Thread by @doctorow

Amazon told Congress that it doesn't spy on its sellers to figure out which products it should clone. Instead, the company has argued that its longstanding practice of knocking off the most successful products on its platform represents a string of incredible coincidences.

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But internal Amazon whistleblowers told the Wall Street Journal that they totally do this, all the time. I mean, OBVIOUSLY.

Amazon told the WSJ that anyone who engages in such conduct is a rogue employee and has launched an "internal investigation."

wsj.com/articles/amazo…

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The whistleblowers told the Journal that Amazon's own-label planning meetings often featured data ganked from the platform's third-party sellers, which suggests that the practice - rogue or not - was hardly a secret.

gizmodo.com/report-amazon-…

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The temptation is obviously irresistible. OBVIOUSLY.

The right likes to talk about "moral hazard," by which they mean, "If we give poor people the means to avoid starvation, they won't get jobs."

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But the real moral hazard is trusting companies not to be unethical because...that would be wrong.

As usual, actions speak louder than words. Walmart founder Sam Walton favored unlimited campaign spending and argued that this wouldn't lead to political corruption.

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Walmart founder Sam Walton ALSO forbade his buyers from taking so much "as a handkerchief" from a salesman because he feared that even the most trivial temptation would lead his employees astray.

fs.blog/great-talks/ps…

Moral hazard exists. It's why companies cheat.

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Lawmakers (used to) know this. Until the reforms to antitrust law in the Reagan era (carried on by every president, R or D, since), large firms were subject to "structural separation."

Banks weren't allowed to own businesses that competed with the firms they lent to.

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Railroads weren't allowed to own freight companies that competed with the firms whose freight they carried.

But platforms, from app stores to Amazon, are allowed to produce products that directly compete with the products they sell.

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The law should prohibit this.

I mean, OBVIOUSLY.

papers.ssrn.com/sol3/papers.cf…

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To understand how Amazon cheats, you don't have to refer to whistleblower reports about knock-off trunk organizers. Just look at publishing.

Amazon is a publisher. They're also the dominant retail channel for the entire publishing industry.

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If you're a publisher, Amazon knows how your books sell - not just how many, but HOW. They know which search terms brought the customer to your book. They know where your customer lives. They know everything else your customer bought.

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They know who your customer lives with. For ebooks, they know where your customer reads, when they stop, and when they start again. They know who your customers loan their books to. They know which books by rival publishers your customer also bought.

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And also they know how your books are selling. To the second. Publishers get that data quarterly, or every six months. Amazon knows how many copies translate to which salesrank. Publishers never ever get that data.

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And:

Amazon.

Is.

A.

Publisher.

They are in direct competition with the firms whose products have generated that data, and they do not share that data with those firms.

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So yeah, you don't need knock-off trunk organizers to understand why this is cheating.

eof/