You might be right about Amazon's overall market-share. But Amazon's overall marketshare is irreverent. Bringing it up is like arguing that MS had no monopoly on Operating Systems because most software revenue went to other companies. We're arguing eBooks. Amazon's market share is roughly 2/3, and is rising fast because most other entrants to the market (notable Kobo and BN.com) have stopped investing in the us completely, and Apple only cares about selling shit to iPad users.
Now we're getting closer to something that is defensible. You want to argue that Amazon is developing a monopoly on eBooks, which is far more limited a market than book sales.
Which still makes it nonsensical to complain about Amazon's activity "lowering supply" or developing a monopoly. ebooks have Infinite. Digital. Supply.
The barriers to entry of an ebook store are practically non-existent, so I'm not sure what you're afraid of here. How does one abuse an ebook monopoly? Does Amazon hold a gun to Hachette's head and force them to sell their books for a minimum price?
If Amazon tried to force Hachette to have an exclusive ebook selling contract with itself, that *would* be monopolizing behavior - but that's also not what Amazon was doing.
BTW, you're veering well into troll territory again. Arguing definitions only works when you know the subject so well that you can be 110% sure the other guy isn't gonna say "Dude, I'm from Europe, here the names Elk and Moose are reversed." And you're claiming you didn't know "trust fund babies" are called that because they have Trusts filled with Funds.
The reason I'm harping on definitions is because you're using words nonsensically. I'm trying to figure out what you actually mean, since I'm making a good faith assumption you don't actually believe nonsense.
You simply cannot label Amazon an monopoly using an economic definition. Legal definitions are looser, but they still don't seem to qualify, and I can't help notice you've avoided creating any objective definition which can be objectively evaluated.
In short, you're using "monopoly" as a "badword" accusation, instead of an informative descriptive label. That is the core of my complaint here.
In all this talk about the harm of monopolies, I find it humorous how much fear you have of Amazon's potential "monopoly" on online sales, in defense of the only party with an actual monopoly - Hachette. (Copyright: government protected monopoly of intellectual property)
Hachette is the only one with the ability to monopolistically determine price and restrict supply, and you argue that they're the victims of Amazon's non-monopoly.
If your core point is that monopolies are bad, your choice of criticism is... odd.
If Sperry-Rand and IBM are sharing patents then there are, by definition, two suppliers.
Who were working together, a scenario covered under the Anti-Trust act.
Amazon has maybe a third of book sales. (2012 figure showed them at 27%) That means an overwhelming majority of book sales are not sold by Amazon - no monopoly.
Since Amazon is not colluding with its competitors in these news, there's no trust (multiple companies working together to create a "monopoly"), either.
As for "basic economics," you're forgetting that the strategies of a monopoly are orthogonal supply and demand. If you have a very low cost product, and you've got a monopoly on the low-cost version, you can keep margins high and keep prices low at the same time. You can also dictate the supply. You can choose to flood the market (which makes money in the short term, but adds large downside risk if the market turns and you have excess capacity you can't get rid of without blowing your monopoly), or you can intentionally not fulfill demand.
You offered a scenario of low supply, high margins, and low prices as if they came together. An artificially low supply can increase margins, but it's not going to reduce price - the price may absolutely be low, but it's going to be relatively higher than it could have been if the supply was artificially restricted.
If it works this will probably result in permanently lowered supply (the way Royalties work authors would be paid less if Hachette's cut went down, permanently lowering supply), prices would stay artificially low, and profits would be artificially high.
Hachette still has the same number of authors and publishing equipment. "Permanently lower supply" may happen in the future, but you can't lay the blame on Amazon. It's the publisher's job to supply demand; Amazon is a customer of Hachette. (They pay money for goods)
If the market is not working then Hachette caves, Apple can't force the discount, and it's got a very clear case of monopoly profits.
You keep using that word monopoly. I don't think it means what you think it means.
First off if you think "monopoly" has the legal meaning of "one supplier" you are a fucking moron. Seriously. That's the dumbest thing I have ever read on Slashdot, and I've dealt with idiots who admitted they were trolling me.
You suggested that Amazon having a "monopoly" on their own store means that they are legally a monopoly. My reference to "legal standards" was to your interpretation of the law - and I was pointing out how every business is a monopoly by your nonsensical interpretation of the law.
If Monopoly meant one supplier IBM would not have been a monopoly, Microsoft would not have been a monopoly. Their lawyers tried really hard to get off scot-free by pointing to Apple, but that shit simply does not work in a court of law.
"IBM was ruled to have created a monopoly via its 1956 patent-sharing agreement with Sperry-Rand," (http://en.wikipedia.org/wiki/History_of_IBM)
"Sperry Rand had tried to monopolize the electronic data processing industry" (http://en.wikipedia.org/wiki/Honeywell_v._Sperry_Rand)
IBM was convicted of being a monopoly by trying to become the sole company in control of a certain market. (by controlling a certain patent, which grants a legal monopoly on an invention)
"Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly"
For MS, they attempted to monopolize their industry by attacking competitors, so they tried to become the sole supplier for their market.
