#stacy mitchell

[mostlysignssomeportents]

Amazon’s financial shell game let it create an “impossible” monopoly

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me in TUCSON (Mar 9-10), then San Francisco (Mar 13), Anaheim, and more!

For the pro-monopoly crowd that absolutely dominated antitrust law from the Carter administration until 2020, Amazon presents a genuinely puzzling paradox: the company's monopoly power was never supposed to emerge, and if it did, it should have crumbled immediately.

Pro-monopoly economists embody Ely Devons's famous aphorism that "If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’":

https://pluralistic.net/2022/10/27/economism/#what-would-i-do-if-i-were-a-horse

Rather than using the way the world actually works as their starting point for how to think about it, they build elaborate models out of abstract principles like "rational actors." The resulting mathematical models are so abstractly elegant that it's easy to forget that they're just imaginative exercises, disconnected from reality:

https://pluralistic.net/2023/04/03/all-models-are-wrong/#some-are-useful

These models predicted that it would be impossible for Amazon to attain monopoly power. Even if they became a monopoly – in the sense of dominating sales of various kinds of goods – the company still wouldn't get monopoly power.

For example, if Amazon tried to take over a category by selling goods below cost ("predatory pricing"), then rivals could just wait until the company got tired of losing money and put prices back up, and then those rivals could go back to competing. And if Amazon tried to keep the loss-leader going indefinitely by "cross-subsidizing" the losses with high-margin profits from some other part of its business, rivals could sell those high margin goods at a lower margin, which would lure away Amazon customers and cut the supply lines for the price war it was fighting with its discounted products.

That's what the model predicted, but it's not what happened in the real world. In the real world, Amazon was able use its access to the capital markets to embark on scorched-earth predatory pricing campaigns. When diapers.com refused to sell out to Amazon, the company casually committed $100m to selling diapers below cost. Diapers.com went bust, Amazon bought it for pennies on the dollar and shut it down:

https://www.theverge.com/2019/5/13/18563379/amazon-predatory-pricing-antitrust-law

Investors got the message: don't compete with Amazon. They can remain predatory longer than you can remain solvent.

Now, not everyone shared the antitrust establishment's confidence that Amazon couldn't create a durable monopoly with market power. In 2017, Lina Khan – then a third year law student – published "Amazon's Antitrust Paradox," a landmark paper arguing that Amazon had all the tools it needed to amass monopoly power:

https://www.yalelawjournal.org/note/amazons-antitrust-paradox

Today, Khan is chair of the FTC, and has brought a case against Amazon that builds on some of the theories from that paper. One outcome of that suit is an unprecedented look at Amazon's internal operations. But, as the Institute for Local Self-Reliance's Stacy Mitchell describes in a piece for The Atlantic, key pieces of information have been totally redacted in the court exhibits:

https://www.theatlantic.com/ideas/archive/2024/02/amazon-profits-antitrust-ftc/677580/

The most important missing datum: how much money Amazon makes from each of its lines of business. Amazon's own story is that it basically breaks even on its retail operation, and keeps the whole business afloat with profits from its AWS cloud computing division. This is an important narrative, because if it's true, then Amazon can't be forcing up retail prices, which is the crux of the FTC's case against the company.

Here's what we know for sure about Amazon's retail business. First: merchants can't live without Amazon. The majority of US households have Prime, and 90% of Prime households start their ecommerce searches on Amazon; if they find what they're looking for, they buy it and stop. Thus, merchants who don't sell on Amazon just don't sell. This is called "monopsony power" and it's a lot easier to maintain than monopoly power. For most manufacturers, a 10% overnight drop in sales is a catastrophe, so a retailer that commands even a 10% market-share can extract huge concessions from its suppliers. Amazon's share of most categories of goods is a lot higher than 10%!

What kind of monopsony power does Amazon wield? Well, for one thing, it is able to levy a huge tax on its sellers. Add up all the junk-fees Amazon charges its platform sellers and it comes out to 45-51%:

https://pluralistic.net/2023/04/25/greedflation/#commissar-bezos

Competitive businesses just don't have 45% margins! No one can afford to kick that much back to Amazon. What is a merchant to do? Sell on Amazon and you lose money on every sale. Don't sell on Amazon and you don't get any business.

The only answer: raise prices on Amazon. After all, Prime customers – the majority of Amazon's retail business – don't shop for competitive prices. If Amazon wants a 45% vig, you can raise your Amazon prices by a third and just about break even.

But Amazon is wise to that: they have a "most favored nation" rule that punishes suppliers who sell goods more cheaply in rival stores, or even on their own site. The punishments vary, from banishing your products to page ten million of search-results to simply kicking you off the platform. With publishers, Amazon reserves the right to lower the prices they set when listing their books, to match the lowest price on the web, and paying publishers less for each sale.

