[csomar]

> I feel like we need some form of regulation

That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops. Last thing we need is to start regulating on a per-business basis.

This is really a case of giving up your store brand/independence for convenience. Starting an online store is not hard these days, everybody should host their own if they are serious about their business.

[Fnoord]

> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

Easier said than done due to network effect. That's what they went for. Its also how Amazon and Facebook got so big. Heck, its even why Microsoft Windows got big. Become the cheapest, get volume, then abuse your market domination.

[mcv]

And we keep subjecting ourselves to that.

It seems to me that the most logical response is for merchants on Etsy to get together and launch their own platform, collectively owned by the merchants. It puts them in control and not at the mercy of some company wielding power over them, while they keep the advantage of having a single platform with a lot of merchants.

In fact, I've also been thinking taxi drivers should do something like that to fight back against Uber. Cut out these artificial middlemen and deal directly with your customer through collective tools that give you the same advantage as the big companies.

[Fnoord]

Cutting out middlemen is what the Internet has allowed in multiple ways. Its one of the reasons brick and mortar stores are in decline. Yet we also see an increase in middlemen, in the form of dropshipping.

We're also subjecting ourselves to scammers on market platforms and "crowdfunding". I fell for one on Kickstarter, which is also available on IndieGoGo. IndieGoGo acted (by disabling it), Kickstarter has not. In fact, Kickstarter remove any personal information shared by backers about the scammers. Who's side are they on, I wonder? Not the backer's side, it seems.

I assumed these middlemen platforms (Etsy, Kickstarter, etc) are there to please both parties equally. I suppose the keyword in both these stories is service. If they don't provide good enough service, people will eventually work against the network effect to create something better.

[lathiat]

And different to past history is that network effect is now largely worldwide and not just local to a city or even country.

[rhacker]

Probably could have been said better, and there's also probably no need for regulation but at least people should be fighting back.

But ultimately the suggestion to build your own is definitely the best move you can make. Etsy will always focus on their own SEO before anyone else's.

[csomar]

> there's also probably no need for regulation but at least people should be fighting back.

They can fight back by

> But ultimately the suggestion to build your own is definitely the best move you can make.

[brnt]

Always had the feeling this is a consequence of business and legislative culture. The US seems to favor large near a monopolists (Amazon, Walmart, two or three network operators, Facebook) and consequently people regard those places as semi-public fixtures of the environment which one cannot do without. Whereas in Europe still markets are much more plural and its easier and thus more common to move your business. When people say Europe does not produce behemoths, I see that as markets operating better than in the US and generally being a good thing.

[officialchicken]

> When people say Europe does not produce behemoths

Volkswagon, El Corte Englais, Credit Swiss, Ubisoft ... there's at least a few in each member EU state, just like the United States

[distances]

Large companies, but none of these are anywhere near forming a monopoly.

[QuesnayJr]

It's not crazy. Being "a market" for a certain good is a natural monopoly -- there are economies of scale so that one market will inevitably drive out the others. I don't know if Etsy has reached that point, but it could someday.

[barry-cotter]

There’s extremely limited evidence that natural monopolies even exist. The economic definition is when the efficient number of sellers in a market is one. That may be the case for airframes, see the endless subsidies for Boeing and Airbus to avoid that happening. But even a market like microchips where a fab costs tens of billions of dollars supports multiple sellers.

[QuesnayJr]

Etsy is an example of a two-sided market (https://en.wikipedia.org/wiki/Two-sided_market) which can be natural monopolies.

[ryan_j_naughton]

Most of the time when two sided markets gain market power through a dominant position, they still aren't a monopoly. They are an oligopoly employing game theoric positions that are worse than perfect competition but far from a natural monopoly.

For example, even with Amazon there is Target and Walmart selling online and doing much more similar delivery times these days.

The network effect of a two sided market definitely is a barrier to entry, but there is so much capital out there that other large firms or firms with access to insane amounts of capital will also build a 2 sided market and create a network effect. It's why there is Shopify, eBay, Etsy, etc. All more like an oligopoly than a monopoly.