Look at the plain definition of the word:
1.control of market supply: a situation in which one company controls an industry or is the only provider of a product or service
To assert that single supplier has nothing to do with monopoly is to throw away language entirely.
Now what market does Amazon monopolize? Book sales? When there's so many different sale channels for said books?
A monopoly that artificially reduces the supply of a product to keep prices low, margins high, and competition out of the field...
Your failure to comprehend basic economics is showing.
Lower supply increases prices.
Lower prices reduce margins.
High margins are high profit, which draws competition, unlike your imaginary universe. ("Aw man, they're making high profits, let's forget competing in that market")
...but it's still fucking illegal.
Illegal like copyright and patents? Heh. You don't seem to realize that the only monopolies that do exist, exist by government intervention.
By making it impossible for most eBook buyers to acquire Hachette products they are restraining commerce.
By this legal standard you have just offered, every business is in violation of this law.
If I walk into a Barnes and Nobles and demand they sell me car tires and they refuse, they have made it "impossible" for me to acquire the product I want, "restraining commerce".
Any time a company tries to discontinue a product, they have made it "impossible" for me to acquire something I used to be able to - thus violating your ridiculous interpretation of the Sherman Anti-Trust act. Clearly no one is ever allowed to stop manufacturing/sellling anything, or they'd "restrict" consumer choice.
But why stop there? If they're selling something for more than I'd like to pay for it, clearly they are restricting my options as well! Anyone who doesn't sell me everything I want for $0.01 is also in violation!
Now that we've put the ridiculous interpretations aside - Amazon does not occupy 100% of an inter-state trade, on any good. They are limited by their business model to online retail; so that leaves mail-order, retail, and any other sale channels as competition. Seeing how Amazon has not to my knowledge attempted to block Hachette from selling books through other channels - they have not attempted to monopolize Hachette's products.
Since you're arguing Amazon isn't a monopoly, you're necessarily arguing most people don't buy on Amazon, which means you must conclude Apple was right.
Logical fail. Monopoly: Single seller.
Number of online sellers of books > 1. Thus, Amazon is not a monopoly. They do have a major market share, so they have the potential to "abuse market power" (which is very subjective), but they are not a monopoly in any meaningful sense of the word - there just isn't any mechanism for it - unless Congress passes a law forcing all online sales in the US to go through Amazon.
Because right now all your doing is moving me from my original position that Amazon is in really tricky legal waters and could be in deep shit with the antitrust authorities, into a very strong conclusion that Jeff Bezos is gonna spend the rest of his life in prison.
I'm guessing you decided to skip the IANAL disclaimer, because your legal argument is crap, and you clearly have no business judging the legal side of this issue, never mind the economic side of things. (Hint: Even if you did show that Amazon acted illegally, you haven't shown that it has economically harmed consumers)
Now, the super-cheap books do tend to cause a big spurt of purchases at the beginning. But once people have 2-300 books in their unread pile, their purchase rates drop back to what they were before. Except instead of spending a few hundred dollars a year, if they're lucky, they can spend $50. That's not enough for publishers to survive.
You're only looking at this in terms of the existing reader market.
At a lower price per book, it is easier for new readers to try out a series and see if they like it. There will be more people reading books - and perhaps making a lifelong hobby of it, as well as telling their friends about the books they enjoyed.
And yes, higher prices means a higher quality of entrant. Contrary to many people's opinion, authors are usually smart, educated people who actually have many options besides writing.
Wrong. Higher profits, not prices, attract higher quality authors. That's how you get them to quit their day job to focus on writing.
Profits are not based solely on margin per book (price), but margin per book times total books sold.
Reducing the publisher's cut increases the margin per book. Reducing the price to the consumer increases the number of books sold.
It's hard to predict the future, and certainly the publishers add some value to their products, but self-publishing is not going to kill the book industry.
Nowhere did I say or even imply that Amazon's practice should be banned or sanctioned.
You do think it's bad. I'm pointing out that the bad doesn't make sense.
Over my lifetime, I've already had two of my hobbies die (one by mail-order and one by Internet) as the consumer's saved enough money that the industry couldn't survive. It's a natural impulse, like eating your seed corn and the first time, I thought it was great. Five years later the hobby was dead (small hobby, didn't take much).
Why do you think higher prices would have saved them?
Higher prices mean a higher barrier to entry to the hobby - which isn't going to help it grow or stay alive.
Now books are a much larger deal, and I don't expect books to disappear, but it seems almost inevitable that that Amazonization of the industry will succeed, with more and more people self-publishing books, but fewer and fewer people reading them (even if books are $1 a piece, who has the time to read 100 books to find one that even has a chance of being entertaining?)
If only there was some way for people to share about books they like.
Maybe they could write a blurb on what they liked or disliked, and assign a satisfaction value to their purchase on a 5 point scale.
Alas, this wouldn't be a problem if only books were more expensive.