That means that suppliers who sell on Amazon (which is anyone who wants to stay in business) have to dramatically hike their prices on Amazon, and when they do, they also have to hike their prices everywhere else (no wonder Prime customers don't bother to search elsewhere for a better deal!).

Now, Amazon says this is all wrong. That 45-51% vig they claim from business customers is barely enough to break even. The company's profits – they insist – come from selling AWS cloud service. The retail operation is just a public service they provide to us with cross-subsidy from those fat AWS margins.

This is a hell of a claim. Last year, Amazon raked in $130 billion in seller fees. In other words: they booked more revenue from junk fees than Bank of America made through its whole operation. Amazon's junk fees add up to more than all of Meta's revenues:

https://s2.q4cdn.com/299287126/files/doc_financials/2023/q4/AMZN-Q4-2023-Earnings-Release.pdf

Amazon claims that none of this is profit – it's just covering their operating expenses. According to Amazon, its non-AWS units combined have a one percent profit margin.

Now, this is an eye-popping claim indeed. Amazon is a public company, which means that it has to make thorough quarterly and annual financial disclosures breaking down its profit and loss. You'd think that somewhere in those disclosures, we'd find some details.

You'd think so, but you'd be wrong. Amazon's disclosures do not break out profits and losses by segment. SEC rules actually require the company to make these per-segment disclosures:

https://scholarship.law.stjohns.edu/cgi/viewcontent.cgi?article=3524&context=lawreview#:~:text=If%20a%20company%20has%20more,income%20taxes%20and%20extraordinary%20items.

That rule was enacted in 1966, out of concern that companies could use cross-subsidies to fund predatory pricing and other anticompetitive practices. But over the years, the SEC just…stopped enforcing the rule. Companies have "near total managerial discretion" to lump business units together and group their profits and losses in bloated, undifferentiated balance-sheet items:

https://www.ucl.ac.uk/bartlett/public-purpose/publications/2021/dec/crouching-tiger-hidden-dragons

As Mitchell points you, it's not just Amazon that flouts this rule. We don't know how much money Google makes on Youtube, or how much Apple makes from the App Store (Apple told a federal judge that this number doesn't exist). Warren Buffett – with significant interest in hundreds of companies across dozens of markets – only breaks out seven segments of profit-and-loss for Berkshire Hathaway.

Recall that there is one category of data from the FTC's antitrust case against Amazon that has been completely redacted. One guess which category that is! Yup, the profit-and-loss for its retail operation and other lines of business.

These redactions are the judge's fault, but the real fault lies with the SEC. Amazon is a public company. In exchange for access to the capital markets, it owes the public certain disclosures, which are set out in the SEC's rulebook. The SEC lets Amazon – and other gigantic companies – get away with a degree of secrecy that should disqualify it from offering stock to the public. As Mitchell says, SEC chairman Gary Gensler should adopt "new rules that more concretely define what qualifies as a segment and remove the discretion given to executives."

Amazon is the poster-child for monopoly run amok. As Yanis Varoufakis writes in Technofeudalism, Amazon has actually become a post-capitalist enterprise. Amazon doesn't make profits (money derived from selling goods); it makes rents (money charged to people who are seeking to make a profit):

https://pluralistic.net/2023/09/28/cloudalists/#cloud-capital

Profits are the defining characteristic of a capitalist economy; rents are the defining characteristic of feudalism. Amazon looks like a bazaar where thousands of merchants offer goods for sale to the public, but look harder and you discover that all those stallholders are totally controlled by Amazon. Amazon decides what goods they can sell, how much they cost, and whether a customer ever sees them. And then Amazon takes $0.45-51 out of every dollar. Amazon's "marketplace" isn't like a flea market, it's more like the interconnected shops on Disneyland's Main Street, USA: the sign over the door might say "20th Century Music Company" or "Emporium," but they're all just one store, run by one company.

And because Amazon has so much control over its sellers, it is able to exercise power over its buyers. Amazon's search results push down the best deals on the platform and promote results from more expensive, lower-quality items whose sellers have paid a fortune for an "ad" (not really an ad, but rather the top spot in search listings):

https://pluralistic.net/2023/11/29/aethelred-the-unready/#not-one-penny-for-tribute

This is "Amazon's pricing paradox." Amazon can claim that it offers low-priced, high-quality goods on the platform, but it makes $38b/year pushing those good deals way, way down in its search results. The top result for your Amazon search averages 29% more expensive than the best deal Amazon offers. Buy something from those first four spots and you'll pay a 25% premium. On average, you need to pick the seventeenth item on the search results page to get the best deal:

https://scholarship.law.bu.edu/faculty_scholarship/3645/

For 40 years, pro-monopoly economists claimed that it would be impossible for Amazon to attain monopoly power over buyers and sellers. Today, Amazon exercises that power so thoroughly that its junk-fee revenues alone exceed the total revenues of Bank of America. Amazon's story – that these fees barely stretch to covering its costs – assumes a nearly inconceivable level of credulity in its audience. Regrettably – for the human race – there is a cohort of senior, highly respected economists who possess this degree of credulity and more.