In contrast, true natural monopolies need barriers to entry that are so high that it just doesn't make sense or isn't even possible for another company to do it even if they have insane capital. The electricity grid prior to "deregulation" and the forcing of a more competitive market was a prime example and the grid being governed/run by an independent service operator.

[barry-cotter]

Exactly! If the threat of competition holds prices below the profit maximizing levels for a monopolist you may have a local monopoly but it’s not a natural monopoly.

[QuesnayJr]

A pure monopoly is a textbook notion, like a frictionless plane. In practice, there's more or less market power, and thus more or less of a role for government intervention to correct it.

[pintxo]

Extremely limited evidence?

How about water or electricity grids? Railroads? (City) Streets?

[barry-cotter]

There are examples of enduring competition of all of those bar city streets within a single city, never mind nationally. Even streets aren’t a natural monopoly. If they were you wouldn’t have patchwork metro areas divided up between different municipalities. The benefits of consolidated ownership would be so great that the Bay area would have unified like New York’s boroughs did to form the city of New York. Private towns and streets work fine. For very large examples see Davis in California or Gurgaon in India. The below quoted text is about utilities like water or electricity grids. The US does not have one freight railroad operator even now. If rail was a natural monopoly that would be unavoidable. NYC’s subway system was built by five or six companies. Local monopolies occur in lots of places but they can’t charge profit maximizing prices because of the threat of entry from other firms. The powerlessness of that threat is a necessary part of the definition of natural monopoly. If it doesn’t hold; if the threat of potential entrance of competitors holds down prices you don’t have a natural monopoly.

> The Myth of Natural Monopoly

> In his 1986 book, Direct Utility Competition: The Natural Monopoly Myth, he concludes that in those cities where there is direct competition in the electric utility industries:

> Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities; The rival electric utilities compete vigorously through prices and services; Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies; Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating; Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry; The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.

https://mises.org/library/myth-natural-monopoly

[pas]

I'd add that the FDA observed that market forces bring prices down basically in a very straight-forward linear way: https://www.fda.gov/about-fda/center-drug-evaluation-and-res...

We also know that as Google Fiber entered any city the incumbent ISP immediately decreased its price.

Natural monopoly is a strange concept. Its formal definition by Baumol: "[a]n industry in which multi-firm production is more costly than production by a monopoly". ( https://en.wikipedia.org/wiki/Natural_monopoly#/media/File:N... )

It sounds like it's almost true in every case where you are forced to duplicate components/processes/efforts/structures, plus even with diminishing returns economies of scale helps the big companies.

Of course why the big incumbents get complacent/inefficient, why they turn to regulatory capture instead of R&D, is a different question.

[boh]

> We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops.

> If you don't like it, you move somewhere else

These two statements contradict each other. You're asking stakeholders to change their operating model in order to avoid Etsy having to do the same. This non-existing regulation potential impacting the practice of "starting a business" isn't a necessary argument. Stakeholders are resisting decisions that are negatively impacting their business--financial and tech firms do it all the time.

[geofft]

Here's an alternative to regulation: use some of the tax money gained from Etsy and other companies to subsidize the creation of a competitor. One of the known inefficiencies in the free market is how long it takes to set up a viable competitor and how expensive it is, so if the government puts its finger on the scale here, you get closer to the ideals behind the free market.

[glogla]

> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

Sufficiently big _a_ thing becomes _the_ thing because of economies of scale, network effects and "the software is eating the world" effects.

See Google, Paypal, Microsoft, Facebook, Twitter, and so on.

[WalterBright]

All those companies are well aware that the worse they treat their companies, the more likely competitors will appear.

It happens all the time. Big, unstoppable companies become sloppy and complacent, and suddenly find themselves in free fall.

[TheOtherHobbes]

If by "all the time" you mean "once every couple of decades, often after antitrust intervention", then possibly.

[WalterBright]

Sears, Kodak, GE, etc.

[massysett]

Heck, even eBay. In the small-business-to-consumer market, it’s a shadow now compared to Amazon. Ok, at least Amazon does fulfillment so it’s not exactly comparable to ebay. But Etsy? There’s no reason eBay couldn’t be dominating that category. Didn’t take a couple of decades or antitrust intervention to destroy ebay.

