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You're probably right, although if they are selling products below cost to try and wipe out competitors I believe there have been enforcement actions on that in the past, although the feds never did pursue it with Walmart which wiped out hundreds of small town merchants with that technique.
Amazon.com, Inc. (AMZN) | Stock Discussion ForumsShare
An Amazon Prime package. Thomas Trutschel/Photothek via Getty Images _____
Over the past few days, news reports have made it clear that Amazon and its fellow tech giants will soon find themselves the focus of increased antitrust scrutiny from the Federal Trade Commission, the Justice Department, and Congress.
In recent months, the FTC has already started questioning some of Amazon’s competitors about the e-commerce giant’s business practices, according to one source briefed on discussions.
The timing makes sense. The FTC’s Bureau of Competition announced in February that it was creating a new task force dedicated to “monitoring competition in U.S. technology markets, investigating any potential anticompetitive conduct in those markets, and taking enforcement actions when warranted.”
The increased regulatory attention comes as activists, legal scholars, and US presidential candidates like Sen. Elizabeth Warren have accused Amazon of anticompetitive behavior. Amazon controls around half of all online retail in the US, is the biggest cloud computing provider in the world, and even its side business — online advertising — is large enough to make it the third biggest ad platform in the US, only trailing Google and Facebook.
Now the FTC is gathering intel from Amazon competitors. To be clear: The FTC queries Recode has learned of do not mean that the commission has launched a formal investigation of Amazon. Nor do they mean that these topics would be a focus area if the FTC eventually does launch an investigation of Amazon.
But here are three lines of questioning related to Amazon that the FTC has been pursuing, according to the source. A Federal Trade Commission spokesman declined to comment. An Amazon spokesperson declined to comment on the record about the potential investigation.
1) Fulfillment by Amazon’s pricing structure
This is an Amazon logistics service known more commonly in the retail industry as FBA. The service lets Amazon sellers store their goods in Amazon warehouses and have Amazon handle the packing, shipping, and customer service for these orders.
But Amazon sellers can also use FBA to have Amazon store, fulfill, and ship items that the seller has sold outside of Amazon — whether on their own website or on other shopping marketplaces like Etsy and eBay.
The FTC’s queries about FBA have revolved around the service’s pricing structure. Amazon charges their sellers more for FBA services when they are used for an order placed on a competing website instead of on Amazon.com.
For example, Amazon charges sellers $4.76 to pick, pack, ship and handle customer service for an FBA item sold on Amazon, that weighs between one and two pounds.
That same item, though, would cost 75 percent more — or $8.35 in FBA fees — if Amazon had to ship it out to a customer who bought the product on competing platforms like Etsy, eBay or the seller’s own online store.
This discrepancy has caught the FTC’s attention, Recode’s source says.
2) Amazon competing against its own sellers
Amazon competing against its own sellers is perhaps the most popular topic among the company’s critics, including Elizabeth Warren.
Amazon invites small and mid-sized businesses to sell directly to Amazon customers on Amazon.com through a platform known as the Amazon Marketplace. But Amazon has created more than 100 of its own brands that often compete directly against Amazon’s third-party sellers.
One question is whether Amazon unfairly uses sales and other data from its sellers to undercut or otherwise beat out these same small and midsize merchants. An Amazon spokesperson said the company prohibits Amazon’s own brands from using an individual seller’s data to compete against the seller. (But Amazon doesn’t say whether its own brands can use aggregated data from a bunch of sellers selling the same product.)
Amazon has also sometimes aggressively promoted its own brands on the Amazon website in real estate not available to its sellers.
If you consider Amazon a retailer, you could argue that many other retailers — including Walmart and Target — do a similar thing: Analyze sales trends in their stores to inform the creation of their own brands that they sell alongside their vendors.
But if you consider the Amazon Marketplace as more of a “platform utility” — an argument made by Warren in her recent antitrust manifesto and originally put forth by the antitrust expert Lina Khan — you might question whether Amazon should be allowed to compete against its own business customers.
3) Amazon Prime bundling of services
If you’re a frequent Amazon shopper, the $119 you spend a year on Prime to get the long list of Prime perks — unlimited one-day shipping; access to a huge online library of TV shows, movies, and songs; free online photo storage; and more — seems like a deal. As of 2018, Amazon boasts more than 100 million Prime members worldwide.
But the FTC has shown interest in the question of whether this bundling of services allows Amazon to unfairly undercut competitors. One line of thinking: If Amazon doesn’t need to profit directly from the annual Prime membership fee — and it’s not clear that it does — how are competitors who do have to make money from an individual service supposed to compete on price?
Considering Amazon’s size, it’s likely that the FTC is gathering info about other tentacles of Amazon, beyond the three outlined above. There are have been some calls for Amazon to separate Amazon Web Services from its core business, for example. Others are concerned about Alexa’s early dominance in the “smart home” space, and that Amazon is already competing against manufacturers that integrate Alexa into their devices, and other companies that make voice apps — or “Skills” — for Alexa.
The only sure thing for Amazon right now is that intense regulatory scrutiny has arrived, and it won’t dissipate soon.
