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[water_wendi]

"Report: How Amazon's Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities"

i was originally going to post this in the Trump vs Amazon thread but after typing it out it felt a little off-topic to the thread and that the report was important enough to have its own thread. Did a couple searches and i didnt see a thread on GAF so here we are.

Amazon now charges sales tax in all states, according to this:
http://money.cnn.com/2017/03/29/technology/amazon-sales-tax/index.html

Forget all the subsidies and tax breaks.. this sales tax stuff is true as of April 1, 2017. The entire rest of the duration of Amazons existence it has received an unfair tax advantage above physical competition that has been a overall detriment to the nation. Now there is a monster so vast and immense combating the problem seems impossible.

Heres a report from late last year:

Report: How Amazon's Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities

Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online. Amazon sells more books, toys, and by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business. Its market power now rivals or exceeds that of Walmart, and it stands only to grow: Within five years, one-fifth of the U.S.'s $3.6 trillion retail market will have shifted online, and Amazon is on track to capture two-thirds of that share.

But describing Amazon's reach in the retail sector describes only one of the company's tentacles. Amazon is far more than a big, aggressive retailer. As we show in this report, Amazon increasingly controls the underlying infrastructure of the economy. Its Marketplace for third-party sellers has become the dominant platform for digital commerce. Its Amazon Web Services division provides the cloud computing backbone for much of the country, powering everyone from Netflix to the CIA. Its distribution network includes warehouses and delivery stations in nearly every major U.S. city, and it's rapidly moving into shipping and package delivery for both itself and others. By controlling this critical infrastructure, Amazon both competes with other companies and sets the terms by which these same rivals can reach the market. Locally owned retailers and independent manufacturers have been among the hardest hit.

i wish i could just bold the whole paragraph. Anyways so here the breakdown of the report:

In the first section, Monopolizing the Economy, we look at how Amazon is using its market power to eliminate competition and take control of one industry after another, leaving us with an economy that is less diverse and innovative, and which affords fewer opportunities for businesses to start and grow.

In the second section, Undermining Jobs and Wages, we examine Amazon's labor model and find that work inside its 190
distribution facilities resembles labor's distant past more than a promising future, with many workers performing grueling and under-paid jobs, getting trapped in precarious temporary positions, or doing on-demand assignments that are paid by the piece.

In the third section, Weakening Communities, we explore how Amazon is upending the longstanding relationship between commerce and place, changing the way that our communities feel and threatening the revenue streams and social capital that they depend on to function.

In the final section, The Policy Response to Amazon, we begin by looking at how Amazon's rise has been heavily assisted by government support, including subsidies and tax advantages worth billions of dollars.

And finally, we turn to what to do about it, sketching the steps policymakers should take to check the company's power and bring about a more competitive and equitable economy.

And heres the link to the report itself https://ilsr.org/wp-content/uploads/2016/11/ILSR_AmazonReport_final.pdf

Heres the table of contents for the report for convenience:

There is a ton to unpack in this report. One thing i want to point out that while sales tax is no longer an issue it is still covered in the report (remember that Amazon only just stopped the sales tax evasion in all states as of a couple months ago). There is this little choice piece tucked away on page 66:

But in 16 states, including ones with sizeable populations, like Missouri, Amazon continues to operate sales tax free. The research firm Civic Economics estimates that Amazon's uncollected state and local sales taxes totaled more than $704 million in 2015. (313) That year, Amazon reported profits of just $596 million.

Anyone want to explain how the reality we find ourselves in is nothing more than a broken window fallacy or are the doubters ready to admit there is a problem here?

edit:

Low prices
Convenience
Good customer service

That's what consumers want, and amazon provides it. There isn't a fix to human nature.