However, there will be a good decade of publishers and authors losing money while continuing to publish books with consumer's happily getting cheap books of decent quality.
If consumers are buying $1 books instead of $11 books, in quantities to move the market in that direction, there is more profit to be made, not less. That's not even accounting for the change in the market size as the hobby becomes more accessible.
Publishers currently take a large chunk of book sale revenues away from authors. A larger share of a larger pie is going to make it easier for authors to make money.
But you apparently have not read anything I wrote, because I just said exactly how a low-cost retailer could hurt consumers. I kinda assumed that you would be smart enough to make the leap from "Nick is bitching about Amazon reducing consumer choice," to "Nick is arguing that monopoly's like Amazon's are dangerous because they reduce consumer choice."
Amazon refusing to sell one particular business's product is not a meaningful reduction in consumer choice. Amazon is not the sole seller of books, or of books online. They have no "effective monopoly" outside of their own Amazon marketplace - and even then others can compete against Amazon, by selling products on Amazon.
1. Prove it. Seriously. I'm making a legal case, under the Sherman Anti-Trust Act, so to actually prove this you'll have to read the United States Code, not an Economics Textbook. Good luck proving this one either way. As far as I can tell Amazon is the definition of a "gray area" when it comes to antitrust law.
Wiki blurb on Anti-Trust Act: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]"[13]
So has Amazon monopolized book sales? No, there are still retail bookstores who can continue to sell the books.
Is Amazon trying to monopolize online book sales? Not particularly - other competitors exist, and they're not trying to force a publisher to only sell through them. They are trying to get a better contract, but that's normal business negotiation.
The only way you can call Amazon a monopoly is by using a nonsensical definition that does not fall under the language of this act. (Hint: If your definition makes every business a monopoly, your use of the word monopoly becomes useless)
2. Irrelevant. Amazon is a marketplace. It has a monopoly on itself. If it's marketplace is large enough that it can make or break publishers then it can, by definition, engage in anti-competitive behavior under the terms of the law. And it does not have the legal right to do that, no matter what your economic textbooks say.
When Amazon isn't allowed to negotiate what it sells in its own online store, you've effectively taken over ownership of Amazon. Who are you giving that ownership to, and what are you planning to do to compensate Amazon's owners?
Do you know the publisher in question was accused of being a part of a price-fixing cartel with Apple? They were trying to keep book prices high, and they don't have the "legal right to do that".
Now I learn that if Amazon wants to make book pricers lower, they don't have the "legal right to do that", either.
Essentially their market power allows them to dictate price and the price they demand is well below what the publishers can sustain themselves (as they currently exist) at. This means that they cannot (and will not) give the same price to the competition. This happened with the independent and the chain bookstores as well, and it pretty much drove the vast majority of the independents out of business.
And no, as has been made pretty clear, the strong majority of customers won't look anywhere else besides Amazon. Being unavailable in Amazon is roughly equivalent to having Google search delist your website. Sure, you still exist, and a small number of die-hards have you in their bookmarks, but you're essentially a dead-man (site?) walking.
The publishers don't have a right to exist as they currently are. Book publishing has changed and their model built when book publishing had high upfront costs doesn't work so well in an age where you can toss an ebook on the internet for practically nothing.
And no, as has been made pretty clear, the strong majority of customers won't look anywhere else besides Amazon.
That's not a monopoly. Every single one of those customers have the ability to choose any other Internet retailer. It's as simple as typing a new address in the browser. What is Amazon going to do, hijack their computer with a script?
There's market power there, but that's legitimately earned.
So, effectively for the publishers, Amazon *is* the only game in town, regardless of legal definitions, and Amazon is playing the Walmart game. This might work well for consumers, unless they're looking for a certain quality of goods, in which case, the practice is deeply worrisome.
In summary: you want to veto the choice of consumers for cheaper goods, so that publishers can sell them books for a higher price.
Because if you didn't do this, then Amazon would use their market power to sell consumers cheaper books, which is harmful.
No "monopoly" is not defined that way, but monopoly power is. You in fact defined it that way an entire two posts ago:
"So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?"
"Lowest cost seller of everything" is not a monopoly. Monopolies involve markets for specific goods. A monopoly on "everything" is impossible, because of the sheer number of goods and methods of distribution involved. If a company can figure out how to do that without use of government force - they deserve to be the "monopoly".
You also completely missed the point - which was that this so-called monopoly scenario ends up providing the lowest cost goods to the customers - maximizing value to them.
The rights of a monopolist are red herring.
You do not the right to force IBM to sell you a computer that can run several different operating systems. You do not have the right to force Microsoft to sell you a computer with a browser that can access non-MS-approved websites. But it happened.
/facepalm
1. Amazon is not a monopolist.
2. Amazon doesn't own the Internet.
3. The only "monopoly" Amazon has is the right to sell things on Amazon. You seem to be suggesting that everyone has a right to sell things on Amazon on their own terms, and that Amazon isn't allowed to negotiated the terms of that business contract.
If that was true Hachette wouldn't be losing sales.