That same item, though, would cost 75 percent more — or $8.35 in FBA fees — if Amazon had to ship it out to a customer who bought the product on competing platforms like Etsy, eBay or the seller’s own online store.
Doesn't seem like good grounds for a anti-trust complaint. Amazon isn't reasonably required to fulfull orders outside their platform at all. That they do so is a service to theose other sites/platforms, and if they can get a better price elsewhere they are free to do so.
Amazon competing against its own sellers
Not much better case here. Again they could just not allow other sellers on their platform.
Perhaps their best case is the Prime bundling but still that seems week to me. If that's all they got I don't think that this case should rightfully go anywhere.
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For the first time, Amazon today showed off its newest fully electric delivery drone at its first re:Mars conference in Las Vegas. Chances are, it neither looks nor flies like what you’d expect from a drone. It’s an ingenious hexagonal hybrid design, though, that has very few moving parts and uses the shroud that protects its blades as its wings when it transitions from vertical, helicopter-like flight at takeoff to its airplane-like mode.
These drones, Amazon says, will start making deliveries in the coming months, though it’s not yet clear where exactly that will happen.
What’s maybe even more important, though, is that the drone is chock-full of sensors and a suite of compute modules that run a variety of machine learning models to keep the drone safe. Today’s announcement marks the first time Amazon is publicly talking about those visual, thermal and ultrasonic sensors, which it designed in-house, and how the drone’s autonomous flight systems maneuver it to its landing spot. The focus here was on building a drone that is as safe as possible and able to be independently safe. Even when it’s not connected to a network and it encounters a new situation, it’ll be able to react appropriately and safely.
When you see it fly in airplane mode, it looks a little bit like a TIE fighter, where the core holds all the sensors and navigation technology, as well as the package. The new drone can fly up to 15 miles and carry packages that weigh up to five pounds.
This new design is quite a departure from earlier models. I got a chance to see it ahead of today’s announcement and I admit that I expected a far more conventional design — more like a refined version of the last, almost sled-like, design.
Besides the cool factor of the drone, though, which is probably a bit larger than you may expect, what Amazon is really emphasizing this week is the sensor suite and safety features it developed for the drone.
Ahead of today’s announcement, I sat down with Gur Kimchi, Amazon’s VP for its Prime Air program, to talk about the progress the company has made in recent years and what makes this new drone special.
“Our sense and avoid technology is what makes the drone independently safe,” he told me. “I say independently safe because that’s in contrast to other approaches where some of the safety features are off the aircraft. In our case, they are on the aircraft.”
Kimchi also stressed that Amazon designed virtually all of the drone’s software and hardware stack in-house. “We control the aircraft technologies from the raw materials to the hardware, to software, to the structures, to the factory to the supply chain and eventually to the delivery,” he said. “And finally the aircraft itself has controls and capabilities to react to the world that are unique.”
What’s clear is that the team tried to keep the actual flight surfaces as simple as possible. There are four traditional airplane control surfaces and six rotors. That’s it. The autopilot, which evaluates all of the sensor data and which Amazon also developed in-house, gives the drone six degrees of freedom to maneuver to its destination. The angled box at the center of the drone, which houses most of the drone’s smarts and the package it delivers, doesn’t pivot. It sits rigidly within the aircraft.
It’s unclear how loud the drone will be. Kimchi would only say that it’s well within established safety standards and that the profile of the noise also matters. He likened it to the difference between hearing a dentist’s drill and classical music. Either way, though, the drone is likely loud enough that it’s hard to miss when it approaches your backyard.
To see what’s happening around it, the new drone uses a number of sensors and machine learning models — all running independently — that constantly monitor the drone’s flight envelope (which, thanks to its unique shape and controls, is far more flexible than that of a regular drone) and environment. These include regular camera images and infrared cameras to get a view of its surroundings. There are multiple sensors on all sides of the aircraft so that it can spot things that are far away, like an oncoming aircraft, as well as objects that are close, when the drone is landing, for example.
The drone also uses various machine learning models to, for example, detect other air traffic around it and react accordingly, or to detect people in the landing zone or to see a line over it (which is a really hard problem to solve, given that lines tend to be rather hard to detect). To do this, the team uses photogrammetrical models, segmentation models and neural networks. “We probably have the state of the art algorithms in all of these domains,” Kimchi argued.
Whenever the drone detects an object or a person in the landing zone, it obviously aborts — or at least delays — the delivery attempt.
“The most important thing the aircraft can do is make the correct safe decision when it’s exposed to an event that isn’t in the planning — that it has never been programmed for,” Kimchi said.
The team also uses a technique known as Visual Simultaneous Localization and Mapping (VSLAM), which helps the drone build a map of its current environment, even when it doesn’t have any other previous information about a location or any GPS information.
“That combination of perception and algorithmic diversity is what we think makes our system uniquely safe,” said Kimchi. As the drone makes its way to the delivery location or back to the warehouse, all of the sensors and algorithms always have to be in agreement. When one fails or detects an issue, the drone will abort the mission. “Every part of the system has to agree that it’s okay to proceed,” Kimchi said.
