> operated at a loss as a business tactic to force out competition and kill off local grocery stores
Wouldn't surprise me. I know a guy who invented a device for truckers that became ubiquitous in truck stops across the US. This would've been like 2014.
He refused to sell on Amazon, so Amazon duped his product and sold it at something crazy, like half price, until he agreed to list (at which point they dropped their competing product)
You are on a website called HackerNews, where people are encouraged to comment on articles or "posts". You are seeing this because you are looking at the comment section of one such post.
Selling items for less than they cost to produce is known as "dumping" in international trade (where it is generally disallowed by trade organizations) and can be illegal in the US if the intent is to eliminate competition [0]. That last factor can be hard to prove, and I don't think the FTC is doing much about anticompetitive behavior these days.
Yes, I can imagine it’s hard to prove, which is a pretty good indicator it’s a slippery concept to being with. Everyone wants to “eliminate the competition”, including your competition!
The predatory pricing pattern the FTC would in theory sure over would be: selling items at an artificially low price until the competition goes out of business, then raising prices once you are the only seller left standing. It's the second step that makes it anticompetitive instead of just competitive
What does it mean to be “the only seller left standing”? If somebody’s out there making big margins because they don’t face competition, competition is likely to emerge!
Yes, but the monopoly seller has already demonstrated that they will operate at a loss until their competitors go out of business, which is a pretty big deterrent to any new market entrants. They've also demonstrated that no one will be making any money until either the monopolist or the new entrant is out of business, so who would actually launch a new business in that environment?
Yeah, it is theoretically possible to have a marketplace where "predatory pricing" is an accepted though aggressive business strategy, and I'd say that we are roughly there in the US. But the original intent behind the law on the books was to make markets friendly to new entrants, even if that meant sometimes constraining what large participants were allowed to do.
This is an historical question I’m not equipped to answer, but I’d guess it was just the opposite: These laws were intended to protect incumbents from more efficient, better financed new competitors!
Standard grocery margins are usually lower, in the 30%-40% range, and are often much lower for promotional items. Rotating "loss leaders" to get people in the door are standard practice. IMHO that would make it hard to bring an antitrust action against a grocery chain, as pretty much every store engages in a limited amount of predatory pricing as a marketing technique.
50% is the standard retail markup, but it varies by industry.
I don't think Amazon was producing anything they sold in their grocery stores. They were probably buying the same white label items as everyone else for their store brand.
The Biden admin went slightly harder against anti-competitive actions and anti-consumer actions by companies and all the billionaires freaked out and poured money into Republican campaigns in 2024 in order to roll all that back.
What was rolled back? There was no major change in action whatsoever, only rhetoric, which is meaningless. As for funding, Trump raised substantially less in 2024 than 2020 while Harris raised more money than any campaign ever has, by a wide margin. [1] Dark money also overwhelmingly flowed to the DNC. [2] And a large chunk of all of Trump's funding came after the previous administration tried to imprison him, which rather freaked people out - even those not particularly fond of him. That also likely played a significant role in the more DGAF presidency we're seeing today relative to 2016.
To add onto sibling comment: it is specifically when they sell below cost to eliminate competition, with the goal of later being able to raise prices to recover those losses (and more) once they are the only player in town and can jack the prices up all they want. The later price elevations are what result in consumer harm, which is why it is illegal.
A big gorilla comes in and under prices the entire market. They can do that because they already have tons of money. They do this long enough to break the market and drive the competition out of business. Once the competitors are gone they jack up the prices to unprecedented levels because there's no more alternatives available and bleed the market for all the money.
This presupposes some athletic new competitor can’t enter the market and take the margin off the fat incumbent.
It’s why we have capital markets: If capturing a profitable opportunity requires spending some money, someone who wants to profit will send that money your way.
But it should only be because they indeed have lower margins or more efficient operations. It should not be funded by external money (other departments or investors), only to undercut competition too force them out only to raise prices to above the previous point after.
So a simple law could be that prices can only be raised to the point where they were at before the competition was squashed.
> Amazon duped his product and sold it at something crazy, like half price
Pricing below an appropriate measure of cost is generally considered predatory pricing. It is very difficult to enforce this, but that doesn't change the fact that it could be illegal and a violation of antitrust laws.
While the general premise is true (big company will try to rip off small company), Amazon doesn't have the magical power to get around patent law and the economic penalties are fairly harsh, which is why most companies don't do it. And no war chest of tech patents is going to get Amazon around a patent in the trucking industry because the inventor of the trucking gizmo couldn't care less about whether Amazon patented the right to make Alexa speak in tongues.
It's possible, and likely, that Alibaba vendors decided to rip off the product, but again...patent law is a useful tool for those who use it, and Amazon can be held liable for the sales of infringing products on its storefronts.
That's because criminal prosecution and product tort liability are not meaningful deterrents.
Patent litigation is a different thing entirely. The burden of proof is lower, and the payouts are higher.
To put things in perspective, Apple, Amazon, etc., have lost patent lawsuits worth hundreds of millions over trivial aspects of their devices that are just tiny parts out of thousands compromising the phone/tablet/whatever.
It seems a lot of people on HN fundamentally misunderstand how patent litigation works.
If this trucking device actually existed, and for some reason was being sold on Amazon, and the inventor had sued, he would be living large these days off the settlement.
Yes, Amazon sellers have copied products before, but those aren't Amazon. Amazon prefers to just buy the competition (see, e.g., Diapers.com and Zappos).
>“We have already initiated a more aggressive ‘plan to win’ against diapers.com,” longtime Amazon retail executive Doug Herrington apparently wrote in an email released by the committee. “To the extent that this plan undercuts the core diapers business for diapers.com, it will slow the adoption of Soap.com,” another company owned by Quidsi.
>Herrington called Quidsi Amazon’s No. 1 short-term competitor. “We need to match pricing on these guys no matter what the cost,” he said in the email.
I bet Quidsi was also selling the diapers at a loss since they were using UPS and Fedex, so not sure what the difference is if Amazon sells diapers at a loss or Quidsi was selling diapers at a loss.
The innovation would have been in the logistics buildout, which Quidsi obviously wasn’t doing.
The logistics buildout is arguably Amazon's biggest retail lynchpin.
However, it's built on a few fragile external costs.
First that comes to mind, is the comingling, which will theoretically resolve one way or another with their ending of comingling. Comingling almost certainly lowered logistics costs however...
Second being, the externality of how both warehouse and delivery workers are treated in the name of the almighty metrics. NGL I feel like the public's acceptance of their labor practices has ironically only accelerated the erosion of labor rights and worker treatment.
It's good to ask for a link (although not good to give one if this is your friend and it may affect their relationship with Amazon that you're talking about this in public), but you can't expect people to waste time thinking about your ringing ears.
Then don’t believe it and go on with your day. No one owes you a link to anything, especially if you simply don’t pay attention to Amazon’s widely-reported business practices.
Wouldn't surprise me. I know a guy who invented a device for truckers that became ubiquitous in truck stops across the US. This would've been like 2014.
He refused to sell on Amazon, so Amazon duped his product and sold it at something crazy, like half price, until he agreed to list (at which point they dropped their competing product)