Theres a little bit more to it than good prices and good service. From the reports summary of Monopolizing the Economy:

• Amazon uses its vast financial resources to sell many products below its own cost as a tactic for both eliminating competitors that lack similarly deep pockets and hooking customers into its Prime ecosystem, which sharply reduces the chances they will shop around in the future. (Pages 15-16)

• By using Prime to corral an ever-larger share of online shoppers, Amazon has left rival retailers and manufacturers with little choice but to become third-party sellers on its platform. In effect, Amazon is supplanting an open market with a privately controlled one, giving it the power to dictate the terms by which its competitors can operate, and to levy a kind of tax on their revenue. (Pages 17-19)

• Amazon leverages the interplay between the direct retail and platform sides of its business to maximize its dominance over suppliers. As it extracts more fees from them, it's hollowing out their companies and reducing their ability to invent and develop new products. (Pages 18-23)

• Meanwhile, Amazon is rapidly expanding its own product lines, using the trove of data that it gathers from its platform to understand its suppliers' industries and compete directly against them. Many of these Amazon products appear at the top of its search listings. (Pages 24–25)

• Amazon is fueling a sharp decline in the number of independent retail businesses, a trend manufacturers say is harming their industries by making it harder for new products and new authors and creators to find an audience. (Pages 25-28)

• Amazon poses a particular danger in the book industry, where its power to manipulate what we encounter, remove books from its search results, and direct our attention to select titles threatens the open exchange of ideas and information. (Page 28)

• Already there's evidence that Amazon is using its huge trove of data about our buying habits to raise prices, and it's also started blocking access to certain products, charging higher prices, and delaying shipping times for customers who decline to join its Prime program. (Pages 29-30)

• To focus too much on prices, though, is to miss the real costs of monopoly. Amazon's tightening grip is damaging our ability to earn a living and curtailing our freedom as producers of value. New business formation has plummeted over the last decade, which economists say is stunting job creation, squeezing the middle class, and worsening income inequality. (Pages 30-31)

This is not healthy.

 

[mdubs]

The prices are just too good and the shipping is just too convenient. Ain't no reason to go to a regular store anymore

 

[Ether_Snake]

It would happen with or without Amazon. Technology is bringing costs down and reducing the number of needed workers. Has nothing to do with Amazon specifically.

 

[Maintenance]

Nice try, Donald.

 

[Shauni]

What's a broken window fallacy?

 

[More_Badass]

But describing Amazon’s reach in the retail sector describes only one of the company’s tentacles. Amazon is far more than a big, aggressive retailer. As we show in this report, Amazon increasingly controls the underlying infrastructure of the economy. Its Marketplace for third-party sellers has become the dominant platform for digital commerce. Its Amazon Web Services division provides the cloud computing backbone for much of the country, powering everyone from Netflix to the CIA. Its distribution network includes warehouses and delivery stations in nearly every major U.S. city, and it’s rapidly moving into shipping and package delivery for both itself and others.

I never realized Amazon had such a wide reach

 

[The Technomancer]

Amazon is accelerating a lot of shitty trends and no-one bothered to put a check on it. Shit's going to get bad

 

[PantherLotus]

we've seen this story before. 20 years ago it was Wal-Mart. 20 years from now it will be some free energy company.

 

[The Technomancer]

It would happen with or without Amazon. Technology is bringing costs down and reducing the number of needed workers. Has nothing to do with Amazon specifically.

Yes and no. I mean, its the core argument against capitalism, right? Centralized profits instead of diffuse economics.

 

[Kaako]

The prices are just too good and the shipping is just too convenient. Ain't no reason to go to a regular store anymore

I remember a time when people said this(minus shipping) about Walmart too.

 

[Foffy]

Amazon is the future.

Which is to say, the problems are the future.

 

[Boney]

Read this a few days ago, and it does indeed paint a very grim picture. The death of brick and mortar is going to be catastrophic both economically and socially. I remember a few people here basically laughing at the idea of malls still being around, and as much as I hate them, online shopping is an even worse phenomenon.

The fact that they still get to operate tax free in so many places is mind boggling. And I'm not even going to touch on Bezos having the WaPo on top of Amazon.

