• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Bezos Surpasses Gates as Richest Man

Redress said:
Undercutting prices is not a monopoly.
Click to expand...

No, but control over both the production and supply of 'consumer goods' is and that's the prize that Amazon are targeting.
 
Nilly said:
And quit when he realized his advice wasn't going to do a damn thing to change Trump's mind.



Hmmm I don't know about 'nowhere near close'.

They routinely put smaller competition out of business by undercutting (if you ever see a small seller put a niche item on Amazon, look for Amazon to make their own version and undercut them in the coming months - it's happened to a friend of mine and I've warned another who recently started selling there). Not to mention they're making moves towards the infrastructure underlying their business too. Their physical presence with Whole Food stores will allow them to compete with Fed Ex and UPS soon in terms of delivery.
Click to expand...

Redress said:
Undercutting prices is not a monopoly.
Click to expand...

No, it is not "a monopoly", but it most certainly can be abuse of monopoly power, depending on the circumstances.

Abuse of Monopoly Power | Economics Help

For example, in a market with high barriers to entry, a monopoly has the power to use predatory pricing to force smaller competitors out of business. Once they're out, it can then raise its prices to recoup losses and make plenty of profits on top. Because barriers to entry are high in this hypothetical market, it is long until - if ever - someone tries to reenter it to compete. And if we do not enforce anti-trust laws to stop that behavior, then nobody will reenter because the monopoly will always be able to temporarily drop prices low enough to drive them out of business.

This may not be the case with Amazon, but Nilly is not entirely wrong about the general proposition that monopolies can and have knock smaller competitors out with artificially lower prices.
 
Nilly said:
No, but control over both the production and supply of 'consumer goods' is and that's the prize that Amazon are targeting.
Click to expand...

While there is certainly a line which if crossed would be monopolistic. Amazon is still a long way from that line.
 
Mr Person said:
No, it is not "a monopoly", but it most certainly can be abuse of monopoly power, depending on the circumstances.

Abuse of Monopoly Power | Economics Help

For example, in a market with high barriers to entry, a monopoly has the power to use predatory pricing to force smaller competitors out of business. Once they're out, it can then raise its prices to recoup losses and make plenty of profits on top. Because barriers to entry are high in this hypothetical market, it is long until - if ever - someone tries to reenter it to compete. And if we do not enforce anti-trust laws to stop that behavior, then nobody will reenter because the monopoly will always be able to temporarily drop prices low enough to drive them out of business.

This may not be the case with Amazon, but Nilly is not entirely wrong about the general proposition that monopolies can and have knock smaller competitors out with artificially lower prices.
Click to expand...

Undercutting prices is a tool monopolies can use. It is a tool businesses that are in no way a monopoly can use as well. You can use a hammer or a gun to commit a crime. Owning a hammer or a gun is not an indication of criminal behavior.
 
Mr Person said:
No, it is not "a monopoly", but it most certainly can be abuse of monopoly power, depending on the circumstances.

Abuse of Monopoly Power | Economics Help

For example, in a market with high barriers to entry, a monopoly has the power to use predatory pricing to force smaller competitors out of business. Once they're out, it can then raise its prices to recoup losses and make plenty of profits on top. Because barriers to entry are high in this hypothetical market, it is long until - if ever - someone tries to reenter it to compete. And if we do not enforce anti-trust laws to stop that behavior, then nobody will reenter because the monopoly will always be able to temporarily drop prices low enough to drive them out of business.

This may not be the case with Amazon, but Nilly is not entirely wrong about the general proposition that monopolies can and have knock smaller competitors out with artificially lower prices.
Click to expand...

And high cost government regulation, which is why we have so much high cost government regulation, which Trump is taking a sludge hammer to in the effort to even the playing field.

We have got to get back to fair markets if we have any desire to save this country.

Either that or officially go to socialism, which we have already partly done.

"Privatize profits, socialize losses".
 
Redress said:
Undercutting prices is a tool monopolies can use. It is a tool businesses that are in no way a monopoly can use as well. You can use a hammer or a gun to commit a crime. Owning a hammer or a gun is not an indication of criminal behavior.
Click to expand...