So did buggy whip manufacturers. That's not evidence of a problem or a monopoly situation. Think, for crying out loud.
Tesla isn't doing it because they decided to go after a different market with a car with a reasonable range.
Why did they go after a different market in the first place? Profit margins. What does that tell you about the profit margins of scaled down EVs?
Designing an EV from the ground up reduces cost.
It also increases costs, because you're starting from scratch and testing new methods/configurations. Care to break down the fixed and marginal costs of the two choices?
Indeed. And as you charge more for the exact same thing, this is an information signal to your customers and competitors that they should look for cheaper alternatives.
And this article is that fact. Consumers are hurt when they lose choices. Amazon took away the choice to have Hachette books delivered in a timely manner. Since nobody noticed for months your wonderful theory that online retail can't be monopolized was proven wrong.
Monopoly is not defined as "power to `hurt' customers" or "customer faces a reduced number of choices", so all the rest of your post is a red herring.
Hachette books does not have an innate right to use Amazon to sell their wares. If they don't like the level of service provided by Amazon, Amazon can do NOTHING to stop Hachette from creating an online store for their readers and shipping books by their choice of USPS, UPS, or FedEx. They could even sell their readers ebooks and not deal with the logistics of killing trees and moving them around.
Or if that's too much work for Hachette, there a myriad of other online retailers who will gladly work with them to sell their wares.
The very idea of "muscling" in the online realm is ridiculous. Amazon can take their ball and go home but they can't force anyone else to use their ball.
You seem to have this silly idea that finite resources will suddenly catastrophically run out - to the complete surprise of the people who have the most to profit from maintaining a regular supply of said resources.
Your scenario requires these foolish suppliers to fail to notice that they're running out of the very resources they're selling - and thus selling at a price/quantity in a way that fuels constant/growing demand (which is non-optimal for profit) - until a day comes when the natural resource tap suddenly switches off with no warning.
By selling at cost, becoming dominant in the field, and forcing other players to negotiate steep discounts with you. Now when you sell at cost it's below everyone else's cost. Amazon does the first. That's pretty much the entire point of Amazon. They also do the second, and even have the muscle to force shippers to change their business practices. OTOH, pretty much any big online retailer tries to do the same damn thing.
So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?
If they decide they're a "monopoly" and jack up their prices - what do you think happens in the realm of online retail?
Let me get to the point. I don't think an "effective monopoly" is remotely possible in online sales, absent government intervention.
Is Amazon going to buy out all the search engines so people can't find cheaper retailers? How can Amazon jack up their prices, earn "monopoly profits", and keep competitors from popping up? If they continue to sell at cost to "kill" competitors, they're not harming customers.
Refusing to carry or demoting the books of a given publisher unless they get paid more is trickier, if they are found to be abusing their effective monopoly to force those concessions.
What on earth would an "effective monopoly" look like in online retail?
If Tesla can make a full-sized sedan with a 265 mile range (85KWh battery) for $73,570 while averaging a 25% profit margin there's no reason why Fiat shouldn't be able to make a profit selling a much smaller car with a much smaller battery and a much smaller range.
That's far too naÃve. You're assuming the costs and profits are linear, or that there the demand scales the same.
THAT A LOT OF FOOD IS WASTED DAILY. Like, A LOT. Perfectly good food gets destroyed to artificially inflate prices ALL THE TIME.
Food is cheap. "artificially inflate" sounds like conspiracy thinking, which isn't necessary to explain waste - there's a cost to using materials efficiently, so sometimes we don't pay the cost to go beyond 70, 50, or 30 percent efficiency due to diminishing returns.
In this case, potentially contaminated food wasn't worth the risk. In the US, the prime area to "give it away", there's no problem of people starving to death. Other parts of the world where it might do good are in other parts of the world - shipping the food adds costs - and again, risk of it being bad food, not "perfectly good food".
This really is the dark ages because we have a lot of the world's problems (if not all) perfectly solveable, but very little is done about it.
You utopians need to pay more attention to the failed utopians from the last century. Life's problems are not that easy, because people are complicated, and the systems we live in aren't simple either.
Be it future generations on archeological digs or some other entity examing our time, doubtless the future will see this as one of the dark ages. The waste alone is shamefull. I understand Costco's move, if they are worried about litigation, but wasted food always makes me feel bad.
Dark ages because some peanut butter was wasted? It's food, and cheap food at that - you're going to point to this event as a badge of shame over all the human events of the 20th or 21st century?
Slashdot Mirror
You might be right about Amazon's overall market-share. But Amazon's overall marketshare is irreverent. Bringing it up is like arguing that MS had no monopoly on Operating Systems because most software revenue went to other companies. We're arguing eBooks. Amazon's market share is roughly 2/3, and is rising fast because most other entrants to the market (notable Kobo and BN.com) have stopped investing in the us completely, and Apple only cares about selling shit to iPad users.
Now we're getting closer to something that is defensible. You want to argue that Amazon is developing a monopoly on eBooks, which is far more limited a market than book sales.