 

[Bakercat]

Well, when amazon is doing pretty much everything right whereas their competitors are lagging far behind in terms of accessibility of products and its sales then by all means let it happen.this is why so many companies are closing stores and going bankrupt, they either can not or will not keep up with things amazon are doing with its service. I mean, when you live in a capitalist society this can happen.

 

[Therin]

This is incredibly troubling & I am totally part of the problem. It just boils down to the fact that people are always gonna choose what's easiest/cheapest.

 

[benicillin]

Free two-day shipping is a hell of a thing.

To be fair though I'd probably shop at an actual store if it was conveniently located within walking distance, had all the things I needed and I didn't have to talk to a single person while shopping. But that's Amazons next project anyway.

 

[soco]

How different is this really from any of the other massive companies in our history that may not fully be a monopoly, but dominate large swathes of things?

In this case, I think Amazon has done a lot of this themselves rather than acquiring competitors and taking over previous areas (like media orgs, large banks, telcom companies, etc). I've never genuinely seen a case where this is ever in the interest of the consumer.

However, I will say this. I buy amazon's model of one single subscription and many services over almost everything else going. The idea that people can realistically afford 20 subscription-like services in their lives was always a pipe dream. You're not going to pay monthly fees for 10 pieces of software that auto update, every streaming service, all of your necessary bills to even access that, etc. When every subscription is 8-20$, it adds up insanely quickly and isn't worth it for many individual services. I expect many of these services will be run out of business by large companies like Amazon who can provide multiple services on the same subscription.

 

[Conciliator]

so uh

What should I do if I use Amazon a lot and have prime?

Can I save America by getting rid of my prime

 

[Ether_Snake]

Yes and no. I mean, its the core argument against capitalism, right? Centralized profits instead of diffuse economics.

Centralization is inevitable with or without capitalism. Centralization of profits is just a consequence of technological progress and efficiency improvements happening in a capitalist system. Same would happen under a communist government.

 

[The Technomancer]

My own personal pet peeve about all of this is what Amazon has trained people to expect from mail order service. I sell products online and we're absolutely forced to use the cheapest availible shipping options because we can't afford to take the loss from paying for more expensive shipping ourselves and if we raise our shipping costs from $5 to what things actually would cost, which would be like $15, people flip the fuck out and our sales fall through the floor. And then people are surprised when their packages take a while to arrive, or get lost, or don't have insurance. What do you think $5 shipping buys any company that isn't Amazon?

 

[Fox318]

Its impossible to compete with them.

In the next 10 years there's probably going to be a solid argument for breaking them up.

 

[HariKari]

Well, when amazon is doing pretty much everything right whereas their competitors are lagging far behind in terms of accessibility of products and its sales then by all means let it happen.this is why so many companies are closing stores and going bankrupt, they either can not or will not keep up with things amazon are doing with its service. I mean, when you live in a capitalist society this can happen.

Once one competitor reaches a certain size, they can wield advantages that others can't reasonably be expected to ever overcome. Amazon's supply chain is a massive weapon.

 

[The Technomancer]

How different is this really from any of the other massive companies in our history that may not fully be a monopoly, but dominate large swathes of things?

In this case, I think Amazon has done a lot of this themselves rather than acquiring competitors and taking over previous areas (like media orgs, large banks, telcom companies, etc). I've never genuinely seen a case where this is ever in the interest of the consumer.

The infrastructure implications are what make this more concerning I think. WalMart never set its eyes on providing extensive web services

 

[Gordon Shumway]

Amazon..is SKYNET!

 

[tearsintherain]

One fascinating thing is that companies like amazon, facebook, etc have been unable to get into China. They only let their own internal companies build up, pretty much every middle/upper class chinese person uses a phone and this app that lets you buy just about anything (with 1-2 hour home delivery in most cities), order food, get a taxi, online dating, the equivalent of facebook/snapchat/instagram/twitter, everything. Its pretty crazy, like a centralized database that knows EVERYTHING about you. Last I heard they actually have two - WeChat and Alibaba.