Of course, there's an easy way to settle the argument: Amazon could just comply with SEC regs and break out its P&L for its e-commerce operation. I assure you, they're not hiding this data because they think you'll be pleasantly surprised when they do and they don't want to spoil the moment.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/03/01/managerial-discretion/#junk-fees

Image: Doc Searls (modified) https://www.flickr.com/photos/docsearls/4863121221/

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/

[sexybread-png]

whatever whatever whatever im not obsessed with them

also giving beca more tattoos and piercings bc they stripped her off her alt and i think it should come back idc

she can b a dorky nerd, someone w tattoos and a grungy wardrobe, and an adult w a successful career all at once

[mcrololo]

pitch perfect + text posts part 3

[becabeale143]

Incorrect BeChloe quotes

Beca - Chlo…babe…you’re staring at my boobs

Chloe - (shakes her finger) In my defense, they were staring at me…

Stacie - I get that

[pitch-perfect-spookfest]

The Pitch Perfect SpookFest will take place from October 25 - 31.

This year’s prompts will be tied to the word FRIGHTS. Each day people will write a story based on the letter assigned for the day.

October 25 - F

October 26 - R

October 27 - I

October 28 - G

October 29 - H

October 30 - T

October 31 - S

For example, Friday, October 25th is ‘F’ so stories might be based on ‘Frankenstein’ or ‘Forgotten’ or ‘Fright Night’.

Writers are given great latitude to be creative with this.

Good Luck and Happy SpookFest.

[kailoraurelius]

A tiny sneak peek for my Spookfest submission: Unendingly Yours.

[mayonesavegana]

Today I discovered through my favorite characters that my type is smart people, nerds, sunshine idiots, women who could destroy me and boys who could be Spider-Man.

[bechloeislegit]

IT’S TIME! Spookfest 2024 officially starts today. Enjoy!!

Chapters: 1/1 Fandom: Pitch Perfect (Movies) Rating: Teen And Up Audiences Warnings: Creator Chose Not To Use Archive Warnings Relationships: Chloe Beale & Beca Mitchell Characters: Beca Mitchell, Chloe Beale, Aubrey Posen, Stacie Conrad, Cynthia-Rose Adams, Ashley Jones, Jessica Smith, Fat Amy (Pitch Perfect), Lilly Onakuramara, Denise (Pitch Perfect) Additional Tags: ghost whisperer - Freeform, Supernatural Elements Series: Part 1 of PITCH PERFECT SPOOKFEST 2024 Summary:

Here are my submissions for Pitch Perfect Spookfest 2024. This year, writers had to be creative and use the word FRIGHTS to come up with a title that uses each letter in order.

I hope you enjoy them.

[sophs-style]

Nicolas Ghesquière presented the Louis Vuitton Spring/Summer 2024 collection during Paris Fashion Week on Monday (2nd October 2023). The front row was packed with many celebs, as you would expect.

Zendaya, Jennifer Connelly, Cate Blanchett, Alicia Vikander, Ana de Armas, Gemma Chan, Cynthia Erivo, Renate Reinsve, Thuso Mbedu, Saoirse Ronan, India Amarteifio, Regina King, Phoebe Dynevor, Alana, Danielle and Este Haim, Chloë Grace Moretz, Hannah Einbinder, Kerry Condon, Léa Seydoux, Lous and the Yakuza, Shay Mitchell, Stacy Martin, Ariana Greenblatt, Eileen Gu and Maia Mitchell (all wearing Louis Vuitton).

[invisible-pink-toast]

pride flags with lgbtq+ animated characters!! 🌈

[cycwrites]

Never Have I Ever - A Fic Tease

A/N - Honestly, I don't know what this is and I'm not sure if it'll go into a story at all or remain a Fic Tease for life.

This iteration of it is currently set 6 months before Nowish. Could change. Still not sure if i like it.

Oh, it's also fully unbeta'd, so none of this is @tiny-maus-boots fault.

--------------

~A~

Saturday, September 24, 2016

“Never have I ever… had sex in the auditorium.”

Turning from Stacie’s wickedly pleased grin, Aubrey watched, absolutely fascinated, as Beca’s expression went perfectly still, her smile dropping away and taking all the color in her face with it.  Then Chloe gave a hum of pure satisfaction, taking a drink of her wine as Beca’s cheeks flared in a very impressive blush.

The four of them were celebrating Beca’s 23rd birthday – albeit a few days late. Aubrey had made Beca’s favorite dinner, Chloe had taken care of dessert and now they were lounging on the sectional couch in the Posen-Conrad living room.