Well, that's why I said it depends on the circumstances and that I'm not sure we can say that is what is going on with Amazon. I definitely think it is a reason to keep an eye on them, especially so when they are increasingly entering other markets.

Rarely in history has a monopoly or near-monopoly not attempted to abuse its powers in one way or another.
 
Mr Person said:
Well, that's why I said it depends on the circumstances and that I'm not sure we can say that is what is going on with Amazon. I definitely think it is a reason to keep an eye on them, especially so when they are increasingly entering other markets.

Rarely in history has a monopoly or near-monopoly not attempted to abuse its powers in one way or another.
Click to expand...

I do not think any company the size of amazon is not having an eye kept on them, and that is appropriate.
 
Redress said:
I do not think any company the size of amazon is not having an eye kept on them, and that is appropriate.
Click to expand...

Mr Person said:
No, it is not "a monopoly", but it most certainly can be abuse of monopoly power, depending on the circumstances.

Abuse of Monopoly Power | Economics Help

For example, in a market with high barriers to entry, a monopoly has the power to use predatory pricing to force smaller competitors out of business. Once they're out, it can then raise its prices to recoup losses and make plenty of profits on top. Because barriers to entry are high in this hypothetical market, it is long until - if ever - someone tries to reenter it to compete. And if we do not enforce anti-trust laws to stop that behavior, then nobody will reenter because the monopoly will always be able to temporarily drop prices low enough to drive them out of business.

This may not be the case with Amazon, but Nilly is not entirely wrong about the general proposition that monopolies can and have knock smaller competitors out with artificially lower prices.
Click to expand...

The problem with amazon is that it's not only 'one market'.

When M$ were a monopoly, they held a monopoly over the computer market, but Amazon are much broader than that.

Apart from having high market share in individual items, say Home Assistant's or something (their Alexa has something like 80% market share) Amazon are also a marketplace for other peoples products. Their position as a marketplace uniquely positions them to act in anti-competitive ways. Imagine if, during the 90's, the only way Apple could sell their products was to use a Microsoft platform.

When a producer wants to sell a product, if they want to get exposure then they pretty much have to put their product on Amazon. It's the first place people go when they look to buy new things. Amazon don't not take advantage of this. They track their marketplace to see which products sell well and which products don't. If they find that someone sells a successful product on their own marketplace they will enter that market themselves (where possible) and position their own product (Amazon Basics or whatever) above the marketplace product in search results.

Now Amazon is taking aim at the delivery companies. They've opened dozens of sorting centers and bought jumbo jets to transport their products around. These are taking serious bites out of Fed Ex and UPS share. And because Amazon controls both the sale of the product, and the shipping of the product, they can act in anti-competitive ways and give their own products precedence in the supply chain. If you buy an item on Amazon, it gets shipped by Amazon. With Amazon's purchase of Whole Foods they increased their physical footprint loads - but as soon as they announced it happened, and that they would soon start delivering food/meal services the stock of other food delivery services like Blue Apron and Hello Fresh plummeted. Why? Because Amazon have control over the supply chain. The food/meal delivery arm of Amazon has no competitive advantage in the market on it's own merits. It doesn't provide better food than Blue Apron, or better recipies or anything like that. It's just able to leverage its supply chain muscle and become the big player in the game.

We've seen monopolies in the past over companies in a single market, but whilst Amazon may not hold 100% market share in any one thing, their breadth of operation is a massive threat to marketplace diversity going forward, and I don't really think anti-monopoly rules currently in place will really address that.
 
Last edited:
Its good to be in the 3 commas club.
 
Hawkeye10 said:
And high cost government regulation, which is why we have so much high cost government regulation, which Trump is taking a sludge hammer to in the effort to even the playing field.

We have got to get back to fair markets if we have any desire to save this country.

Either that or officially go to socialism, which we have already partly done.

"Privatize profits, socialize losses".
Click to expand...

"Get back to fair markets"?

When did we ever have those?
 
PeteEU said:
LOL Gates has been doing that for over a decade and still manages to be in the top 3 every year.

