Free Delivery on Trial: Lina Khan and the FTC Go After Amazon | Libertarian: Richard Epstein | Hoover Institution
Oct 6, 2023
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Richard Epstein discusses an antitrust suit against Amazon by the FTC and several states. They explore the complexity of breaking up Amazon, Amazon's pricing strategies, the role of Amazon Prime, and future scenarios. They also discuss the consequences of imposing fines on businesses.
Amazon's lack of predatory pricing strategies and success in building infrastructure counterarguments against breaking up the company.
The practice of prioritizing Amazon's own products on its platform is not necessarily anti-competitive and driven by market forces and consumer preferences.
Deep dives
The Complexity of Breaking Up Amazon
There is a debate over breaking up Amazon, with arguments for both maintaining its dominance and pursuing antitrust action. One argument against breakup is the lack of evidence for predatory pricing strategies that eliminate competition. While predation could work with a single firm, it is unlikely in Amazon's case. Furthermore, the company has been successful in building infrastructure and maintaining low prices. Another argument is that prioritizing Amazon's own products on its platform is not necessarily anti-competitive as it can result in efficiency and cost benefits. The current antitrust case against Amazon lacks strong evidence of anti-competitive practices.
Challenging the 'Common Carrier' Argument
The concern of Amazon becoming a dominant marketplace where all online purchases are made is not persuasive. The real issue is whether there are any unfair advantages that only a monopolist could exploit. The practice of giving priority to Amazon's own products or brands does not necessarily result in anti-competitive behavior. It is driven by market forces and consumer preferences, and other fulfillment services and carriers remain viable alternatives. The focus should be on consumer welfare and the efficiency and satisfaction benefits that Amazon provides.
The Weakness of the Antitrust Case
The current antitrust case against Amazon is weak and unlikely to succeed. The allegations of predatory pricing and preventing competitors from selling on the platform lack substantial evidence. The argument that Amazon has a monopoly also falls short, considering the existence of rival companies and the ongoing competition. The penalties or fines that might be imposed in this case would go to the general treasury and could be used for any purpose. Overall, the case appears to be driven by ideological motivations rather than strong antitrust concerns.
Richard Epstein picks apart a new antitrust suit against Amazon brought by the FTC and several states for a lack of demonstrable harm to consumers or prices.
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