibit sellers advertising other platforms on its own, but prohibiting them from offering lower prices outside of Amazon outright definitely seems anticompetitive.

I can say how this worked for books. Used to be Amazon didn't enforce their pricing policy. So a bookseller could price their book's list price lower on a different site than on amazon. Amazon would discount to match, but pay the bookseller based on the list price.

It was effectively a way to get an excess commission out of amazon if you printed through their printing arm, Createspace/KDP. Not sure if this worked the same for non print on demand books but if you printed through createspace you could set a higher list price and get royalties that were about 100% of the actual sale price.

No idea if the same mechanic is in play with the FBA rules but it seems very plausible to me that the largest impact is has is closing exploits like this.

That doesn't mean it doesn't also entrench market position, raise a few prices at the margin etc but it's very easy to miss the potential for gaming rules, legally, unless you're actively in the system. If an incentive is there the market incentive will be to use it.

Lina Khan is now in Mamdani's cabinet. Maybe NY state and California can team up on this.

I saw through the Amazon Prime scam about four years ago and canceled my membership. Counterfeit products, obviously returned/resold products, and failure to meet delivery date promises. And prices steadily rising.

I just go to Walmart now. And Walmart is no choir boy either but at least I can see what I'm buying.