Beca steadfastly refused to look at anyone as she drained the glass Stacie had just filled. Clearly pleased with herself, Stacie picked up the bottle and filled it again before settling back on the couch next to Aubrey.

“You did what in the auditorium?” Aubrey didn’t know if she was scandalized or amused. “That’s – you…” A mix of both, she decided, unable to stop smiling at Beca’s obvious discomfort. But really, the auditorium?

“Don’t give me the ‘It’s a sacred Bella space’ speech, Bree.” Beca rolled her eyes and looked up, ignoring the blush still high on her cheeks. “It’s just a room on a college campus with a bunch of horny young adults.”

Aubrey blinked – that had been exactly what she’d been about to say out of pure reflex, but it surprised her that Beca knew her well enough to anticipate it.

“Don’t be embarrassed, Becs.” Chloe bumped their shoulders together. “I’m sure countless generations have snuck in there for the same purpose.”

“Ew.” Beca’s face twisted. “Why would you say that?”

“You’re the one who said it, Beca.” Stacie topped off the rest of their glasses and shook the bottle. “Going to need another, I’ll be back.”

“Doesn’t mean I thought it through.” Beca shuddered as Stacie went into the kitchen. “Now I need a shower.”

“Need a hand?” Chloe blinked wide innocent blue eyes when Beca just arched a brow at her.

“Wait.” Aubrey looked over at her wife when she came back in the room. “How do you know about it and I don’t?”

“Chloe’s got great volume.” Stacie set the bottle on the table to let it breathe a little. Beca groaned and grabbed one of the throw pillows and tried to smother herself. To Aubrey’s shock, even Chloe started to blush through her grin. “I happened to be outside.”

“Pure chance. Mmhmm, right.” Aubrey looked at the three of them. “There’s more to this story, isn’t there?”

“No!” Beca’s yell was muffled from behind the pillow. “I am not drunk enough for this conversation.” She let the pillow fall to her lap. “I will never be drunk enough for this conversation.”

It was a testimony to how much she trusted the other three that not once did Aubrey become worried that she wasn’t in on the joke. While Past Aubrey and her insecurities weren’t entirely gone, she trusted the women in this room with her life and knew they would never keep anything from her with any malicious intent.

Besides, she knew eventually one of them would spill the details, they always did.

-------------

This definitely came about purely from "You did what in the auditorium?!" popping into my head yesterday before bed. Not quite the direction I saw it going once I had it down, but thought I'd throw it out anyway.

[chloebeale]

CHLOE AND AUBREY NEED WEDDING DATES (7/?)

RATING: T. PAIRINGS: Bechloe, Staubrey. WORDS: 3.5K. SUMMARY: The group realize they haven't yet discussed their sleeping arrangements... the reality of which isn't quite as terrifying as a Posen-filled meet and greet. NOTES: Two years later and here we are! If you've been waiting for this update, I truly apologise for the delay. I hope you enjoy, though!

***

Soon, the four were making their way to their cabins, where their luggage already awaited their arrival. The two rooms, positioned across the narrow corridor from one another, seemed to be much bigger than anything Stacie had expected if the space between each door was anything to go by. “So, which one’s ours?” Stacie asked, eyeing the suitcases. They stood in two neat stacks; Stacie’s and Beca’s outside of one door, Aubrey and Chloe’s outside of the other. It made the answer to her question pretty obvious. “Ours?” Aubrey quirked a brow. Stacie looked from the suitcases to Aubrey, as if the former weren’t even there. “Mine and yours.” “Oh, no.” Aubrey shook her head. “That won’t be—” “What?” Stacie questioned. She gestured with her head to Aubrey. “We are girlfriends, aren’t we?” “She does have a point,” Chloe offered before Aubrey got the chance to protest further. “It’ll look weird if people see us going into separate rooms.” Aubrey pursed her lips. “Weird or not, Chloe, these are—” She paused, eyes shifting away from Chloe and towards Stacie and Beca, before she lowered her voice, addressing only Chloe despite the three of them standing right there within the same vicinity. “Not twin rooms.”

READ ON AO3!

[mcrololo]

Pitch Perfect + text posts part 4

Bonus:

[becabeale143]

Incorrect Quad quotes

(BeChloe and Staubrey watching Family Feud)

Steve Harvey - name a part of her body a woman uses to control her partner…

Stacie - (motions to her huha) He’s a a hunter…

Chloe -

Beca -

Staubrey - that’s two answers, bitch!

Beca - what can I say…momma uses all her assets!

[pitch-perfect-spookfest]

The 2024 Pitch Perfect SpookFest is coming.

[pinkpastels113]

beca: stacie what are you talking about i’m not like joey from friends

chloe, passing by her room: hi bec

beca: i love you

stacie: