House Antitrust Subcommittee Chairman David Cicilline (D–N.Y.) Cicilline (D-N.Y.) has sent a series tweets in which he accuses Amazon of preying on its customers by creating its own versions of the products they sell.
Think about if your store was run by someone who knew which products were the most popular. You don’t compete on merits. Instead, you copy these products to the very last detail.
Imagine that you move the original to the opposite aisle. You can’t lose.
— David Cicilline (@davidcicilline) October 19, 2021
Many major retailers actually sell generic or store-branded versions of their products. CVS stocks everything you need, including over-the counter painkillers and vitamins. Many supermarket chains offer their own brands of popular sodas. Soon after Cicilline’s tweets were published, Ben Evans was a tech writer. tweetedHere is a listing of the top retail chains in America, and how much of their revenues comes from private brands.
Americans spend nearly $160 billion each year on private-label goods. Amazon is a small player in the private-label space. The company gets less than 2 percent of its revenue from its private label products, compared to the double-digit percentages at other major retailers.
However, once search engines get involved people with agendas begin to suggest that technology is being used for manipulating our choices. Amazon isn’t just accused of copying the products of other companies, but also undercutting their price. This is something that most retailers do already. The company is also accused of hiding the products of other companies using its search engine. It then gives preference to its own items, denying consumers their choice.
Reuters has recently reported that Amazon had copied Indian products and rigged search results as it tried to expand its India market. Amazon has denied all accusations. This story suggests that Amazon “exploits” brands to learn how their products are made and create its own versions.
India’s corrupt government favors Amazon’s rivals and tilts the balances in its favour. This isn’t America. Half of Indian citizens said they were forced to bribe government officials during the last year. Reuters presents India’s domestic economic protectionism as follows: “Concerned about predatory pricing, India bans foreign ecommerce companies from selling most goods direct to consumers. This is similar to what happens in other countries.” You are only told later that Indian’s most wealthy and powerful citizens are the ones being affected, rather than the average Indian customer.
In any case, you should find it trivial to check if Amazon favors their own brands. Just search for product names on Amazon and see if Amazon is trying hide its competitors.
Amazon has its own brand of trash bags called Solimo. A simple Amazon search for “trash bags” returned a few results. Glad, the brand leader is at the top of this page. This is normal and is also common in stores. While Solimo is the top-ranked match, it has the tag of “Best Seller” but there are many other options such as Hefty or brands that I have never heard about.
Next, I searched for bathroom towels. These are also available under Amazon Basics. Although Amazon Basics is the top result, there are many brands represented in the search results. In fact, I am seeing many more brands and types of towels in my search results than what I would find at a typical retail store.
This is what we should talk about when discussing “monopolies” on big tech platforms. Antitrust should be about protecting consumers against predatory behavior, and not penalizing successful businesses who use the same competition strategies that brick-and mortar stores do for over a century.
Cicilline started a Twitter thread to support a horrible cronyist bill, the American Choice and Innovation Online Act. The legislation, despite its name, would actually do more to suppress choice and innovation rather than foster them. The legislation would prohibit online platforms that favor their own products more than those of others. The idea is to transform Amazon into an online commercial carrier, unable to compete with other businesses because of its superiority.
The bill, which would ban platforms from using their business information for products and services similar to those of other sellers, is remarkable. But it only applies to online platforms like Amazon, not to brick-and-mortar retailers, even though—just to reiterate—many major physical retail chains This behavior can also be adopted
The bill currently has only 20 cosponsors. We can only hope that this number does not increase. It’s not about maintaining competition; it’s about protecting the preferred business. FromThere is competition.