[jacknews]

These were because technology changed, not because of better competitors doing the same thinig

[WalterBright]

They did the same thing as far as the customer was concerned, only better, thereby offering a better deal to customers, who switched.

[rcxdude]

Then another huge company grows out of the competitors and begins doing the same thing. Just because the company on top switches out occasionally (and during the transition there is a viable option which isn't abusive), doesn't mean the system is working.

[WalterBright]

People switching to another company means it works.

[rcxdude]

Just because the abuser eventually gets replaced, doesn't mean the abuse stops (as mentioned, the replacement then settles into the same behaviour until another competitor comes along). If there's a non-abusive option 20% of the time, and 80% of the time there's only an abusive option, that doesn't strike me as 'working'. I would say the ratio would need to be 90% to 10% (i.e. any company starting to abuse its position loses it very very quickly, and the replacement does not engage in such behaviour for a while), in order for such a system to be anywhere near acceptable.

[fiblye]

I don't want to be condescending here, but I know it'll sound like it.

Etsy is small potatoes compared to those companies. It's the most easily avoidable of the bunch. If Etsy makes a truly stupid decision and sellers revolt, they'll be on life support before the year is over.

[MicahKV]

> If you don't like it, you move somewhere else.

Yes, and if you don't like existing regulations you can just move to another country with different laws. No big deal, right?

I do operate my own site in addition to selling on multiple marketplaces, but even with my efforts to diversify I am dependent, in part, on the sales I get from Etsy. I would be in a lot of financial pain if I lost that revenue stream, so "just move somewhere else" is not really an option.

Sometimes regulations are necessary to keep big companies (Amazon, Ebay, Etsy) from abusing their customers (including small time sellers like myself). Regulations may not be the answer in this case, but it's at least worth discussing.

[SllX]

Whenever you think about creating a new “regulation”, by which I assume you mean a new law, try to think of what the phrasing for that law would be and then think about the enforcement mechanism, the implications of the law as written, and the possible, even probable complications from the enforcement mechanism.

If you come up with something that isn’t going to unfairly penalize startups and small businesses, you might even have something there, but if you find the exercise difficult, there’s a decent chance all of Congress or your State’s legislature or your country’s Parliament and all of their aides are also going to have trouble coming up with a well written law, let alone one that will survive the political process, and the most likely result is something that entrenches existing businesses, ultimately reducing your possible future choices. Actually the most likely result is a law not even passing, and if it does, getting distorted along the way into something that will likely reduce your possible future choices.

It’s not that lawmakers should never pass laws, a new law should be judicious and necessary, something that can’t be handled by the Courts from the existing body of law, and something that ought to be handled by law rather than some other civic institution. There’s a lot of ideas for laws out there that doesn’t meet any of this criteria, but we still hold onto this idea that “regulations” are magic and will almost always have their intended effects rather than almost never.

[otterley]

All of this may be true, and yet, it’s not a very strong argument against regulation. I’m glad that we have safety regulations, despite objections such as yours, because they have demonstrably saved lives.

[SllX]

Lawmaking is an important part of a nation of laws, but that does not mean the body of law should have needless additions. This is why the process of selecting lawmakers is generally tied to a political process so that new laws are brokered and argued both for and against and modified.

The first test however for any new bill that would be law is, do we need this law? I think in cases where disputes are contractual or market-oriented, it is okay to rely on the resources of the State (the Courts specifically), especially if no other form of arbitration will resolve the dispute, but passing a new law should be a last resort and only after a case for it has been properly made, and a coalition around the new law formed.

[hellisothers]

I read their argument as against over-regulation, regulatory capture, and regulation moats like the ones Facebook is advocating for. An easier thing to imagine is if you got the regulations you wanted in place but at the end of the day they’re just preventing a thing you don’t like because it’s “new to you” and your business. Now if a startup wanted to come along and use what Etsy is doing _up front_ as part of its business mode it can’t, even if people don’t mind because they knew what they were getting.