What Kimchi stressed throughout our conversation is that Amazon’s approach goes beyond redundancy, which is a pretty obvious concept in aviation and involves having multiple instances of the same hardware on board. Kimchi argues that having a diversity of sensors that are completely independent of each other is also important. The drone only has one angle of attack sensor, for example, but it also has a number of other ways to measure the same value.
Amazon isn’t quite ready to delve into all the details of what the actual on-board hardware looks like, though. Kimchi did tell me that the system uses more than one operating system and CPU architecture, though.
It’s the integration of all of those sensors, AI smarts and the actual design of the drone that makes the whole unit work. At some point, though, things will go wrong. The drone can easily handle a rotor that stops working, which is pretty standard these days. In some circumstances, it can even handle two failed units. And unlike most other drones, it can glide if necessary, just like any other airplane. But when it needs to find a place to land, its AI smarts kick in and the drone will try to find a safe place to land, away from people and objects — and it has to do so without having any prior knowledge of its surroundings.
To get to this point, the team actually used an AI system to evaluate more than 50,000 different configurations. Just the computational fluid dynamics simulations took up 30 million hours of AWS compute time (it’s good to own a large cloud when you want to build a novel, highly optimized drone, it seems). The team also ran millions of simulations, of course, with all of the sensors, and looked at all of the possible positions and sensor ranges — and even different lenses for the cameras — to find an optimal solution. “The optimization is what is the right, diverse set of sensors and how they are configured on the aircraft,” Kimchi noted. “You always have both redundancy and diversity, both from the physical domain — sonar versus photons — and the algorithmic domain.”
The team also ran thousands of hardware-in-the-loop simulations where all the flight services are actuating and all the sensors are perceiving the simulated environment. Here, too, Kimchi wasn’t quite ready to give away the secret sauce the team uses to make that work.
And the team obviously tested the drones in the real world to validate its models. “The analytical models, the computational models are very rich and are very deep, but they are not calibrated against the real world. The real world is the ultimate random event generator,” he said.
It remains to be seen where the new drone will make its first deliveries
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What Amazon Might Want With Boost Mobile wired.com Why might the retail-and-cloud-computing giant be interested in buying a wireless network? In the near term, Boost would give Amazon another service to sell. The company has been expanding its portfolio of Amazon-branded products, from batteries to apparel to kitchenware. Amazon already sells phones and, via third-party sellers, prepaid SIM cards. It's not much of a stretch to think that Amazon could sell phones bundled with an Amazon-branded wireless service.
Longer term, the acquisition could tie into Amazon’s efforts to gain more control over the networks it relies on to reach customers. Everything from its Echo devices to its Prime Video streaming service to its potential delivery drones relies on internet connectivity provided by other companies.
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Barnes & Noble agreed to be acquired by Elliott Management for $6.50 a share in an all-cash deal valued at about $683 million, including the assumption of debt.
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-- Courier says it won’t renew contract for U.S. air services
-- Focus will be on other customers such as Walmart, Target
FedEx Corp. said it wouldn’t renew its U.S. air-delivery contract with Amazon.com Inc., paring a key customer relationship as the largest online retailer deepens its foray into freight transportation.
The delivery giant will instead focus on “serving the broader e-commerce market” with U.S. package volume from online shopping expected to double by 2026, according to a FedEx statement Friday. The Amazon contract expires at the end of this month, and doesn’t cover international services or domestic operations at other units such as FedEx’s ground deliveries.
FedEx’s surprise move signals that the No. 2 U.S. courier will bank on smaller e-commerce customers that lack Amazon’s bargaining power for big volume discounts. Amazon’s emergence as a logistics giant is piling pressure on FedEx and United Parcel Service Inc. for cheaper and speedier deliveries, as the e-commerce powerhouse builds its own aircraft fleet and delivery capabilities.
“They know their Amazon business is going to continue to shrink,” said Satish Jindel, founder of SJ Consulting Group, referring to FedEx. “Why have your capacity be used up by a customer that’s going to continue to chip away? They’d rather use that capacity for other customers.”
FedEx rose less than 1% to $158.17 at 2 p.m. in New York. The shares erased gains on the company’s announcement about Amazon before recovering some of the lost ground. Amazon held steady, trading 2.7% higher at $1,801.10.
“We respect FedEx’s decision and thank them for their role serving Amazon customers over the years,” the Seattle-based retailer said in a statement.
Walmart, Target
FedEx said Amazon represented 1.3% of sales last year. Jindel estimated that FedEx’s domestic air-parcel business with Amazon is probably “a few hundred million a year, at the best.”
The Memphis, Tennessee-based courier said Amazon wasn’t its largest customer. In an email, FedEx said it would focus on customers such as Walmart Inc., Target Corp. and Walgreens Boots Alliance Inc.
“There is significant demand and opportunity for growth in e-commerce, which is expected to grow from 50 million to 100 million packages a day in the U.S. by 2026,” FedEx said in the statement. “FedEx has already built out the network and capacity to serve thousands of retailers in the e-commerce space.”
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