Which still makes it nonsensical to complain about Amazon's activity "lowering supply" or developing a monopoly. ebooks have Infinite. Digital. Supply.
The barriers to entry of an ebook store are practically non-existent, so I'm not sure what you're afraid of here. How does one abuse an ebook monopoly? Does Amazon hold a gun to Hachette's head and force them to sell their books for a minimum price?
If Amazon tried to force Hachette to have an exclusive ebook selling contract with itself, that *would* be monopolizing behavior - but that's also not what Amazon was doing.
BTW, you're veering well into troll territory again. Arguing definitions only works when you know the subject so well that you can be 110% sure the other guy isn't gonna say "Dude, I'm from Europe, here the names Elk and Moose are reversed." And you're claiming you didn't know "trust fund babies" are called that because they have Trusts filled with Funds.
The reason I'm harping on definitions is because you're using words nonsensically. I'm trying to figure out what you actually mean, since I'm making a good faith assumption you don't actually believe nonsense.
You simply cannot label Amazon an monopoly using an economic definition. Legal definitions are looser, but they still don't seem to qualify, and I can't help notice you've avoided creating any objective definition which can be objectively evaluated.
In short, you're using "monopoly" as a "badword" accusation, instead of an informative descriptive label. That is the core of my complaint here.
In all this talk about the harm of monopolies, I find it humorous how much fear you have of Amazon's potential "monopoly" on online sales, in defense of the only party with an actual monopoly - Hachette. (Copyright: government protected monopoly of intellectual property)
Hachette is the only one with the ability to monopolistically determine price and restrict supply, and you argue that they're the victims of Amazon's non-monopoly.
If your core point is that monopolies are bad, your choice of criticism is ... odd.
If Sperry-Rand and IBM are sharing patents then there are, by definition, two suppliers.
Who were working together, a scenario covered under the Anti-Trust act.
Amazon has maybe a third of book sales. (2012 figure showed them at 27%) That means an overwhelming majority of book sales are not sold by Amazon - no monopoly.
Since Amazon is not colluding with its competitors in these news, there's no trust (multiple companies working together to create a "monopoly"), either.
As for "basic economics," you're forgetting that the strategies of a monopoly are orthogonal supply and demand. If you have a very low cost product, and you've got a monopoly on the low-cost version, you can keep margins high and keep prices low at the same time. You can also dictate the supply. You can choose to flood the market (which makes money in the short term, but adds large downside risk if the market turns and you have excess capacity you can't get rid of without blowing your monopoly), or you can intentionally not fulfill demand.
You offered a scenario of low supply, high margins, and low prices as if they came together. An artificially low supply can increase margins, but it's not going to reduce price - the price may absolutely be low, but it's going to be relatively higher than it could have been if the supply was artificially restricted.
If it works this will probably result in permanently lowered supply (the way Royalties work authors would be paid less if Hachette's cut went down, permanently lowering supply), prices would stay artificially low, and profits would be artificially high.
Hachette still has the same number of authors and publishing equipment. "Permanently lower supply" may happen in the future, but you can't lay the blame on Amazon. It's the publisher's job to supply demand; Amazon is a customer of Hachette. (They pay money for goods)
If the market is not working then Hachette caves, Apple can't force the discount, and it's got a very clear case of monopoly profits.
You keep using that word monopoly. I don't think it means what you think it means.
realize that while the scientific approach is better
Is that why its believers fail to understand the nature of their own belief?
Because I find it highly amusing to get an argument that boils down to, "I believe I have no beliefs!"
Faith is belief in something not yet proven, but "without evidence" is going too far.
Do you think the law of physics will behave the same tomorrow?
First off if you think "monopoly" has the legal meaning of "one supplier" you are a fucking moron. Seriously. That's the dumbest thing I have ever read on Slashdot, and I've dealt with idiots who admitted they were trolling me.
You suggested that Amazon having a "monopoly" on their own store means that they are legally a monopoly. My reference to "legal standards" was to your interpretation of the law - and I was pointing out how every business is a monopoly by your nonsensical interpretation of the law.
If Monopoly meant one supplier IBM would not have been a monopoly, Microsoft would not have been a monopoly. Their lawyers tried really hard to get off scot-free by pointing to Apple, but that shit simply does not work in a court of law.
"IBM was ruled to have created a monopoly via its 1956 patent-sharing agreement with Sperry-Rand," (http://en.wikipedia.org/wiki/History_of_IBM)
"Sperry Rand had tried to monopolize the electronic data processing industry" (http://en.wikipedia.org/wiki/Honeywell_v._Sperry_Rand)
IBM was convicted of being a monopoly by trying to become the sole company in control of a certain market. (by controlling a certain patent, which grants a legal monopoly on an invention)
http://en.wikipedia.org/wiki/United_States_v._Microsoft
"Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly"
For MS, they attempted to monopolize their industry by attacking competitors, so they tried to become the sole supplier for their market.
Look at the plain definition of the word:
1.control of market supply: a situation in which one company controls an industry or is the only provider of a product or service
To assert that single supplier has nothing to do with monopoly is to throw away language entirely.