Thats probably much more likely our future, similar to a lot of the 90s cyberpunk novels and movies I could see a future in which corporations essentially take over the place of government and dictate everything about the way you life your life.

 

[Hollycat]

Amazon.... Is the Blok corporation? Noooooo

 

[The Technomancer]

One fascinating thing is that companies like amazon, facebook, etc have been unable to get into China. They only let their own internal companies build up, pretty much every middle/upper class chinese person uses a phone and this app that lets you buy just about anything (with 1-2 hour home delivery in most cities), order food, get a taxi, online dating, the equivalent of facebook/snapchat/instagram/twitter, everything. Its pretty crazy, like a centralized database that knows EVERYTHING about you.

Thats probably much more likely our future, similar to a lot of the 90s cyberpunk novels and movies I could see a future in which corporations essentially take over the place of government and dictate everything about the way you life your life.

Oh yeah also for as much as I'm worried about Amazon I'm much much more worried about TenCent. The amount of stuff they're piping through WeChat is ridiculous at best, frightening in a country with a government like China

 

[Divvy]

I never realized Amazon had such a wide reach

Check out this video on their plans for a retail licensing empire

https://www.youtube.com/watch?v=cA2-iMz479o

 

[Boney]

so uh

What should I do if I use Amazon a lot and have prime?

Can I save America by getting rid of my prime

There's really nothing you can do on an individual basis. Right now, Amazon is so powerful it can basically dictate policy just by tilting the scale on a certain direction. It's completely new ground, so policy makers won't dare try to regulate them, but it's keen politicians that should be able to project the damaging consequences of monopolistic practices that need to tame them.

My money is on the EU, but the odds aren't pretty for me.

 

[Aces&Eights]

Holy shit, HALF of all American households have a Prime account? $99.00 x 125 million = 1.2 billion. In Prime subs alone. Every year. Wow.

 

[Pandaman]

What's a broken window fallacy?

The idea that breaking something stimulates the economy because now it has to be replaced, 'creating' a job. Or: if we break every window we've now created a booming window repair industry.

 

[Laevateinn]

It's too bad we don't have a Democratic president who would do some trust busting.

 

[7Th]

Anything that accelerates the inevitable death of capitalism, America and the idea that human labor has any value is good in my eyes.

 

[wandering]

They're physically taking over Seattle, too.

 

[soco]

The infrastructure implications are what make this more concerning I think. WalMart never set its eyes on providing extensive web services

Eh, the infrastructure doesn't bother me as much. For the hosting, many could migrate without a lot of works, thanks to the virtualized containers. Larger orgs would require a bit more effort, depending on which of the AWS services they're using. If you start getting into redshift and tuning around that, it gets a little more challenging and possibly expensive, but I don't think it's that entrenched. Both MS and Google have passable variants as do other companies.

The shop thing is slightly more concerning, but only because of the centralized search for goods. There's a few large companies that can power individual shops.

 

[PSYGN]

Free two-day shipping is a hell of a thing.

To be fair though I'd probably shop at an actual store if it was conveniently located within walking distance, had all the things I needed and I didn't have to talk to a single person while shopping. But that's Amazons next project anyway.

Don't you still have to pay a membership fee? I guess it's good if you order a lot of stuff.

Anyway, I have bought from other retailers and I am surprised to see how fast they often deliver in the states (usually 3 days). Wal-Mart does 2 day delivery for free if you purchase $35 or more iirc. As someone who only used Amazon Prime for their 2-day shipping service and having the price jump for services I don't need, I think I am going to cancel my subscription next time.

 

[kirblar]

Oh no, someone is providing a service to people at a low cost! The horror!

 

[NobleXenon]

I remember a time when people said this(minus shipping) about Walmart too.