Bezos fortune is also a tad odd.. since his company did not make a profit for 20 years... odd how it managed not to go under.
Click to expand...
That was due to rapid expansion of market share and market diversity, though. And it was a very good strategy. He played (very) longterm, rather than the usual "quarterly profits" game.

And it paid off!
 
PeteEU said:
LOL Gates has been doing that for over a decade and still manages to be in the top 3 every year.

Bezos fortune is also a tad odd.. since his company did not make a profit for 20 years... odd how it managed not to go under.
Click to expand...

Cheap debt and not getting shareholders hooked on profit. He could have turned a profit but instead he reinvested. As one of my favourite commentators on the market said Amazon never got their shareholders hooked on the crack that is profits, it is amazing what you can do with shareholder investment without having to turn ever increasing profits. Amazon also has access to billions in cheap debt.
 
Redress said:
We do not "bust up" companies because you are butthurt about them. We do for monopoly, but Amazon is nowhere near close to being one.
Click to expand...

You'll have to forgive him. He thinks he is smarter than Bezos or Gates. Long term side effects.
 
Nilly said:
And quit when he realized his advice wasn't going to do a damn thing to change Trump's mind.



Hmmm I don't know about 'nowhere near close'.

They routinely put smaller competition out of business by undercutting (if you ever see a small seller put a niche item on Amazon, look for Amazon to make their own version and undercut them in the coming months - it's happened to a friend of mine and I've warned another who recently started selling there). Not to mention they're making moves towards the infrastructure underlying their business too. Their physical presence with Whole Food stores will allow them to compete with Fed Ex and UPS soon in terms of delivery.
Click to expand...

Amazon for the majority of it's revenues is a retailer. It's other divisions are quite a bit smaller than its retail division. Amazon for the 2016 had revenues of 130 billion or so. For the same year, Walmart had revenues of over 400 billion.

Walmart use's its market power to put smaller stores in more rural towns out of business through it's low prices (which I understand are jacked up after the competition is gone). Amazon is not at risk of being broken up due to being a monopoly as it as a retailer is nowhere close to being a monopoly
 
Lord Tammerlain said:
Amazon for the majority of it's revenues is a retailer. It's other divisions are quite a bit smaller than its retail division. Amazon for the 2016 had revenues of 130 billion or so. For the same year, Walmart had revenues of over 400 billion.

Walmart use's its market power to put smaller stores in more rural towns out of business through it's low prices (which I understand are jacked up after the competition is gone). Amazon is not at risk of being broken up due to being a monopoly as it as a retailer is nowhere close to being a monopoly
Click to expand...

�� Hahaha what?

Have you heard of AWS by any chance? It's what half the internet is hosted on. The breadth of what Amazon 'is' is vast. They're not 'majorly' anything at this point really.
 
Last edited:
Nilly said:
�� Hahaha what?

Have you heard of AWS by any chance? It's what half the internet is hosted on. The breadth of what Amazon 'is' is vast. They're not 'majorly' anything at this point really.
Click to expand...

AWS is basically cloud computing, other companies outsourcing their computer requirements, which not all have done at this time. AWS for 2016 I believe had revenues of around 13 billion. I am sure that the dollar value of all the servers sold to companies to do computing in house rather than at Amazon was multiple times that figure. It would never be broken up because of 40% market share in a specific slice of the IT industry especially as the in house hosting is I expect multiple times that figure. Overall market share is about split with MS
 
Lord Tammerlain said:
AWS is basically cloud computing, other companies outsourcing their computer requirements, which not all have done at this time. AWS for 2016 I believe had revenues of around 13 billion. I am sure that the dollar value of all the servers sold to companies to do computing in house rather than at Amazon was multiple times that figure. It would never be broken up because of 40% market share in a specific slice of the IT industry especially as the in house hosting is I expect multiple times that figure. Overall market share is about split with MS
Click to expand...

Fun fact... Apple runs on Microsoft Cloud.

And Bezos aint the richest anymore, but might regain it later today if the stock goes up. :)
 
You must log in or register to reply here.
Back
Top Bottom