Now what market does Amazon monopolize? Book sales? When there's so many different sale channels for said books?
A monopoly that artificially reduces the supply of a product to keep prices low, margins high, and competition out of the field ...
Your failure to comprehend basic economics is showing.
Lower supply increases prices.
Lower prices reduce margins.
High margins are high profit, which draws competition, unlike your imaginary universe. ("Aw man, they're making high profits, let's forget competing in that market")
...but it's still fucking illegal.
Illegal like copyright and patents? Heh. You don't seem to realize that the only monopolies that do exist, exist by government intervention.
By making it impossible for most eBook buyers to acquire Hachette products they are restraining commerce.
By this legal standard you have just offered, every business is in violation of this law.
If I walk into a Barnes and Nobles and demand they sell me car tires and they refuse, they have made it "impossible" for me to acquire the product I want, "restraining commerce".
Any time a company tries to discontinue a product, they have made it "impossible" for me to acquire something I used to be able to - thus violating your ridiculous interpretation of the Sherman Anti-Trust act. Clearly no one is ever allowed to stop manufacturing/sellling anything, or they'd "restrict" consumer choice.
But why stop there? If they're selling something for more than I'd like to pay for it, clearly they are restricting my options as well! Anyone who doesn't sell me everything I want for $0.01 is also in violation!
Now that we've put the ridiculous interpretations aside - Amazon does not occupy 100% of an inter-state trade, on any good. They are limited by their business model to online retail; so that leaves mail-order, retail, and any other sale channels as competition. Seeing how Amazon has not to my knowledge attempted to block Hachette from selling books through other channels - they have not attempted to monopolize Hachette's products.
Since you're arguing Amazon isn't a monopoly, you're necessarily arguing most people don't buy on Amazon, which means you must conclude Apple was right.
Logical fail. Monopoly: Single seller.
Number of online sellers of books > 1. Thus, Amazon is not a monopoly. They do have a major market share, so they have the potential to "abuse market power" (which is very subjective), but they are not a monopoly in any meaningful sense of the word - there just isn't any mechanism for it - unless Congress passes a law forcing all online sales in the US to go through Amazon.
Because right now all your doing is moving me from my original position that Amazon is in really tricky legal waters and could be in deep shit with the antitrust authorities, into a very strong conclusion that Jeff Bezos is gonna spend the rest of his life in prison.
I'm guessing you decided to skip the IANAL disclaimer, because your legal argument is crap, and you clearly have no business judging the legal side of this issue, never mind the economic side of things. (Hint: Even if you did show that Amazon acted illegally, you haven't shown that it has economically harmed consumers)
Now, the super-cheap books do tend to cause a big spurt of purchases at the beginning. But once people have 2-300 books in their unread pile, their purchase rates drop back to what they were before. Except instead of spending a few hundred dollars a year, if they're lucky, they can spend $50. That's not enough for publishers to survive.
You're only looking at this in terms of the existing reader market.
At a lower price per book, it is easier for new readers to try out a series and see if they like it. There will be more people reading books - and perhaps making a lifelong hobby of it, as well as telling their friends about the books they enjoyed.
And yes, higher prices means a higher quality of entrant. Contrary to many people's opinion, authors are usually smart, educated people who actually have many options besides writing.
Wrong. Higher profits, not prices, attract higher quality authors. That's how you get them to quit their day job to focus on writing.
Profits are not based solely on margin per book (price), but margin per book times total books sold.
Reducing the publisher's cut increases the margin per book. Reducing the price to the consumer increases the number of books sold.
It's hard to predict the future, and certainly the publishers add some value to their products, but self-publishing is not going to kill the book industry.
Nowhere did I say or even imply that Amazon's practice should be banned or sanctioned.
You do think it's bad. I'm pointing out that the bad doesn't make sense.
Over my lifetime, I've already had two of my hobbies die (one by mail-order and one by Internet) as the consumer's saved enough money that the industry couldn't survive. It's a natural impulse, like eating your seed corn and the first time, I thought it was great. Five years later the hobby was dead (small hobby, didn't take much).
Why do you think higher prices would have saved them?
Higher prices mean a higher barrier to entry to the hobby - which isn't going to help it grow or stay alive.
Now books are a much larger deal, and I don't expect books to disappear, but it seems almost inevitable that that Amazonization of the industry will succeed, with more and more people self-publishing books, but fewer and fewer people reading them (even if books are $1 a piece, who has the time to read 100 books to find one that even has a chance of being entertaining?)
If only there was some way for people to share about books they like.
Maybe they could write a blurb on what they liked or disliked, and assign a satisfaction value to their purchase on a 5 point scale.
Alas, this wouldn't be a problem if only books were more expensive.
However, there will be a good decade of publishers and authors losing money while continuing to publish books with consumer's happily getting cheap books of decent quality.
If consumers are buying $1 books instead of $11 books, in quantities to move the market in that direction, there is more profit to be made, not less. That's not even accounting for the change in the market size as the hobby becomes more accessible.
