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Originally Posted by emellaich
1. As I said earlier, I don't see where Amazon's actions are censorship or restrictions on my freedom of speech. There are many other places, like here on mobileread where I can 'speak' and due to the openness if the Internet I can always start up my own outlet.
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Yes and no. If your preferred form of speech happens to be books, the ability to make that content discoverable in a place where people who read books are likely to find it is crucial to that speech actually being heard by anyone. So although Amazon cannot possibly destroy your right to free speech, if Amazon became malicious, they could easily undermine that right in a way that would cause you material harm. It's a subtle distinction, but an important one from an antitrust perspective.
Quote:
Originally Posted by emellaich
They are undoubtedly strong, but unlike a true monopoly there are few barriers (regulatory or scarce resources) to keep new competition away.
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It is really hard to imagine new competition being successful against Amazon at this point. They're truly so big that there are only about three or four companies in the world that could compete with them—basically Apple, Google, Microsoft, Exxon Mobil, and Berkshire Hathaway... and I'm not sure about the last three, and the first two don't seem interested.
Here are the main barriers to entry into competition against Amazon:
1. Near-complete availability. Amazon is pretty much the only site that can claim to be able to sell you very nearly any product ever manufactured. As a result, a sizable percentage of online buyers go straight to Amazon when searching for goods, which means that even if another store were better and cheaper, most people would never know.
2. Scale. Amazon's U.S. division sells more goods online (when measured by revenue) than all the other companies in the U.S. put together, and that number is growing pretty quickly.
Because of their high sales volume, they can demand deeper discounts on products than smaller businesses could, which means they can't realistically be undercut in price unless somebody is willing to operate at a staggering loss.
They also get special deals from the shipping companies that no new company starting out could possibly hope to get, which gives them another way to undercut any possible competition.
Finally, their scale means that they are able to do acceptably on what would otherwise be unsustainably low per-unit margins. Even if somebody else could manage to get all the same deals, without the volume, they'd never make enough money to break even like Amazon (almost) does.
3. Infrastructure. The amount of work required to create an Amazon replacement is staggering. Amazon isn't just a bookstore. It is also an online marketplace that anyone can use to list products and fulfill arbitrary products, an author/publisher interface for fixing metadata errors, a huge, highly automated system for order fulfillment (that brings costs down below what any newcomer to the industry could possibly hope to achieve), etc.
And that's just the physical product sales. Add to that the digital products and the hardware manufacturing needed to make those digital products useful, and it is pretty easy to see why competing with Amazon is a herculean task.
Maybe somebody will topple Amazon someday, but I wouldn't short your Amazon stock. Just saying.
Quote:
Originally Posted by emellaich
3. There is nothing wrong with being a monopoly. It's legal and there is nothing bad about it. What is wrong is when monopolies abuse their power and are unfair. Even if you think Amazon is a monopoly, has it been unfair
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I do not think it has been. As I said, my concern is not what Amazon does, but rather what Amazon's huge influence on the market has the potential to do in the wrong hands. The best way to explain is by suggesting a scenario:
Imagine that a bunch of powerful hedge fund managers get fed up with Amazon's frequent quarterly losses. So they get together and pool their votes to oust Amazon's board and replace them all with people who have very different values. Suppose that a week later, the new board ousts Amazon's CEO.
So now you have the same company with the same power, but it is led by a bunch of sociopaths. What impact would that have on the world of book publishing? I think the impact would be almost unimaginably huge.
One possible answer to that scenario is to say, "We'll deal with it when it happens." Another possible answer is to ensure that no company gets too big to fail. I personally prefer the latter approach.