[likpok]

The trouble with this argument (which gets made a lot) is that this is basically every large retailer. Walmart has great value, Safeway has safeway select, Target has good and gather. In all of these cases large retailers take well-performing products (i.e. look at their sales data to see what is selling well) and creates mimics.

They put the generics right next to the original products, and then charge the original seller for better shelf placement (as well as for various other things -- getting a product in a retail store requires a fair amount of payola in some form or another).

All of this adds up to basically the same thing: amazon copies a product and ranks it highly unless you pay for better placement.

You can say that this is bad, which sure, but it seems hard to make the argument that this is specifically illegal for amazon when it's widely practiced in the industry.

[losteric]

> The trouble with this argument (which gets made a lot) is that this is basically every large retailer.

Alternatively: there's no trouble at all, Walmart/Safeway/etc are all clearly engaging in this anti-competitive practice and must be reigned in. Marketplaces need to be regulated as neutral grounds for sellers, the marketplace cannot double-dip and compete against sellers or engage in practices that reduce competition between marketplace businesses.

Generics and knock-offs are fine, it just needs to be done by independent sellers.

Practices like down-ranking sellers for offering better prices elsewhere is just blatantly violating any sense of neutrality, reducing competition among marketplaces and increasing prices for customers.

[sailfast]

Aren't most of these generics all white-label anyway? I'm less worried about store-brand generics that are often outsourced, and more worried about behavior that drives any of the original manufacturers out of the business entirely because of monopoly over the entire sales chain.

[kiklion]

How is it clearly anti-competitive if they are providing a better value for the consumer?

When a name brand has market power and charges a premium for a basic product, then another company entering the market and undercutting them is great for the consumer. We can make regulations to ensure that a distributor, advertiser, retailer and the product owner engage in arms length transactions but there’s nothing inherently wrong with a store brand offering products comparable to name brand at significantly reduced prices.

[losteric]

When considering "better value for the customer", remember that sellers are a customer of the marketplace too (arguably the primary customer!).

imo the problem is specifically generics branded and marketed by the marketplace. That's where a conflict of interest between the marketplace and sellers arises, which ultimately harms end-customers.

Amazon Private Brands (APB) typically buys from the same companies that make the random generics like "XOFUNBO" no-name brands. The issue is Amazon can use it's insider data to buy, brand, and market generics in-house, without paying the fees charged to sellers - achieving costs that 3p sellers fundamentally cannot compete with. Amazon's own corporate training highlights that sharing sales data with 3p sellers is illegal and anti-competitive, I don't know why APB should be seen as any different.

This is not even considering how sellers need to earn end-customer trust while Amazon can muscle coasting on their trust as the marketplace.

Marketplaces must be neutral ground for sellers, full stop. No seller can be given privileged access. Otherwise the market distorts to favor a seller and that ultimately harms the end-customers in the long-term by suppressing competition.

[m-ee]

From what I understand the FTC is shifting away from the doctrine that consumer benefit/harm as the deciding factor for an antitrust case.

[symlinkk]

Okay so take the FTC out of it. Let’s say we’re writing the laws from scratch today. Why would store brand generics be outlawed?

[TheCoelacanth]

They wouldn't, except for market dominating retailers.

[kortilla]

So target and Walmart would still be allowed to do it because they aren’t market dominating? What’s the point?

[mentalpiracy]

I have come to this same conclusion as well.

Too many economic opinions are still predicated on the idea that the free market is still working correctly, and that there are effective controls in place. The reality is that - at least in the US - the controls are broken, and have been for a decade or more.

[EVa5I7bHFq9mnYK]

I think those great value products are not in fact produced by Walmart. It's the same product from the same company, just lower priced to appeal to price conscious customers.

[gehwartzen]

Thats exactly what those are. I worked for Reynolds Consumer a while back and the same aluminum foil goes into the brand box as well as the private label box.

[bluGill]

The foil might be the same, but that doesn't mean everything is. I've had generic raisin bran cereal that was clearly Kellogg's in a different box, excpet that 1 out of 100 boxes had a slightly different flavor that wouldn't have passed Kellogg's quality controls but since still food safe (so I assume) the generic boxes got it. Of course when doing a private labor you can specify the higher quality controls, but that comes at a higher price. Most of the time Kellogg's is going to make the same cereal either way so nobody can tell the difference, but when something goes off in the process the cheaper generics get it.

My knowledge of foil suggests there isn't anything Reynolds could to that would reduce quality that would still be good enough to ship.

[hotnfresh]

I dunno how it is these days, but the store brand cocoa pebbles used to not taste like chocolate at all, and would fail to turn the milk into chocolate milk like the real ones did. Other cereals had similar problems. A common issue was that the store brand was consistently, noticeably stale, while the name brand almost never was.

[nonameiguess]

Clearly, it isn't illegal to do this kind of thing in general. What's illegal is doing it when you have enough market power to be deemed a monopoly. No physical retailer is anywhere near that. Businesses are allowed to be anticompetitive. That's more or less the entire reason they exist. They're not allowed to create monopolies by being anticompetitive.

[enriquec]

Very true. I find it hard to argue against something like generics - since they increase access and lower price.

[kiklion]

There’s nothing wrong with genetics and nothing wrong with stores having their own brand.

We just need regulations to ensure that vertical companies are engaging in arms length transactions. If Walmart charges a company $10 per linear foot of shelf space on the third row, then they need to internally bill the generic brand division the same rate.

[ctvo]

So the goal is … create paperwork? Walmart internally bills itself the same price … and they pay themselves the money does what exactly?

[fragmede]

I don't know that it is. Walmarts been repeatedly sued for the same practice, so it's not just Amazon being sued for that behavior.