Publishers currently take a large chunk of book sale revenues away from authors. A larger share of a larger pie is going to make it easier for authors to make money.
But you apparently have not read anything I wrote, because I just said exactly how a low-cost retailer could hurt consumers. I kinda assumed that you would be smart enough to make the leap from "Nick is bitching about Amazon reducing consumer choice," to "Nick is arguing that monopoly's like Amazon's are dangerous because they reduce consumer choice."
Amazon refusing to sell one particular business's product is not a meaningful reduction in consumer choice. Amazon is not the sole seller of books, or of books online. They have no "effective monopoly" outside of their own Amazon marketplace - and even then others can compete against Amazon, by selling products on Amazon.
1. Prove it. Seriously. I'm making a legal case, under the Sherman Anti-Trust Act, so to actually prove this you'll have to read the United States Code, not an Economics Textbook. Good luck proving this one either way. As far as I can tell Amazon is the definition of a "gray area" when it comes to antitrust law.
Wiki blurb on Anti-Trust Act: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]"[13]
So has Amazon monopolized book sales? No, there are still retail bookstores who can continue to sell the books.
Is Amazon trying to monopolize online book sales? Not particularly - other competitors exist, and they're not trying to force a publisher to only sell through them. They are trying to get a better contract, but that's normal business negotiation.
The only way you can call Amazon a monopoly is by using a nonsensical definition that does not fall under the language of this act. (Hint: If your definition makes every business a monopoly, your use of the word monopoly becomes useless)
2. Irrelevant. Amazon is a marketplace. It has a monopoly on itself. If it's marketplace is large enough that it can make or break publishers then it can, by definition, engage in anti-competitive behavior under the terms of the law. And it does not have the legal right to do that, no matter what your economic textbooks say.
When Amazon isn't allowed to negotiate what it sells in its own online store, you've effectively taken over ownership of Amazon. Who are you giving that ownership to, and what are you planning to do to compensate Amazon's owners?
Do you know the publisher in question was accused of being a part of a price-fixing cartel with Apple? They were trying to keep book prices high, and they don't have the "legal right to do that".
Now I learn that if Amazon wants to make book pricers lower, they don't have the "legal right to do that", either.
What purpose are these laws serving?
Essentially their market power allows them to dictate price and the price they demand is well below what the publishers can sustain themselves (as they currently exist) at. This means that they cannot (and will not) give the same price to the competition. This happened with the independent and the chain bookstores as well, and it pretty much drove the vast majority of the independents out of business.
And no, as has been made pretty clear, the strong majority of customers won't look anywhere else besides Amazon. Being unavailable in Amazon is roughly equivalent to having Google search delist your website. Sure, you still exist, and a small number of die-hards have you in their bookmarks, but you're essentially a dead-man (site?) walking.
The publishers don't have a right to exist as they currently are. Book publishing has changed and their model built when book publishing had high upfront costs doesn't work so well in an age where you can toss an ebook on the internet for practically nothing.
And no, as has been made pretty clear, the strong majority of customers won't look anywhere else besides Amazon.
That's not a monopoly. Every single one of those customers have the ability to choose any other Internet retailer. It's as simple as typing a new address in the browser. What is Amazon going to do, hijack their computer with a script?
There's market power there, but that's legitimately earned.
So, effectively for the publishers, Amazon *is* the only game in town, regardless of legal definitions, and Amazon is playing the Walmart game. This might work well for consumers, unless they're looking for a certain quality of goods, in which case, the practice is deeply worrisome.
In summary: you want to veto the choice of consumers for cheaper goods, so that publishers can sell them books for a higher price.
Because if you didn't do this, then Amazon would use their market power to sell consumers cheaper books, which is harmful.
Expensive books protect consumers. Um, yay?
No "monopoly" is not defined that way, but monopoly power is. You in fact defined it that way an entire two posts ago:
"So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?"
"Lowest cost seller of everything" is not a monopoly. Monopolies involve markets for specific goods. A monopoly on "everything" is impossible, because of the sheer number of goods and methods of distribution involved. If a company can figure out how to do that without use of government force - they deserve to be the "monopoly".
You also completely missed the point - which was that this so-called monopoly scenario ends up providing the lowest cost goods to the customers - maximizing value to them.
The rights of a monopolist are red herring. You do not the right to force IBM to sell you a computer that can run several different operating systems. You do not have the right to force Microsoft to sell you a computer with a browser that can access non-MS-approved websites. But it happened.
1. Amazon is not a monopolist.
2. Amazon doesn't own the Internet.
3. The only "monopoly" Amazon has is the right to sell things on Amazon. You seem to be suggesting that everyone has a right to sell things on Amazon on their own terms, and that Amazon isn't allowed to negotiated the terms of that business contract.
If that was true Hachette wouldn't be losing sales.
So did buggy whip manufacturers. That's not evidence of a problem or a monopoly situation. Think, for crying out loud.
A free market is not "status quo forever".