Pretty much. Walmart came in and destroyed main street. Amazon comes in and destroys wall street. Everyone loses.

Except for me, I'll make plenty of money off of their stock while rural america decays into shit.

 

[TheDrizzlerJ11]

Holy shit, HALF of all American households have a Prime account? $99.00 x 125 million = 1.2 billion. In Prime subs alone. Every year. Wow.

I mean it's two day shipping for free, I doubt much of their membership fees turn into profit. Always viewed it as a loss-leader so you end up ordering everything through them just for the shipping convenience.

 

[Foffy]

Oh no, someone is providing a service to people at a low cost! The horror!

That's not the deeper issue I think.

It's that most of Amazon's arenas that usurp the current model also do so by employing fractions of the population.

Let's assume Amazon Go becomes standard. That's the death of most retail jobs. Then comes warehousing, transportation, etc.

The issue isn't service, I'd say. It's the usurping of jobs, but the problem's always been jobs.

 

[Shauni]

The idea that breaking something stimulates the economy because now it has to be replaced, 'creating' a job. Or: if we break every window we've now created a booming window repair industry.

I don't even understand how that applies here

 

[Somnid]

Amazon was built on innovation. They could stagnate but for now they are the driving force of retail innovation. There is no point in businesses that do the same thing but worse.

 

[Phrozenflame500]

Oh no, someone is providing a service to people at a low cost! The horror!

While I'd normally agree, the fact that Amazon does dodge taxes that competitors have to pay represents market-distorting unfair competition.

 

[HariKari]

Oh no, someone is providing a service to people at a low cost! The horror!

Explains a lot of your political views.

Why not just skip to the end and have one Buy n Large corporation that runs everything? You're cool with that, right? I'm sure this corporation will have our best interests at heart the entire way!

Amazon was built on innovation. They could stagnate but for now they are the driving force of retail innovation. There is no point in businesses that do the same thing but worse.

Amazon is so large that they can starve out any competitor. Even if your supply chain was on point, it wouldn't reap the scale benefits Amazon gets.

 

[Mysterious]

brb getting shares

 

[kirblar]

That's not the deeper issue I think.

It's that most of Amazon's arenas that usurp the current model also do so by employing fractions of the population.

Let's assume Amazon Go becomes standard. That's the death of most retail jobs. Then comes warehousing, transportation, etc.

The issue isn't service, I'd say. It's the usurping of jobs, but the problem's always been jobs.

People freaked out about the Steam Engine putting people out of work too.

Explains a lot of your political views.

Why not just skip to the end and have one Buy n Large corporation that runs everything? You're cool with that, right? I'm sure this corporation will have our best interests at heart the entire way!

But that's not the end!

Walmart, Grocery Stores, Best Buy- they're not going to all up and disappear! Competition is good!

 

[SliceSabre]

This paints a very grim picture but I also remember 15+ years ago a ton of people ringing similar alarm bells about Walmart and how they were going to put every other super market out of business and such and destroy the very fiber of the communities they popped up in and now? Walmart doesn't really scare people anymore.

In xx amount of years some other online commerce store will likely raise up to challenge Amazon.

 

[The Technomancer]

People freaked out about the Steam Engine putting people out of work too.

Sure but the conditions in Amazon's warehouses are bad. Like, worse than working retail.

 

[Sami+]

I get 5% back on all Amazon purchases so you know my cheap ass is gonna go out of my way to get EVERYTHING there

 

[Kelsdesu]

Been trying to tell yall.

 

[Famassu]

It would happen with or without Amazon. Technology is bringing costs down and reducing the number of needed workers. Has nothing to do with Amazon specifically.

That's not the only problem. The problem is Amazon treats its STILL EXISTING workers like they are beneath maggots + they also treat producers of goods really badly, among other things. They have the strength to strongarm any opposition because they hold too much power.

This is why I've stopped buying shit from Amazon. It has just gotten too big & they do too much bad shit