Tesla isn't doing it because they decided to go after a different market with a car with a reasonable range.
Why did they go after a different market in the first place? Profit margins. What does that tell you about the profit margins of scaled down EVs?
Designing an EV from the ground up reduces cost.
It also increases costs, because you're starting from scratch and testing new methods/configurations. Care to break down the fixed and marginal costs of the two choices?
Indeed. And as you charge more for the exact same thing, this is an information signal to your customers and competitors that they should look for cheaper alternatives.
And this article is that fact. Consumers are hurt when they lose choices. Amazon took away the choice to have Hachette books delivered in a timely manner. Since nobody noticed for months your wonderful theory that online retail can't be monopolized was proven wrong.
Monopoly is not defined as "power to `hurt' customers" or "customer faces a reduced number of choices", so all the rest of your post is a red herring.
Hachette books does not have an innate right to use Amazon to sell their wares. If they don't like the level of service provided by Amazon, Amazon can do NOTHING to stop Hachette from creating an online store for their readers and shipping books by their choice of USPS, UPS, or FedEx. They could even sell their readers ebooks and not deal with the logistics of killing trees and moving them around.
Or if that's too much work for Hachette, there a myriad of other online retailers who will gladly work with them to sell their wares.
The very idea of "muscling" in the online realm is ridiculous. Amazon can take their ball and go home but they can't force anyone else to use their ball.
Humans aren't bacteria.
You seem to have this silly idea that finite resources will suddenly catastrophically run out - to the complete surprise of the people who have the most to profit from maintaining a regular supply of said resources.
Your scenario requires these foolish suppliers to fail to notice that they're running out of the very resources they're selling - and thus selling at a price/quantity in a way that fuels constant/growing demand (which is non-optimal for profit) - until a day comes when the natural resource tap suddenly switches off with no warning.
By selling at cost, becoming dominant in the field, and forcing other players to negotiate steep discounts with you. Now when you sell at cost it's below everyone else's cost. Amazon does the first. That's pretty much the entire point of Amazon. They also do the second, and even have the muscle to force shippers to change their business practices. OTOH, pretty much any big online retailer tries to do the same damn thing.
So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?
If they decide they're a "monopoly" and jack up their prices - what do you think happens in the realm of online retail?
Let me get to the point. I don't think an "effective monopoly" is remotely possible in online sales, absent government intervention.
Is Amazon going to buy out all the search engines so people can't find cheaper retailers? How can Amazon jack up their prices, earn "monopoly profits", and keep competitors from popping up? If they continue to sell at cost to "kill" competitors, they're not harming customers.
Talking about "online tyrants" is ridiculous.
Refusing to carry or demoting the books of a given publisher unless they get paid more is trickier, if they are found to be abusing their effective monopoly to force those concessions.
What on earth would an "effective monopoly" look like in online retail?
How would you even "muscle out" the competition?
, environmental issues, and limited resources, isn't something that the free market will handle when left to its own devices.
You apparently have no concept of what a supply curve is.
If Tesla can make a full-sized sedan with a 265 mile range (85KWh battery) for $73,570 while averaging a 25% profit margin there's no reason why Fiat shouldn't be able to make a profit selling a much smaller car with a much smaller battery and a much smaller range.
That's far too naÃve. You're assuming the costs and profits are linear, or that there the demand scales the same.
If it's so easy - why isn't Tesla doing it?
To be a little more precise, we don't have the same result - we have different results with the same effects.
... but of course not in the somewhat silly sense that every mutation would happen exactly the same.
Thus, that evolutionary path is unrepeatable and unpredictable. It's not silly to notice how random mutation interacts with evolutionary theory.
Because there are multiple paths to the same result, "selecting for the same result" is not guaranteed to follow a specific path.
That is, if evolution is driven by random mutation, where the selection of a particular path is a random result.
THAT A LOT OF FOOD IS WASTED DAILY. Like, A LOT. Perfectly good food gets destroyed to artificially inflate prices ALL THE TIME.
Food is cheap. "artificially inflate" sounds like conspiracy thinking, which isn't necessary to explain waste - there's a cost to using materials efficiently, so sometimes we don't pay the cost to go beyond 70, 50, or 30 percent efficiency due to diminishing returns.
In this case, potentially contaminated food wasn't worth the risk. In the US, the prime area to "give it away", there's no problem of people starving to death. Other parts of the world where it might do good are in other parts of the world - shipping the food adds costs - and again, risk of it being bad food, not "perfectly good food".
This really is the dark ages because we have a lot of the world's problems (if not all) perfectly solveable, but very little is done about it.
You utopians need to pay more attention to the failed utopians from the last century. Life's problems are not that easy, because people are complicated, and the systems we live in aren't simple either.
Dark ages because some peanut butter was wasted? It's food, and cheap food at that - you're going to point to this event as a badge of shame over all the human events of the 20th or 21st century?
Great that your boss is watching out for you, yikes that your company has to lie to itself to hire and keep qualified personnel.
Something's broken, and it's beyond individuals to fix it ...